washington mutual (wmi) - attachments/exhibits to the final report of the examiner (part 6/10)

Confidential

PRIVILEGED AND CONFIDENTIALPrepared at the Request of Counsel

Steven Zelin Qualifications

Restricted for Use in Connection with Plan Confirmation Only Highly Confidential - Attorneys' Eyes Only Information.

Restricted For Use in Connection with Plan Confirmation Only WMI-BX_701361066.00047

Washington Mutual, Inc.

47Confidential


Allegheny Health, Education & Research Foundation

Alliance Entertainment Corp.

American Banknote Corp.

Ames Department Stores, Inc.

Anacomp, Inc.

Audio Visual Services, Inc.

Big V Supermarkets, Inc.

Brown Jordan International, Inc.

Marchon Eyewear, Inc.

Medical Resources, Inc.

Meridian Automotive Systems

Mrs. Fields Famous Brands, LLC

Musicland Stores Corporation

Paragon Trade Brands, Inc.

The Penn Traffic Company

The Pullman Company

Safelite Glass Corp.

Channel Home Centers

Coastal Physicians Group

Continental Information Systems

Dura Automotive Systems, Inc.

FGIC Corp.

Fruehauf Trailer Corporation

Highland Hospitality

Indesco Corporation

Instrumentation Labs, Inc.

Steven Zelin Qualifications Other Notable Publicly Disclosed Assignments

of Steven Zelin



Confidential


Reorganized WMI Financial Model Support




49Confidential


WMMRC Overview

WMMRC is a mortgage reinsurance company incorporated in 2000 and domiciled in Hawaii

Company is regulated by the State of Hawaii Department of Insurance

Company receives premium revenue from insurance on residential mortgage loans with private mortgage insurance (“MI”) in return for taking risk on potential insurance claim losses

WMMRC has not written any new business since 9/25/08

Consumer protections:

Customer is placed into a primary MI policy that best suits their needs and at a fair, competitive price

Premiums are determined by MI companies and filed with each state, not WMMRC

Customer (within 30 days of loan funding) has the ability to “opt out” of the captive reinsurance arrangement, although captive reinsurance treaties have no impact on the borrowers

WMMRC receives risk transference options that meet the US Department of Housing and Urban Development’s Real Estate Settlement Procedures Act guidelines on bona fide reinsurance arrangements

________________________________________________

Source: WMMRC management.





50Confidential


WMMRC Overview (Cont’d)

Company has basic reinsurance contract provisions with all six primary mortgage insurers: Genworth, MGIC, PMI, Radian, RMIC, and UGRIC

The majority of reinsurance contracts are structured in 4% / 10% / 40% manner whereby:

WMMRC begins to pay claims after initial 4% of losses per each vintage year;

WMMRC pays all losses on the next 10% risk layer; primary MI pays all losses after the 10% risk layer is exhausted;

In return, WMMRC receives 40% of MI insurance premiums;

Each annual book of business has a 10-year termThere are two “quota share” contracts (with Genworth and Radian) which are structured in a manner whereby:

WMMRC begins to pay claims with the first dollar of lossesIt shares these losses 50% / 50% with the primary insurerWMMRC receives 50% of commissionsEach book has a 10-year term

A few contracts (across all six MIs) are structured in a 5% / 5% / 25% manner whereby:WMMRC begins to pay claims after initial 5% of losses per each vintage yearWMMRC pays all losses on the next 5% risk layer; primary MI pays all losses after the 5% risk layer is exhausted;In return, WMMRC receives 25% of MI insurance premiums;Each annual book of business has a 10-year termThese contract structures are prevalent in the 1999 – 2002 vintage years and the 2008 vintage year

________________________________________________






51Confidential


WMMRC Overview (Cont’d)

Credit risk associated with reinsurance is mitigated by:Holding a well-diversified national portfolio of insurance loansReducing counter-party credit risk by using all six MI companiesDiversifying risks across vintages (time dimension)Maintaining a very high quality (“AAA-rated”) bond investment portfolio

Key financial data points as of 12/31/09:Assets: $472mReserve: $349mAssets Held in Trust: $467mEquity: $106m

Key portfolio statistics as of 12/31/09:Insured Loans: $16.6bInsured Risk: $ 4.3b (Primary MI covers about 25% of the loan balance)Original Risk Exposure: $ 1.6b (Represents WMMRC’s 10% risk layer based on original loan balance)Remaining Risk Exposure: $ 0.7b (Represents actual exposure taking into account loan paydowns and attachment points)Operating Leverage: 3.6:1 (Industry average is 8:1)

________________________________________________






52Confidential


Financial Model (Excluding NOLs) –

Detailed ProjectionsReorganized WMI Financial Model

Support

($ in thousands)

________________________________________________

Note: Net Operating Cash Flow does not include G&A expense.

2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 - 2019

Assumed Premiums Written

Genworth $ 6,274 $ 5,261 $ 3,990 $ 3,157 $ 2,228 $ 1,511 $ 337 $ 19 $ – $ 22,777MGIC 3,349 2,671 2,024 1,530 1,083 607 415 31 – 11,710

Radian 6,312 5,388 4,532 3,419 2,557 1,756 1,500 113 – 25,576

PMI 11,320 9,445 6,764 4,397 2,748 1,759 430 25 – 36,888

UGRIC 7,726 6,315 4,466 3,041 1,724 1,051 355 23 – 24,700

RMIC 2,712 2,260 1,668 1,123 619 369 163 11 – 8,927

Total Assumed Premiums Written 37,694 31,341 23,444 16,667 10,960 7,053 3,202 221 – 130,580

Paid Losses

Genworth (19,497) (8,043) (3,606) (1,937) (264) (69) (29) (2) – (33,447)

MGIC (19,338) (4,811) (3,184) (2,701) (297) (22) (11) (1) – (30,365)

Radian (40,671) (12,319) (6,193) (1,557) (773) (375) (112) (8) – (62,007)

PMI (46,704) (21,393) (10,111) (867) (63) (40) (22) (2) – (79,202)

UGRIC (27,923) (15,941) (8,377) (3,505) (431) (16) – – – (56,193)

RMIC (10,325) (7,777) (3,569) (2,218) (1,103) (355) (186) (15) – (25,548)

Total Paid Losses (164,459) (70,285) (35,040) (12,786) (2,930) (877) (359) (27) – (286,762)

Ceding Commissions

Genworth – – – – – – – – – –

MGIC (13) (11) (8) (6) (4) (2) (2) (0) – (47)

Radian (1,043) (891) (749) (565) (423) (290) (248) (19) – (4,227)

PMI (1,863) (1,554) (1,113) (724) (452) (290) (71) (4) – (6,071)

UGRIC (996) (814) (576) (392) (222) (135) (46) (3) – (3,184)RMIC – – – – – – – – – –

Total Ceding Commissions (3,916) (3,270) (2,446) (1,687) (1,101) (718) (366) (26) – (13,529)

Net Operating Cash Flow

Genworth (13,223) (2,782) 384 1,220 1,965 1,442 308 16 – (10,670)

MGIC (16,002) (2,151) (1,168) (1,177) 781 582 403 30 – (18,702)

Radian (35,403) (7,821) (2,410) 1,297 1,361 1,091 1,140 87 – (40,657)

PMI (37,247) (13,503) (4,460) 2,806 2,233 1,430 338 19 – (48,385)

UGRIC (21,193) (10,441) (4,487) (856) 1,071 899 309 20 – (34,677)

RMIC (7,613) (5,517) (1,901) (1,095) (484) 15 (22) (3) – (16,620)Total Net Operating Cash Flow $ (130,681) $ (42,214) $ (14,041) $ 2,194 $ 6,928 $ 5,458 $ 2,476 $ 168 $ – $ (169,711)




53Confidential


Disclosure Statement Financial Model –

Cash Flow StatementReorganized WMI Financial Model

Support

($ in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 - 2019

Cash Flows from Operating ActivitiesNet Income (Loss) $ (4,599) $ 10,892 $ 20,252 $ 20,033 $ 16,281 $ 13,758 $ 10,669 $ 10,268 $ (11,592) $ 85,962

Accrued Investment Income 382 111 24 (23) (41) (39) (32) (30) 911 1,264

Premiums Receivable 551 495 634 505 428 286 293 221 – 3,412

Losses and Loss Adjustment Expenses (106,066) (42,199) (25,942) (9,378) (1,629) (660) (323) – – (186,196)

Losses Payable (10,372) (3,569) (1,818) (1,858) (727) (121) (36) (27) – (18,527)

Unearned Premiums (127) (110) (127) (116) (98) (80) (56) (106) – (822)Accrued Ceding Commissions Expense (55) (51) (65) (57) (43) (28) (27) (26) – (353)

Accrued Interest on Notes Payable – – – – – – – – – –

Federal Income Tax Payable to Parent – – – – – – – – – –

Accounts Payable and Accrued Expenses 81 3 4 4 4 4 4 (139) – (36)

Accrued Investment Expense 50 (6) (1) 1 2 2 2 2 (51) –

Net Cash Provided by Operating Activities (120,154) (34,434) (7,039) 9,111 14,176 13,122 10,495 10,162 (10,732) (115,294)

Net Cash Provided by Investing Activities – – – – – – – – – –

Cash Flow from Financing ActivitiesDividend of Unrestricted Cash – – – – – – – – (298,634) (298,634)

Proceeds from Issuance of Notes Payable to Parent – – – – – – – – 0 0Net Cash Provided by Financing Activities – – – – – – – – (298,634) (298,634)

Net Change in Cash and Cash Equivalents (120,154) (34,434) (7,039) 9,111 14,176 13,122 10,495 10,162 (309,366) (413,928)

Beginning Cash and Investments Balance 413,928 293,774 259,340 252,301 261,412 275,588 288,710 299,204 309,366 413,928

Ending Cash and Investments Balance $ 293,774 $ 259,340 $ 252,301 $ 261,412 $ 275,588 $ 288,710 $ 299,204 $ 309,366 $ (0) $ (0)




54Confidential




Income Statement

($ in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2011-2019

Premiums Written $37,142 $30,846 $22,811 $16,162 $10,532 $6,767 $2,909 $0 $0 $127,167Change in Unearned Premiums 127 110 127 116 98 80 56 106 - 822

Net Premiums Earned 37,270 30,955 22,938 16,278 10,630 6,847 2,965 106 - 127,989

Losses Paid 154,087 66,716 33,222 10,928 2,203 756 323 - - 268,235 Provision for Losses and IBNR (106,066) (42,199) (25,942) (9,378) (1,629) (660) (323) - - (186,196)

Ceding Commission 3,860 3,219 2,381 1,630 1,058 690 340 - - 13,176 Underwriting Expense 51,882 27,735 9,661 3,180 1,632 786 340 - - 95,215

Underwriting Income (Loss) (14,612) 3,220 13,277 13,098 8,998 6,061 2,625 106 - 32,774

General & Administrative Expenses (1,487) (1,532) (1,578) (1,625) (1,674) (1,724) (1,776) - - (11,397) Interest Expense - - - - - - - - - -

Investment Income 11,501 9,205 8,553 8,560 8,956 9,421 9,820 10,161 1,727 77,904 Gain/(Loss) on Commutation - - - - - - - - (13,319) (13,319)

Income (Loss) Before Tax Provision (4,599) 10,892 20,252 20,033 16,281 13,758 10,669 10,268 (11,592) 85,962

Federal Income Tax Expense - - - - - - - - - -

Net Income (Loss) (4,599)$ 10,892$ 20,252$ 20,033$ 16,281$ 13,758$ 10,669$ 10,268$ (11,592)$ 85,962$




55Confidential




Balance Sheet

($ in thousands) AssumedEmergence

Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-10 - Dec-19

Cash and Investments $463,546 $ 413,928 $ 293,774 $ 259,340 $ 252,301 $ 261,412 $ 275,588 $ 288,710 $ 299,204 $ 309,366 $ (0) $ (413,928)Accrued Interest 4,367 1,264 882 771 747 770 810 850 881 911 – (1,264)Reinsurance Premiums Receivable 4,015 3,412 2,861 2,366 1,732 1,227 800 514 221 – – (3,412)

Total Assets 471,928$ $ 418,605 $ 297,517 $ 262,478 $ 254,780 $ 263,409 $ 277,198 $ 290,073 $ 300,306 $ 310,278 $ (0) $ (418,605)

Accrued Expenses 45$ $ 36 $ 117 $ 120 $ 124 $ 127 $ 131 $ 135 $ 139 $ – $ – $ (36)Accrued Investment Expenses - – 50 44 42 43 46 48 50 51 – –

Accrued Ceding Fees 467 353 297 246 181 124 80 52 26 – – (353)Federal Income Tax Payable (Receivable) (46,249) – – – – – – – – – – –Allowance for Doubtful Accounts 46,249 – – – – – – – – – – –

Notes Payable 12,511 – – – – – – – – – 0 0Interest Payable - – – – – – – – – – – –Unearned Premiums 1,002 822 695 585 457 341 243 163 106 – – (822)Losses Payable 2,636 18,527 8,155 4,586 2,769 911 184 63 27 – – (18,527)

Loss Reserves and IBNR 255,859 186,196 80,130 37,931 11,990 2,611 983 323 0 0 0 (186,196)Total Liabilities 272,521 205,933 89,444 43,512 15,562 4,158 1,666 784 348 51 0 (205,933)

Paid in Capital 69,880 82,968 82,968 82,968 82,968 82,968 82,968 82,968 82,968 82,968 82,968 –

Retained Earnings (Accumulated Deficit) 138,770 128,961 129,704 125,105 135,998 156,250 176,283 192,563 206,321 216,990 227,258 98,297Net Income (Loss) - YTD (9,243) 743 (4,599) 10,892 20,252 20,033 16,281 13,758 10,669 10,268 (11,592) (12,335)Cumulative Dividends Paid - – – – – – – – – – (298,634) (298,634)

Total Stockholder's Equity 199,407 212,672 208,073 218,966 239,218 259,251 275,531 289,289 299,958 310,226 (0) (212,672)

Total Liabilities and Stockholder's Equity 471,928$ $ 418,605 $ 297,517 $ 262,478 $ 254,780 $ 263,409 $ 277,198 $ 290,073 $ 300,306 $ 310,278 $ (0) $ (418,605)




56Confidential


WMMRC Customers

Company Description 2009 Revenue Mix Credit Rating Genworth Genworth Financial, Inc., provides insurance, wealth management, investment, and

financial solutions in the United States and internationally. The company operates in three segments: Retirement and Protection, International, and U.S. Mortgage Insurance. The Retirement and Protection segment offers various protection products, including life, long-term care, Medicare supplement insurance, and senior supplemental products, as well as care co-ordination services; and wealth management and retirement income products. The International segment provides mortgage insurance products in Canada, Australia, Mexico, and European countries, as well as offers payment protection coverages. This segment also provides various services, analytical tools, and technology that enable lenders to manage risk. The U.S. Mortgage Insurance segment offers mortgage insurance products principally insuring prime-based, individually underwritten residential mortgage loans. Additionally, the company provides institutional products consisting of funding agreements, funding agreements backing notes, and guaranteed investment contracts; and corporate-owned life insurance products.

Retirement and Protection: 62.4% International: 28.2% U.S. Mortgage Insurance: 9.1% Corporate and Other: 0.2%

BBB

MGIC MGIC Investment Corporation provides private mortgage insurance to the home mortgage lending industry in the United States. It provides primary insurance coverage that provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. The company’s primary insurance is written on first mortgage loans secured by owner occupied single-family homes, first liens secured by non-owner occupied single-family homes, and on vacation or second homes. MGIC Investment’s principal product, primary mortgage insurance is written through the flow market channel, in which loans are insured in individual and loan-by-loan transactions, as well as through the bulk market channel, in which portfolios of loans are individually insured in single, bulk transactions. It also provides various mortgage services for the mortgage finance industry, such as contract underwriting, portfolio retention, and secondary marketing of mortgage-related assets.

N/A CCC


________________________________________________

Source: Capital IQ.




57Confidential


WMMRC Customers (Cont’d)

Company Description 2009 Revenue Mix Credit Rating Radian Radian Group Inc provides credit-related insurance coverage and financial services

in the United States and internationally. The company operates in three segments: Mortgage Insurance, Financial Guaranty, and Financial Services. The Mortgage Insurance segment offers credit protection for mortgage lenders and other financial services companies on residential mortgage assets. This segment serves mortgage originators, such as mortgage bankers, mortgage brokers, commercial banks, savings institutions, and credit unions. The Financial Guaranty segment insures and reinsures municipal bonds, structured finance transactions, and other credit-based risks, as well as provides credit protection on various asset classes through financial guarantees and credit default swaps. This segment serves financial institutions that structure, underwrite, or trade securities issued in structured finance obligations. The Financial Services segment specializes in credit card and bankruptcy-plan consumer assets, as well as originates subprime credit card receivables and has various other similar ventures related to consumer assets.

Mortgage Insurance: 69.2% Financial Guaranty: 30.8% Financial Service: 0.0%

CCC

PMI The PMI Group, Inc. provides residential mortgage insurance products that offer loss protection to mortgage lenders and investors in the event of borrower default in the United States. The company offers mortgage insurance products to meet the capital and credit risk mitigation needs of its customers. Its products include primary mortgage insurance through primary flow channel that provide the insured with first-loss mortgage default protection on individual loans at specified coverage percentages; and mortgage insurance to credit unions through its 50% joint venture interest in CMG Mortgage Insurance Company. The PMI Group’s customers primarily include mortgage lenders, depository institutions, commercial banks, and investors.

Mortgage Insurance: 92.7% International Operations: 4.8% Corporate and Other: 2.4%

CCC+


________________________________________________

Source: Capital IQ.




58Confidential


WMMRC Customers (Cont’d)

Company Description 2009 Revenue Mix Credit Rating UGRIC United Guaranty Residential Insurance Company provides mortgage guaranty

insurance and reinsurance solutions. It offers direct insurance coverage insuring, on an individual basis, loans secured by a first mortgage lien against real estate consisting of one-family and four-family dwellings, as well as reinsurance of business written by other mortgage guaranty insurers. United Guaranty Residential Insurance Company operates as a subsidiary of National Union Fire Insurance Company Of Pittsburgh, Pa.

N/A BBB

RMI Republic Mortgage Insurance Company provides mortgage insurance services. It protects lenders from losses due to defaults on first mortgages for single-family residential properties; offers pre-homeownership, structured finance, technology solutions, market analysis, loan services, and mortgage training; and provides lender services, including contract underwriting, real estate, and strategic advisory services, as well as offers online services. It serves industrial and financial services institutions. Republic Mortgage Insurance Company operates as a subsidiary of Old Republic Mortgage Guaranty Group, Inc.

N/A BBB-


________________________________________________

Source: Capital IQ.



Confidential


Comparable Company Analysis




60Confidential



________________________________________________

Source: Capital IQ.Note: As of 10/14/2010.Note: Comparable company list excludes multi-national reinsurance businesses.

($ in millions, except per share amount)


Given the size of comparable companies and the nature of the operations, Blackstone did not rely on the comparable company analysis as a primary determinant of Reorganized WMI value.

Current Price Price as a Multiple of: Gross CorporateMarket Share % of 52-Week GAAP EPS Book Tangible Div. ROE Debt / Cap TEV / Credit

Company Ticker Cap. Price High Low 2010E 2011E Value BV Yield 2009E (At Book) Revenue RatingDistressed InsurersPMI Group Inc. NYSE:PMI $ 678.5 $ 4.21 54.3% 232.6% NM NM 0.7x 0.7x – % (64.5%) 38.1% 1.91x CCC+

Radian Group Inc. NYSE:RDN 1,184.5 8.91 47.7 NM NM NM 0.7 0.7 0.1 (49.3) 42.1 10.5 CCC

Genworth Financial Inc. NYSE:GNW 6,395.6 13.07 67.5 156.2 13.2 8.0 0.5 1.4 – 2.3 44.1 1.3 BBB

MGIC Investment Corp. NYSE:MTG 2,106.7 10.51 76.2 282.5 NM 21.6 1.1 1.1 – (25.2) 34.2 2.4 CCC

MBIA Inc. NYSE:MBI 2,605.4 13.00 99.2 407.5 NM NM 1.0 1.2 – (42.6) 86.5 7.1 BB-

Diversified InsurersAFLAC Inc. NYSE:AFL $ 25,815.0 $ 54.83 96.9% 137.4% 10.0x 9.0x 2.6x 23.7x 2.0% 22.4% 21.2% 1.5x A-

Ameriprise Financial Inc. NYSE:AMP 12,612.7 50.24 98.9 147.2 12.4 10.1 1.2 1.2 1.4 10.4 49.5 1.1 A

Lincoln National Corp. NYSE:LNC 8,004.3 25.27 75.3 122.4 7.3 6.7 0.6 7.3 0.2 6.3 32.1 1.6 A-

MetLife, Inc. NYSE:MET 32,522.2 39.64 83.0 123.3 9.1 7.6 0.8 2.0 7.5 6.2 44.2 1.2 A-

Old Republic International Corp. NYSE:ORI 3,277.3 13.85 89.4 138.2 38.8 12.9 0.8 0.9 4.9 1.4 8.0 1.1 BBB+

Principal Financial Group Inc. NYSE:PFG 8,542.7 26.67 84.9 127.7 10.2 9.3 1.0 2.0 7.5 9.4 23.2 1.2 BBB+

Prudential Financial, Inc. NYSE:PRU 25,302.1 54.18 81.1 124.8 9.2 8.2 0.9 1.6 5.2 19.8 50.7 1.8 A

Torchmark Corp. NYSE:TMK 4,413.0 54.60 96.6 137.8 8.7 8.1 1.1 72.4 1.1 14.1 22.0 1.9 A

Unum Group NYSE:UNM 7,359.1 22.52 85.2 121.9 8.2 7.5 0.8 1.2 1.5 10.5 22.2 0.9 BBB-



WM Confidential Limited Access

Privileged and Confidential

I 71150

shington Mutual cBoard of Directors

Minutes

Date I July 15 2008

WaMu Center

Boardroom 32nd floor

Seattle Washington

Attendance

Directors Present

Stephen E Frank Chair

David n a an

Stephen 1 Chazen

Kerry illi er

Thomas C Leppert

Charles M Lillis

Phillip Matthews

Directors sent None

Board Observer Present Larry Kellner

visor Present

Regina T Montoya

Margaret Osmer McQuadeMichael Murphy

Wm G Reed Jr

Orin C Smith

James Stever

Lee Meyerson Partner at Simpson Thacher Bartlett LLP

Management Present

Thomas Casey

Daryl D David

Cathy Doperalski

Barry Koch

Stewart M Landefeld

FDIC A en e

Steve Funaro Lead Examiner

OTS Attendees

Darrel Dochow Director

John McMurray

John Robinson

Stephen J Rotella

Michael S Solender

Susan R Taylor Secretary

Doe 183723

WMI_PC_08788123.00001Restricted For Use in Connection with Plan Confirmation Only

HIGHLY CONFIDENTIAL

Confidential Limited Access


171 5

Edwin Chow Deputy Director

Dale Blackburn Assistant Director

Ben Franklin Examiner in Charge

John Bisset Operations Lead Examiner

Robert Archibald Asset Quality Lead Examiner

The materials for the Board meeting had been posted to BoardVantage and sent via

overnight courier to the Directors on July 10tt Updated material for several of the

presentations was handed out at the meeting

The Board of Directors of Washington Mutual Inc I or the Holding

Company met concurrently with the Board of Directors of Washington Mutual Bank

or the Bank on July 15 2008 Everyone listed above was present in

person except for Mr Meyerson who attended by telephone A quorum was

present at the beginning of the meeting

Mr Frank called the meeting to order at 1220 pm

Executive Session

The Board met in executive session for 40 minutes prior to asking management to

join the meeting The Board discussed several topics during executive session with

Mr Killinger including the environment regulatory and legislative issues personnel

issues the study performed by McKinsey operational issues loan performance and

liquidity Messrs Casey David Lan efel McMurray Robinson Rotella and

Solender and s Taylor then joined the meeting

Minutes from June 17 Strategic Planning Session Meetin

on a motion duly made and seconded following submission of a suggested

change the minutes from the June 16 17 Strategic Planning Session and the June

17 2008 meeting were approved as modified

Review of Consolidated Reports

Messrs Casey Rotella and illin er submitted reports on the operations and

prospects of the Holding Company and its subsidiaries including the Bank on a

consolidated basis The reports provided information on recent and anticipated

financial results and economic sensitivities including separately information with

regard to tail Banking Card Services Home Loans and the Commercial group

operations initiatives regulatory matters investor relations and media analytics

The Chairs of the Audit Finance and Human Resources Committees submitted

reports on behalf of their Committees which had met jointly with respectively the

Audit Finance and an Resources Committees of the Holding Companys Board

of Directors Matters that were of particular relevance to the Association are

reflected

in

these minutes

Doc 1 83723 2


HIGHLY CONFIDENTIAL



171508

Second Quarter 2008 Financial Results

Mr Casey directed the Boards attention to the materials previously provided

regarding the most recent quarters financial results He reported on the Holding

Companys overall net loss of 33 billion for the quarter and reviewed some of tefactors contributing to the results including the total second quarter provision of $59billion and the impact of the beneficial conversion feature He discussed the

earnings announcement that would be released on July 22 and responded to

numerous questions from Directors He handed out a draft version of the

presentation entitled Draft July 22 2008 Second Quarter 2008 Earnings

Presentation and reviewed the materials with the Board reviewed

approximately the first half of the draft presentation with the Board before r Frank

noted that it was time for the examiners to join the meeting Among other topics Mr

Casey reviewed the information expected to be disclosed regarding strategic

objectives and actions for 2008 financial performance trends and the environment

Messrs Casey and other members of management responded to questions

regarding credit losses the provision credit management and other issues

Meet with Regarding Examination Findings

Ms Doperalski joined the meeting at 13 with the OTS and IC attendees

listed above Mr Meyerson joined the meeting by telephone at this time as D Mr

Franklin distributed a Power Point presentation labeled uMeeting with Board of

Directors July 15 2008 Office of rift Supervision September 10 2007 June 30

2008 Comprehensive Examinations of Washington Mutual Inc Washington Mutual

Bank and Washington Mutual Bank fs Over the next two hours Mr Franklin

reported on the results of the examination taking the Board through his presentation

material and responding to questions throughout

Mr Franklins presentation began with a review of the scope of the examination its

continuous nature and the multiple subject areas covered He noted that a special

appraisal investigation had been initiated earlier

in 2008 and was nearing

completion Mr Franklin then reported on the primary areas of focus for the recent

examination noting that several areas asset quality ALL level and methodology

and liquidity were being focused on due to the current market environment

Mr Franklin reviewed the matters requiring board attention MRBAs as a result of

the recent examination noting which items had previously been identified for board

attention Mr Franklin responded to a question from r Frank by confirming the

progress already made in certain areas such as to enhancement of tALLmethodology and the need for continued refinement

Mr Franklin then commenced a more detailed review of the examination results

starting with asset quality which the OTS viewed as unsatisfactory Mr Franklin

reviewed trends

in

asset quality and practices across the Banks different loan

portfolios identifying both weaknesses and strengths Mr Franklin and Mr Dochow

Doc 183723


HIGHLY CONFIDENTIAL



WMI 71508

responded to numerous questions from the Board including questions regarding the

Banks practices industry practices generally and observations from previous

examinations Mr Franklin reported on progress made by management to date in

addressing the identified issues and remaining items to be addressed Mr Franklin

concluded the discussion on asset quality by reporting that the Banks rating for

asset quality was being decreased to reflect increased risk

Mr Franklin then turned the Boards attention to compliance which the OTS viewed

as needing further improvement He focused on Bank Secrecy Act BSA andAntimoneyLaundering Act AML compliance With respect to BSAAML compliance

Mr Franklin reported that at the time of the examination the OTS believed that the

Bank had not complied with the Cease and Desist Order He reported that was

aware that management had submitted an aggressive new work plan to address the

issues that management was preparing response tote draft findings memo and

added in response to a Directors question that he was optimistic that the new work

plan would lead to compliance Mr Frank stressed the importance of progress on

this issue and urged the OTS representatives to communicate with him early and

regularly regarding their assessment of compliance in this area Mr Franklin noted

the progress made in compliance management generally but expressed concern

over the continuing changes tote departments structure and leadership He also

addressed other areas of compliance and responded to several questions from

Directors The Banks compliance rating was unchanged

Mr Franklin reported that earnings were unsatisfactory and that the rating assigned

in February was retained

In response to a Directors question Mr Dochow

acknowledged the Banks success in continuing core earnings but indicated

uncertainty about the future given the current environment

Mr Franklin reported that capital was satisfactory based on current financial

projections and commended management and the Board forte successful and

timely capital raising efforts while acknowledging that uncertainty about future credit

losses posses a risk to continuing capital adequacy The Banks capital rating wasdecreased

Mr Franklin reported that while liquidity was stressed and the current levels were

only marginally adequate the OTS viewed the Banks liquidity management

practices policies and team as strong The liquidity rating remained unchanged

Also unchanged were the ratings on sensitivity to market risk and the IT composite

rating r Franklin noted that the practices in

both areas were effective and

satisfactory

Mr Franklin reported that the management rating was decreased He noted that the

management rating reflected a combination of all the other components and as a

result was unsatisfactory He reviewed the areas for improvement with the Board

Doc 183723 4


HIGHLY CONFIDENTIAL



71508

as well as some of the positive actions by the Board and management In response

to a question from r Bonderman Mr Franklin noted managements and the

Boards role in preventing examination issues from recurring Mr Dochow then

responded to a Directors question about interaction between the Board and

management Discussion ensued

Mr Franklin summarized several takeaways for the Board to consider including

establishing and supporting an effective enterprise risk management function

addressing compliance deficiencies and ensuring that expense cuts do not weaken

controls He addressed the need for a new comprehensive business plan to refocus

the long term strategy After reviewing the takeaways he presented to the Board

the examination ratings as of June 30 2008 shown

in comparison to the ratings on

February 27 2008 and January 2007 Mr Franklin then invited r Funaro to

follow up with the views of the IC

Mr Funaro outlined how the views of the FDIC were similar or different from those of

the OTS In particular he reported that given the uncertain timing and magnitude of

future credit losses the FDIC believed that credit losses could greater than

anticipated in which case more capital would be necessary He noted that further

rating agency downgrades were possible and identified several other areas of

concern After enumerating several concerns he noted that the FDIC was waiting to

receive the enforcement action being developed by the OTS

Mr Dochow then submitted his own perspective regarding the Bank and its outlook

He highlighted some of the challenges in the marketplace and summarized those

areas of concern from the examination He indicated that the OTS would initiate

some sort of enforcement action the extent of which had not yet been determined

but would be shared with management within the next few days He indicated that

the OTS would not tolerate the Bank continuing with its current composite uniform

financial institution rating for the longterm and that scrutiny by the regulators would

continue at a high level

At 300 pm Mr Frank asked management to leave so tt the Board might

continue in executive session with the representatives from the OTS and FDIC All

members of management except for Mr Killinger then left the meeting Mr

Meyerson continued to participate by conference call Discussion with the

examiners then ensued

in

executive session

Discussion Meeting with Regulators Regardigg the Examination Findings

At approximately 345 the regulators left the meeting and Messrs Casey David

Landefeld McMurray Rotella Solender and Ms Taylor rejoined the meeting Mr

Meyerson again joined the meeting by telephone after a break of a few minutes and

was asked to provide his observations He submitted his observations of the

regulators report noting the sense of urgency conveyed the regulators expression

Doc 183723 5


HIGHLY CONFIDENTIAL



171510

of the importance of the Boards immediate involvement and the strong message

that the OTS would not tolerate the current composite rating He addressed the

differences between the views conveyed by the 01S and IC He and MrSolender discussed Mr Dochows comments regarding an enforcement action and

outlined what the Board could expect the next steps to be

The Board then engaged in an active discussion with management regarding the

substance of the reports from and the IC and what actions should be or

had already been taken to address the regulators concerns and findings The

Board discussed the need to urgently address the enumerated issues and

considered whether a committee of the board could more quickly and efficiently

oversee the areas of concern In response to a comment from Mr Stever MrRotella stressed the importance of pulling together a management team that was

empowered with authority to address these issues and to track and organize

progress In response to Directors comments Messrs Solender Meyerson and

Casey discussed whether an enforcement action would be publicly disclosed The

Directors discussed next steps for aressin the issues and for communicating with

the OTS directed management to resolve who should lead the exam re e i tion

effort and directed Mr Meyerson to address the disclosure question Mr Rotella

then responded to a question from r Lillis regarding the internal employee

communications regarding resolution of some of the issues

Mr Frank then asked the Directors to consider whether they were comfortable with

their understanding of the financial information in the materials and which Mr Casey

had started to review earlier

in

the meeting given the time constraints and noting

that much of it had been presented at both the Audit and Finance Committee

meetings earlier that day and the prior day Mr Bonderman indicated that in the

future he would like to see more summary information less detailed factual data

Mr Casey agreed provided a data point asked for earlier in the meeting Mr

Frank then asked Mr Rotella to present his operations update

Poject Restart

Mr Rotella submitted the written material for Project Restart but did not go through

the presentation with the Board

Project SpringProject SEALMr Rotella asked the Board to refer to the updated version of the materials handed

out at the meeting concerning the plans for branch sales and store closures referred

to as Project Spring and Project SEAL respectively Mr Rotella presented the

material noting that a sale of branches was currently being negotiated He

responded to questions from the Board regarding operating losses savings and

alternatives considered regarding branches

Doc 183723


HIGHLY CONFIDENTIAL



J 71508

Supplemental Written Financial Report

Mr Frank noted the Boards receipt of an additional written Financial Report with

regard to the Holding Companys financial performance in the second quarter of

2008

Informational Reports

Mr Frank directed the Boards attention tote following three reports that had been

previously provided to the Board Investor Relations port Regulatory Matters

Report and Media Analytics Report

Messrs Koch and Robinson then entered the room and r Frank submitted report

on the Compliance Committee of the Bank to the Banks Board of Directors

Messrs Koch and Robinson left the meeting when the report was concluded

Audit Commiftee RepoMr Frank reported on the meeting of the Audit Committee which had met in joint

session with the Audit Committee of WMB He reported that the Committee had

reviewed the earnings press release forte second quarter of 2008 earnings driver

guidance and the Controllers Report Mr Frank reviewed some of the issues

reviewed by the Committee including the impact of the beneficial conversion

feature modifications to the allowance for loan losses and the decision to not

recognize goodwill impairment in the second quarter The Committee had

reviewed and approved tax services to be provided by Deloitte and had reviewed

Moss Adams report of the WaMu Savings Plan Mr Frank described a letter

provided by Mr Schaub of Deloitte regarding the results of the PCAOB review of

the Holding Companys audit He reported on findings and observations made by

Audit Services and the results of investigations by the Corporate Fraud

Investigations department He described a report by Mr McMurray to the Audit

Committee on enterprise risk management and noted some of the key risks facing

the business He noted the regulatory report submitted by Mr Robinson which wasconsistent with the report from the examiners Mr Frank then described a report

submitted by Mr Landefeld regarding enterprisewide compliance risk and noted

the progress made in the search for a new chief compliance officer He then

described r Solenders report to the Audit Committee on legal issues noting

trends

in litigation

Report of Finance Commiftee

Mr Smith submitted a report of the Finance Committee meeting which had met in

joint session with the Finance Committee of WMB Mr Smith reported that the

Finance Committee reviewed a deep dive report on credit which included

information on the housing market the performance of loans

in the Banks portfolios

and information on cumulative losses overall The Committee also reviewed a deepdive report on capital and liquidity including a report that management believes the

Doc 183723


HIGHLY CONFIDENTIAL



WMI 71508

capital position to be adequate based on the stress conditions outlined in the long

range forecast although rating agency and regulatory agency scrutiny is expected to

continue Mr Smith noted that much of the information reviewed at the Finance

Committee meeting had also been raised earlier during the Board meeting

WMI Approval of Dividend

Mr Smith reported that the Finance Committee recommended approval of a

dividend on common stock of one cent per share and cash dividends on the Series

K and Series R preferred stock

in

the form presented The material submitted

included the Holding Companys available liquidity and capital position giving effect

to the dividends On a motion duly made and seconded the resolutions submitted

to authorize the dividend were unanimously adopted by the Board as presented A

copy of the resolutions adopted will be maintained as an appendix to these minutes

in the minute book

Update on Director Search

Mr Leppert directed the Boards attention to material that had been handed out

earlier which he had brought to the meeting He reported that SpencerStuart had

been engaged to conduct the search for director candidates and he described someof the analysis undertaken by the firm to assess the current Boards expertise and

characteristics as compared to the Boards of peer institutions described the

results of some of that analysis and then described the profiles developed for

targeting possible candidates He then announced that a Governance Committee

meeting was scheduled for midAugust so that the committee could discuss the

profiles and candidates He asked the Board to provide him with feedback

Officer Elections

On a motion duly made and seconded the Board unanimously approved certain

officer elections promotions transfers terminations and other changes A copy of a

schedule of all such changes as submitted to the Board will be appended to these

minutes and will be kept in the minute book

Mr Frank then asked all management to leave the room except for Messrs Killinger

and David in

order to convene in

executive session

Executive Session Resources Committee

The Board commenced an executive session Mr Stever submitted the report of the

Human Resources Committee which met in joint session with the Human

Resources Committee of WMB The Committee received a report of the Plan

Investment Committee on pension and savings plans including a change to the

limits percentage of new 401k contributions that may be invested in Holding

Company Stock The Committee heard a report from the Plan Administration

Committee on health plan changes for 2009 The Committee ratified and approved

various changes to the language of change in

control agreements with employees

Doc 183723 8


HIGHLY CONFIDENTIAL



WMI 71508

The Committee approved a proposal which allows the Chief Executive Officer to use

shares of the Holding Companys stock in satisfaction of tax withholding obligations

from former stock option gain deferral Mr Stever reported that after lengthy

discussion regarding the proposed Executive Stock Purchase Program the

Committee had approved the Program Mr Stever also reported on discussions

regarding plans proposed for retention of key executives

Approval of Stock Option Purchase Program

Mr Stever reported that the Human Resources Committee recommended approval

of a stock option purchase program He described the terms of such a program

using the presentation material previously provided to the Board labeled Program

Summary and then described the views of the Committee Upon a motion duly

made and seconded the Board unanimously adopted the resolutions as presented

to the Board as a handout A copy of the resolutions as approved will be kept with

the minutes

in

the minute book as an appendix

Messrs David and Killinger left the meeting after the report of the Human Resources

Committee

Executive Session without CEO

During the final executive session the Board discussed the results of the midyear

evaluation of the CEO conducted the previous evening and discussed various

personnel and human resources issues The Human Resources Committee

reconvened its meeting during the executive session

The meeting was adjourned at approximately 730 pm


Appendices

A Dividends

B Stock Option Purchase Program

Doc 183723 9


HIGHLY CONFIDENTIAL

APPENDIX A

WASHINGTON MUTUAL INC

DECLARATION OF DIVIDENDS

Dividend Stock

RESOLVED that a dividend of $001 per share of common stock

is declared to

be payable on August 15 2008 to tpersons who are holders of record of the commonstock of the Corporation as of July 31 2008

Dividend Series Preferred Stock

RESOLVED that a dividend of 101112 per share of Series K preferred

stock

is declared to be payable on September 15 2008 in cash to the persons who are

holders of record of the Series K preferred stock of the Corporation as of September 12008

Dividend Series Preferred Stock

RESOLVED that a dividend of 19056 per share of Series R preferred stock

is declared to be payable on September 15 2008 in

cash to the persons who are

holders of record of the Series R preferred stock of the Corporation as of September 12008

General

RESOLVED that the officers of the Corporation are hereby authorized to

prepare and file all required notifications and reports with The New York Stock

Exchange or with such other regulatory authorities as such officers may deem to be

appropriate to effectuate such dividends

RESOLVED FURTHER that this declaration of dividends shall not become

effective until the later of A July 15 2008 or B the date of compliance with all

applicable statutory and regulatory requirements


HIGHLY CONFIDENTIAL

APPENDIX

RESOLUTIONSADOPTED BY

BOARD OF DIRECTORS


a Washington corporation

July 15 2008

APPROVAL OF STOCK OPTION

WHEREAS Washington Mutual Inc a Washington corporation the

Corporation has granted stock options to its employees under the WashingtonMutual 1994 Stock Option Plan as amended and restated the 1994 Plan and under

the Washington Mutual Inc 2003 Amended and Restated Equity Incentive Plan theI 1

WHEREAS many of the stock options granted under the 1994 Plan and the EIP no

longer provide the intended incentive to eloyees because of the decline

in market

price of the Corporations common stock

WHEREAS the Board of Directors of the Corporation the Board has considered

a proposed Stock Option Purchase Program pursuant to which the Corporation would

offer to purchase for cash certain outstanding employee stock options held by eligible

employees as described and on the terms and conditions set forth in an Offer to

Purchase the Offer which has been presented to and reviewed by the Board and is

attached Exhibit A the Offer to Purchase

WHEREAS the Human Resources Committee of the Board has recommended

that the Board approve and adopt the Stock Option Purchase Program and the Offer

with final pricing and other terms to be approved by the Human Resources Committee

based on a pricing period to follow the release of the Corporations Q2 2008 earnings

WHEREAS the Chief Financial Officer of the Corporation has informed the Board

that the Corporations purchase of stock options pursuant to the Offer would not result

in

the Corporations a inability to pay its liabilities as they become due in the usual course

of business or b total assets being less than the sum of its total liabilities plus the

amount that would be needed if

the Corporation were to be dissolved at the time of the

Offer to satisfy the preferential rights upon dissolution of shareholders whose

preferential rights are superior to those of option holders participating in the Offer and

therefore the Corporation would satisfy the requirements set forth

in WashingtonRevised ode Section 23B06400


HIGHLY CONFIDENTIAL

WHEREAS the Amended and Restated Articles of Incorporation of te

Corporation does not prohibit the Corporation from purchasing stock options pursuant to

the Stock Option Purchase Program and

WHEREAS the Board believes that the Stock Option Purchase Program and the

Offer are in

the best interests of the Corporation

Now THEREFORE IT RESOLVED that the Stock Option Purchase Program and

the Offer be and they hereby are adopted and approved substantially upon the terms

and subject tote conditions set forth

in

the Offer to Purchase but with final pricing and

other terms to be approved by the Human Resources Committee based on a pricing

period to follow the release of the Corporations 02 2008 earnings

RESOLVED FURTHER that subject to final approval of pricing and other terms by

the Human Resources Committee the Chief Executive Officer the Chief Human

Resources Officer the Chief Legal Officer and any all other officers of the

Corporation acting at the direction or under the supervision of any such officer acting

alone or together the Authorized Officers be and each of them hereby individually

is

authorized and empowered in the name and on behalf of the Corporation to

implement the Stock Option Purchase Program and to effect and consummate the Offer

on the terms and conditions set forth in the Offer to Purchase and in such a manner as

such officers deem necessary proper and advisable and as a result acquire for cash

up to all of the eligible options from eligible employees as set forth

in

the Offer to

Purchase the commencement of the Offer constituting conclusive evidence of such

approval and authorization and that the terms of the Offer are in accordance with this

resolution and constitute the duly authorized acts of the Corporation

RESOLVED FURTHER that the Authorized leers be and each of them hereby is

authorized and empowered in the name and on behalf of the Corporation to issue

whatever press releases and to prepare execute distribute deliver and file as

applicable with the Securities and Exchange Commission any and all public filings

pursuant to the Securities Exchange Act of 1934 as amended the Exchange Actincluding without limitation a Tender Offer Statement on Schedule TO and exhibits

supplements or amendments thereto that such officer or officers may deem necessary

appropriate or advisable the publication distribution andor filing thereof to constitute

conclusive evidence of such approval and that the same are in accordance with this

resolution and constitute the duly authorized acts of the Corporation


the Human Resources Committee the Authorized leers be and each of them hereby

is

authorized and empowered in

the name and on behalf of the Corporation to execute

and deliver such agreements instruments and documents and to do or cause to be

done any and all acts and things as any such officer shall determine to be necessary

proper or advisable to implement the Stock Option Purchase Program to effect and

consummate the Offer and the transactions contemplated in the Offer to Purchase and

to fulfill the Corporations obligations thereunder including without limitation delivering

Offerrelated documents and materials to eligible employees obtaining any consents or


HIGHLY CONFIDENTIAL

waivers from third parties before consummating the Offer engaging service providers in

connection with the Program and the Offer such agreements instruments and

documents to be in such form and to contain such terms and conditions as shall be

approved by the officer executing the same such officers execution and delivery of

such agreement instrument or document to constitute conclusive evidence of such

approval and that the same are in accordance with this resolution and constitute the

duly authorized acts of the Corporation

RESOLVED FURTHER that the Authorized Officers be and each of them hereby

individually is authorized and empowered in the name and on behalf of the

Corporation to take all action necessary to comply with any and all applicable laws in

respect of the Stock Option Purchase Program and the Offer and to take such other

action as he or she may deem necessary or appropriate in connection with the Stock

Option Purchase Program and the Offer or to carry out the intent of the foregoing

resolutions

RESOLVEDFURTHER that subject to final approval of pricing and other terms by

the Human Resources Committee the Authorized Officers be and each of them hereby

individually is

authorized and empowered in the name and on behalf of the

Corporation to exercise discretion in administering and implementing the Stock Option

Purchase Program and effecting the Offer accept for purchase all eligible options

tendered by eligible employees under the Stock Option Purchase Program and

pursuant to the Offer and to pay or cause to be paid all amounts owed to tendering

eligible employees for the purchase of such options and


the Human Resources Committee the purchase of eligible options under the Stock

Option Purchase Program and pursuant to the Offer be and hereby are approved for

all purposes including for purposes of satisfying the available exemptions under Rule

16b3 of the Exchange Act

RESOLVED that the Authorized Officers be and each of them hereby individually

is authorized directed and empowered in

the name and on behalf of the Corporation

to take all actions and do all things necessary and appropriate to effectuate the

preceding resolutions including making execution and delivery of all documents

exhibits agreements waivers papers undertakings instruments and certificates filing

with the SEC such notices documents or other items paying or causing to be paid all

costs and expenses incurred by or on behalf of the Corporation in connection with the

transactions referred to in

these resolutions including without limitation all fees related

to the Schedule TO and any and all filings with the SEC and any other governmental

authorities andor performing such other acts as each officer of the Corporation mayfrom time to time deem necessary desirable or appropriate in order to carry out the

intent and purpose of the foregoing resolutions and


HIGHLY CONFIDENTIAL

RESOLVED FURTHER that the acts and deeds heretofore done by any of the

officers of the Corporation and any employee or agent of the Corporation acting on

behalf of an officer to effect the purpose and intent of the foregoing resolutions be and

hereby are adopted ratified confirmed and approved in all respects


HIGHLY CONFIDENTIAL

180833

Offer Purchase

180833


HIGHLY CONFIDENTIAL

Ext1libit A

From: Brouwer, Curt

To: Anderson, Jason S. US Seattle)

Sent: 8/21/2008 6:54:23 PMSubject: Per our discussion

Attachments: Discussion Materials 032608.pdf

As we discussed, only provide this document to Jim until we have further discussionswith Todd tomorrow.

Curt <<...>>

Curt Brouwer

Washington Mutual

Senior Vice President, Corporate Tax

1301 Second Ave., WMC3201

Seattle, WA 98101

206.500.4155 direct 206.377.3018 fax

E-mail: [email protected]

IRS Circular 230 Disclosure: To Ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal

tax advice contained in this communication including any attachments) is not intended or written to be used, and cannot be

used, for the purpose of i) avoiding penalties under the Internal Revenue Code or ii) promoting, marketing or recommending

to another party any transaction or matter addressed herein.

CONFIDENTIALITY NOTICE: This message including any attachments) is confidential and may contain sensitive information. Do

not disseminate this information to parties who do not have the authorization to view this material. If you are not the

intended recipient of this information or an employee or agent responsible for delivering this message to the intended

recipient(s), please do not read, disseminate, distribute or copy this information. If you have received this message in

error, please contact the sender immediately. Washington Mutual reserves the right tomonitor all e-mail. Electronic mail

sent through the Internet is not secure.

CONFIDENTIAL

Restricted For Use in Connection with Plan Confirmation Only WMI_PC_111210525.00001

Project Olympic

Discussion Materials

26 March 2008

CONFIDENTIAL


Summary

Project Olympic

1

• Cerberus has significant interest in a partnership with WaMu

• Partnership will be a strategic and financial investment

–Significant value created through synergies and revenue enhancement

opportunities; access to other Cerberus portfolio companies

–Material equity investment by Cerberus

• Creation of SPV majority owned by Cerberus to buy residuals from

securitization of

higher-risk assets

• WaMu acquisition of

Chrysler Financial provides asset and earnings

diversification as well as substantial tangible equity capital

• Cerberus team able to move quickly

CONFIDENTIAL


Advantages for WaMuProject Olympic

2

• Diversification of

balance sheet and business

–Mortgage loans fall from ~73% of

loans to ~57% of

loans on a managed basis: adds auto, and

expands commercial and small business loans

–Exclusive access to all subvented automotive loans and leases through 9 year exclusivity

agreement with Chrysler

–$ 75 billion managed auto loan portfolio; $ 40 billion on-balance- sheet portfolio

–Improved diversification will improve valuation in public market

–Minimal auto lease residual risk (0.5%)

• SPV accelerates problem asset disposition

• Utilization of

significant excess capital at

Chrysler Financial

–Chrysler Financial has tangible common equity of

$7.4Bn( 1)

resulting in a tangible common to

tangible assets ratio of 17%

• Value creation through synergies

–Access to 3.6 millioncustomers and over 3,000 dealerships (both Chrysler and non- Chrysler

dealers)

–Ability to create affinity branded credit card, deposit and other products

–Potential cost saves from combining certain servicing functionality

• Access to new capital

–Cerberus willing to invest additional capital in new company

Note

1.

Preliminary. Audit complete subject to final purchase accounting adjustment

CONFIDENTIAL


Resulting Ownership( 1)

• WaMu ownership split between current WaMushareholders, Chrysler Holding and Cerberus

Proposed Structure

Project Olympic

3

Transaction Steps

• WaMu issues shares to Chrysler Holding in exchange

for Chrysler Financial

– Chrysler Financial sold to WaMu at

tangible book

value

• Cerberus purchases $500 million of

newly issued

WaMu equity

Daimler

Public

Shareholders

100%

Chrysler

Financial

TBV: $ 7.4Bn

Cerberus

20% 80%

$7.4Bn

Shares

WaMu

Public

Shareholders

Chrysler

Holding

Chrysler

Financial

WaMu

• For illustrative purposes, wehave used WaMu’s current

market cap of $11.2 billion

based on

3/ 25/ 08 stock price

of

$12.70 to calculate pro

forma ownership

percentages

• Cerberus willing to work with

OTS on structuring

investment

• SPV

–WaMu writes-down to

current value and

securitizes up to $48 billion

of

higher-risk loans

–Cerberus creates wholly

owned SPV to buy

residuals interest in the

trust and WaMu retains the

most senior tranches

$0.5Bn

$0.5Bn

shares

Note

1.

Based on market cap at

3/ 25/ 08

Chrysler

Holding

Cerberus

Pro Forma Ownership

Valuation

($MM) %Ownership

Existing WaMu (Current Market Cap) $ 11,207(

1)

58.7%

ChryslerFinancial (Tangible Book) 7,387 38.7%

New Raise (Cerberus) 500 2.6%

Total $ 19,094 100.0%

Assuming Subsequent Distribution Cerberus 33.6%

of Shares

by Chrysler Holding: Old Shareholders 58.7%

Daimler 7.7%

Total 100.0%

CONFIDENTIAL


Retail Financing

48%

Operating Lease

28%

Dealership

Financing & Other

25%

Portfolio by Product

% of

$ 75 billion 12/ 31/ 07

ChryslerFinancial: A Leading Auto Lender

Project Olympic

4

Overview

• Leading provider of

financial services for dealers

and customers of

the Chrysler, Dodge and Jeep

brands

– $ 75 billion managed portfolio (Avg FICO: 705)

– Over 2.7 million consumer loans and over

900,000 leases serviced (3.6 million total

customers) with avg. transaction size of

~$ 25,000

– Over 3,000 dealers serviced

– 4,150 employees

• Broad presence across the Americas, with

operations in the U.

S., Canada, Mexico,

Venezuela and Puerto Rico

• Major products are retail loans, leases and

dealership finance plans

– Includes Business Vehicle Finance (BVF)

business with $1.6 billion of

assets which serves

small businesses

• 2008E pre-tax income of

$459 million and

12/ 31/ 07 tangible book value of $7.4 billion( 1)

– Estimated earning asset yield of 8.4%( 2)

U.

S.

83%

Canada

14%

Mexico

2%Other 1%

Portfolio by Region

%

of

$75 billion 12/ 31/ 07

Notes

1.


2.

Assets are originated at

fixed rate

CONFIDENTIAL


Auto

17%

Card

8%

Mortgage

57%

Commercial

19%

Pro Forma 12/ 31/ 07 Managed Loans

% of

$335Bn

Provides Diversification and Capital Strength

Project Olympic

Notes

1.

Excludes OCI from equity

2.

Assumes 2008 provision of

$13Bn

3.

Pro forma for $500 million of

new equity issued to Cerberus

4.

Based on

all balance sheet loans plus securitized credit card portfolio 5

Card

10%

Mortgage

73%

Commercial

17%

WaMu 12/ 31/ 07 Managed Loans( 4)

%

of

$260Bn

• Mortgage assets decrease

from 73% to 57%

• Auto assets represent 22% of

managed loans (5% included

in Commercial)

• Significant capital creation

–$6.0 billion of

capital

created above current

WaMu tangible common

ratio

12/ 31/ 07A 12/ 31/ 08P Mid Case(

2)

PF + PF +

WaMu CF New Raise ( 3)

WaMu New Raise ( 3)

Tangible Equity / Tangible Assets( 1)

6.6% 17.0% 8.0% 5.6% 7.2%

Tangible Common Equity / Tangible Assets 4.3% 17.0% 6.0% 3.1% 5.1%

Capital Above 5.50% TE/ TA ($ MM) 9,026 5,955

Capital Above 4.75% TC/ TA ($ MM) 4,453 1,218

Capital Created Above Current WaMu TC/ TA ($ MM) 5,970 6,822

CONFIDENTIAL


Benefits of

Asset Diversification

0.03 R2 Correlation between Mortgages and Prime Auto

Project Olympic

6

0.00

2.00

4.00

6.00

8.00

Apr-

89 Dec-

90 Aug-92 Apr-94 Dec-

95 Aug-

97 Apr-

99 Dec- 00 Aug- 02 Apr-04 Dec-

05 Dec- 07

Credit Card Mortgages Prime Auto

Historical Industry Charge- Offs

(%)

Sources Moody’s, FDIC

5.10%

1.21%

0.49%

Net Charge-Offs

(%)

Credit Prime

Card Mortgages Auto

Current 5.10 0.49 1.21

1-

Yr

Avg. 4.67 0.26 0.79

5-

Yr

Avg. 5.54 0.13 0.87

10-

Yr

Avg. 5.80 0.12 1.10

CONFIDENTIAL


GAAP EPS Accretion/( Dilution)

$

2009E EPS (Mid-Case) 1.12 2009E EPS (Mid-Case) 1.12

With $4Bn Capital Raise @ $12.70 0 .83 Pro Forma with Chrysler ex Synergies(

2)

0.97

With $4Bn Capital Raise @ $10.00 0 .78 Pro Forma with Chrysler w/ Synergies

( 3)

1.20

% Change vs Standalone 7%

%Change @ $12.70 (26%) % Change

vs Capital Raise @ $12.70 44%

%Change @ $10.00 (30%) % Change


Accretive to Earnings Relative to Equity Issuance

Project Olympic

7

• ~$ 570 millionpre-tax synergy

run-rate potential( 1)

45-55% less dilutive

Notes

1.

Based on funding synergy of

1.5% applied to $38Bn debt. Share of

ultimate funding synergies is subject to negotiations with Daimler

2.

Assumes Chrysler Financial adjusted earnings and 5% net income growth from ’ 08 plan. $12.70 per share issuance price ( 3/ 25/ 08 market price)

3.

$ 570 million pre-tax synergies taxed at 38%

CONFIDENTIAL


Potential Synergies

Project Olympic

8

• Potential to cross-sell additional products ( e.

g., deposits, mortgage)

– 3.6 million current Chrysler Financial customers

• Opportunity to increase ChryslerFinancial’s penetration rate with lower

cost of

funds and broader product offering

– Current US penetration rate is 41% of

Chrysler Automotive retail sales, while

universe of

potential customers is 92% (excluding 8% cash buyers)

– This 51% penetration rate opportunity equates to over 900,000 annual contract

originations and over $ 25 billion of

annual originations

– Additional opportunities in Canada, Mexico and Puerto Rico

• Access to a network of

over 3,000 dealers (including over 2,500 US dealers,

390 Canadian dealers and 175 Mexican dealers)

– Over 60% of

dealers are multi-franchised; dealer count includes over 400 non-

Chrysler dealers

• Access to other Cerberus portfolio companies

– Cerberus companies currently employ over 250,000 people and have millions

of

customers

• On-going auto asset generation to diversify WaMu origination platform

CONFIDENTIAL


Current Capital Structure

Project Olympic

9

Chrysler Financial Funding

$Bn

Funding:

$5.8 · Bank debt ($ 2Bn) L+400 and ($ 4Bn) L+ 650

· Existing term loans would need to be refinanced at

closing

$28.0 · Bank conduit and ABS facilities

· Chrysler Financial would continue to draw down on these facilities until the close of

a transaction at

which point the facilities would term-out (facilities would liquidate

over 3-

5 years as the assets liquidate, with no capacity for new originations)

- As the securitizations roll off, the Company would require new financing sources

to fund ongoing operations

- Average life of

retail loans and leases is 2.5- 3 years; average life of wholesale

loans is 3 months

$7.4( 1

)

· Tangible equity

Note

1.


CONFIDENTIAL


Project Olympic

rITOTOMMOT WDetailed Pro Forma Financials

CONFIDENTIAL


Pro Forma Balance Sheet

12/ 31/ 07A 12/ 31/ 08P

Mid Case

$ MM WaMu CF New WaMu WaMu CF New WaMu

Goodwill & Other Intangibles 7,675 - 7,675 7,675 - 7,675

AFS securities 27,540 86 27,626 NA NA NA

Loans ( includes HFS) 249,789 39,987 289,776 239,268 NA NA

Other tangible assets 42,909 3,471 46,380 59,520 42,618 341,406

Total Assets 327,913 43,544 371,457 306,463 42,618 349,081

Deposits 181,926 - 181,926 189,855 - 189,855

Unsecured debt 38,958 5,796 44,754 31,938 5,248 37,186

Secured debt 63,852 28,000 91,852 52,346 25,354 77,700

Other Liabilities 14,674 2,361 17,035 8,052 4,344 12,396

Total Liabilities 299,410 36,157 335,567 282,191 34,946 317,137

Minority Interest 3,919 - 3,919 3,917 - 3,917

Preferred Equity 3,392 - 3,392 3,392 - 3,392

Common Equity 21,192 7,387 28,579 16,963 7,672 24,635

Liabilities and Equity 327,913 43,544 371,457 306,463 42,618 349,081

Key Ratios$500MM New

Raise

$ 500MM New

Raise

Loans / Deposits 1.37x 1.59x

Deposits / Total Assets 55.5% 49.0% 62.0% 54.4%

Common Equity / Total Assets 6.5% 17.0% 7.7% 7.8% 5.5% 18.0% 7.1% 7.2%

Tangible Equity / Tangible Assets(

1)

6.6% 17.0% 7.9% 8.0% 5.6% 18.0% 7.1% 7.2%

Tangible Common Equity / Tangible Assets 4.3% 17.0% 5.8% 6.0% 3.1% 18.0% 5.0% 5.1%

Preferred as a % of

Tangible Equity 35.1% 25.9% 25.5% 44.0% 0.0% 30.1% 29.5%

Detailed Pro FormaFinancials


Project Olympic

10

• Additional common equity

provides capacity for

preferred

Note

1.


CONFIDENTIAL


2008E Pro Forma Income Statement

WaMu New WaMu$MM (Mid Severity) CF Synergies (

1)

with Synergies

Net interest margin 8,829 8

87 570 10,286

Provisions 13,050 4

50 - 13,500

Gross margin (4,221) 4

37 570 (3,214)

Non- interest income 5,779 7

99 - 6,578

Non- interest expense 8,220 7

77 - 8,997

Income before taxes (6,662) 4

59 5

70 (5,633)

Minority interest 305 - - 305

Taxes (2,885) 174 217 (2,494)

Net income (4,082) 2

85 3

53 (3,444)

Plus: provisions 13,050 4

50 - 13,500

Plus: insurance losses - 77 - 77

Plus: taxes (2,885) 1

74 217 (2,494)

Plus: incremental NIM

on new capital raised 18 - - 18

Plus: incremental cost cutting savings - 29 - 29

Subtotal 6,101 1,015 5

70 7,686

Less: normalized provision (500) (310) - (810)

Less: preferred dividends (260) - - (260)

Adjusted earnings before taxes 5,341 7

05 570 6,616

Taxes 2,514

Adjusted net income 4,102


Pro Forma Income Statement

Project Olympic

11

Note

1.




CONFIDENTIAL


Project Olympic

Chrysler Financial Overview

CONFIDENTIAL



Product Overview: Customer Financing and Leasing

Project Olympic

12

Retail¹ Lease

Portfolio ($ bn) $34.4 $22.0

% of

total 46.0% 29.4%

Origination volume ($ bn) $17.5 $10.5

3-year CAGR (8%) 19%

Penetration rate 28.5% 20.5%

Net chargeoff ratio (US) 1.30% 1.09%

Description � Majority of

portfolio is conventional

financing with equal monthly payments up to

72 months

� New and used motor vehicles

� Subvented rates offered via Chrysler

Automotive marketing efforts

� Fixed rate simple interest loans

� Specialized offerings include: delayed

payment options, College Graduate Finance

Plan, Chrysler Financial Plus (balloon note

with buyback option), Farmer Payment Plan

and other niche programs

� Conventional lease program up

to 48 months

—new Chrysler Automotive products only

� Subvented payments offered via Chrysler

Financial marketing programs

� Customer EOT options: return vehicle

(subject to contractual charges), exercise

purchase option (contract residual)

� Customers may be offered lease extensions

on lease- to-retail conversions for loss

mitigation purposes

Customer financing and leasingCustomer financing and leasing

Note: As

of or for the year ended 12/ 31/ 07

¹ Include balloon note financing

CONFIDENTIAL



Product Overview: Dealer Financing

Project Olympic

13

Floor plan Capital loans and Real estate Dealer Rental Car (DRAC)

Portfolio ($ bn) $13.7 $2.2 $ 0.1

% of

total 18.4% 3.0% 0.1%

Penetration rate 74.6% NA NA

Description � Dealer inventory financing

—new and used vehicles —

for Chrysler Automotive and

non- Chrysler Automotive

dealers

� Rates tied to sales volume

and total financing

relationship

� Rates based on either LIBOR

or prime, depending on

dealer relationship size

� Provides dealer with working

capital needs

� Typical capital loan is 60 months —

level monthly principal payments

plus interest

� Some revolving lines offered on an

interest only basis

� Rate is new floorplan rate +

additional margin

� Typical real estate loans are fixed

rate, 20-year amortization with

rate / loan renewed at

5- year

intervals (indexed to 5- year T-bills)

� Financing for Dealer Rent- A-

Car program

� Vehicles are normally used as

service loaners

� Some dealers use program to

run local daily rental

companies

� Various incentives may

include upfront allowances

and guaranteed depreciation

� Dealer pays monthly

amortization payments,

interest and insurance

Dealer financingDealer financing

Note: As


CONFIDENTIAL



Product Overview: Small Business and Fleet Financing

Project Olympic

14

Business Vehicle Finance (BVF) Fleet

Portfolio ($ bn) $1.6 $0.7

% of total 2.2% 0.9%


3-year CAGR 84.0% NM

Description � Retail and lease financing for small

to medium size businesses

� Tailored terms and conditions to

meet customer needs

� Currently integrated with DC Truck

Financial in Chicago for

underwriting, customer service and

collections

� Two primary customer groups —daily

rental companies and dealer in-house

lease companies

� Chrysler Financial receives monthly

payments —simple interest on daily

outstandings plus principal amortizations

on individual vehicles

� Fleet companies manage all customer

contacts and collections

Small business and fleet financing servicesSmall business and fleet financing services

Note: As

of

or for the year ended 12/ 31/ 07

CONFIDENTIAL



Portfolio Statistics by Country

Project Olympic

15

End

of Period On- Balance Consumer Wholesale

Net Managed Sheet Penetration Penetration

Portfolio Portfolio Rate Rate1

U.

S.

· Consumer: Retail (new &

used), Lease $43,990 $28,217 48.1% 75.0%

· Dealer: Floorplan, Capital

Loan, Real Estate, Dealer

Rental $13,117 $6,385

· Small Business: Fleet

financing, Business Vehicle $2,156 $2,156

Canada · Consumer: Retail (new &

used), Lease2

$10,548 $175 81.8% 87.1%


Loan, Real Estate $2,297 $512


financing $207 $207

Mexico · Consumer: Retail (new &

used), Lease $1,359 $1,359 48.6% 100.0%


Loan $513 $513

Puerto Rico · Consumer: Retail (new &

used), Lease $252 $252 36.4% 55.5%


Loan $

33 $

33

Venezuela · Consumer: Retail (new &

used), Lease $109 $109 9.9% 96.0%


Loan $

69 $

69

Total $74,650 $39,987 51.0% 77.0%

(

1)

Based on Field Stocks (units)

(

2)

Includes Gold Key Leases held

at OEM

12/ 31/ 07

$MM Portfolio

State

($ billion) Percent

Texas 3.3 12.9%

California 2.1 8.1%

Florida 1.4 5.5%

Pennsylvania 1.2 4.7%

Illinois 1.0 3.8%

Other 16.8 65.0%

Total 25.8 100.0%

Portfolio

State

($ billion) Percent

Michigan 5.3 33.5%

New York 1.8 11.7%

Ohio 1.2 7.8%

Florida 0.9 5.8%


Other 5.7 36.0%

Total 15.8 100.0%

Portfolio

State

($ billion) Percent

Texas 1.8 13.8%

California 1.0 7.6%

Florida 0.9 6.7%

Michigan 0.7 5.6%

New York 0.6 4.3%

Other 8.1 62.0%

Total 13.1 100.0%

US Retail Portfolio - Top 5 States (12/ 31/ 07)

US Lease Portfolio - Top 5 States (12/ 31/ 07)

US Dealer Portfolio - Top 5 States (12/ 31/ 07)

CONFIDENTIAL


Project Olympic

Chrysler Automotive Overview

CONFIDENTIAL


12.6%12.9% 13.2%

12.6%

13.1%

14.9%16.0%

17.0%

19.9%

24.6% 24.9%

14.6%

24.0%

25.7%

28.1%

30.6%

33.7%

23.3%

4%

9%

14%

19%

24%

29%

34%

'

92

' 93 ' 94 '

95

' 96 '97 ' 98 '99 ' 00 ' 01 '

02

' 03 '04 ' 05 ' 06 ' 07

* - Includes Jobs Bank

** - Only reflects 8,400 hourly workforce reduction due

to

RTP II.

Salary

Manpower

Hourly

Manpower

Total

Manpower(000’ s Headcount)

45.2

53.6

61.0

21.5

19.1

19.1

' 06 Actual ' 07 Actual ' 08 PF

82.5 *

72.7 *

64.3

**


ChryslerAutomotive –Strong Recent Performance

Project Olympic

16

• Stability in U.

S.

geographic segment share since ’92 relative to significant declines in other big Detroit competitors

• Strong balance sheet with $9.7 billion unrestricted cash

• Broad and diverse dealer base –over 3,000 dealers in the U.

S.

• Strong product line up supported by key new vehicle release –2008 minivan, 2009 Dodge Ram truck, 2009 Dodge

Journey

• Well positioned in growing international geographical segments

• Rationalization of

legacy cost base

GM

Ford

Chrysler

Rationalized cost base U.

S.

Geographical Segment Total (1992 - 2007)

Performance Highlights

CONFIDENTIAL


Project Olympic Chrysler Automotive Overview

17

2007 Actual vs 2008 Plan

Actual

2007

Plan

2008

2008 H/(

L)

2007

Total Geographical Segment Share (%) 12.6 11.5 (1.1 pts)

SAAR (MM of

units) 16.4 15.5 (0.9)

Worldwide Shipments (000s) 2,610 2,344 (266)

Net Revenue ($ Bn) 59.7 58.1 (1.6)

Fixed Cost ($ Bn) 14.5 12.9 (1.6)

EBITDA ($ Bn) 1.6 2.0

( 2)

0.4

OpProfitDA ($ Bn) 2.2 2.9 0.7

Cash ($ Bn) 9.7 7.4 (2.3)

Estimated Dealer Inventory (yr-end) –000s 438 325 (113)

CAPEX ($ Bn) 3.1 3.0 (0.1)

Notes

1.

Preliminary and un-audited financial results

2.

2008 business plan EBITDA of

$ 2.0Bn is unchanged from the original Investment Plan

(

1)

CONFIDENTIAL



FinCo / CarCo Relationship

Project Olympic

18

• ChryslerAutomotive (“ Carco”) provides subvention programs exclusively

through Chrysler Financial (“ Finco”)

• Carco makes

all rate subvention payments ( in the case of

below-market APRincentives) upfront to Finco, while residual subvention payments ( in the case o

f

residual enhancements of

leases) are made over the life of

the lease

– Payments are based upon a guaranteed 1.25% ROA for Finco and are discounted

back at

Finco’s marginal cost of

funds

• Finco carries minimal (0.5%) residual value exposure

– When off- lease vehicles are remarketed, the first 1% of

any gain/ loss (relative to

original ALG estimate at

lease inception) is split 50/ 50 between Carco and Finco

– All losses or

gains beyond the 1% threshold are assumed by Carco

• FinCo benefits from a $1.5 billion cash collateral account which supports

all

unsecured exposures between Carco and Finco

– Cash collateral account is held by Carco and exists solely for the benefit of

Finco

– The main exposure this account supports is the risk of

a significant decline in

residual values (since Finco is relying on Carco for reimbursement of

any residual

losses)

– Even under stressed residual value assumptions, this $1.5 billion account is

expected to be sufficient to cover

all unsecured exposures between Carco and Finco

CONFIDENTIAL


AMERICAN INTERNATIONAL COMPANIES0

�AIU Insurance Company

�American Home Assurance Company

� American International South Insurance Company

� AIG Casualty Company

� Granite State Insurance Company

�Illinois National Insurance Company

© National Union Fire Insurance Co of Pittsburgh Pao

� New Hampshire Insurance Company

each of the above being a capital stock company

EXECUTIVE AND ORGANIZATION LIABILITY INSURANCE POLICY

NOTICE COVERAGES A B AND C ARE CLAIMS MADE THE COVERAGE OF THIS POLICY IS

GENERALLY LIMITED TO LIABILITY FOR CLAIMS THAT ARE FIRST MADE AGAINST THE

INSUREDS AND CRISIS FIRST OCCURRING DURING THE POLICY PERIOD AND REPORTED IN

WRITING TO THE INSURER PURSUANT TO THE TERMS HEREIN PLEASE READ THIS POLICY

CAREFULLY AND REVIEW ITS COVERAGE WITH YOUR INSURANCE AGENT OR BROKER

NOTICE AMOUNTS INCURRED FOR LEGAL DEFENSE SHALL REDUCE THE LIMIT OF

LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS AND SHALL BE APPLIEDAGAINST THE RETENTION AMOUNT

NOTICE THE INSURER DOES NOT ASSUME ANY DUTY TO DEFEND THE INSURER MUSTADVANCE DEFENSE COSTS EXCESS OF THE APPLICABLE RETENTION PURSUANT TO THE

TERMS HEREIN PRIOR TO THE FINAL DISPOSITION OF A CLAIM

NOTICE TERMS APPEARING IN BOLD FACE TYPE HAVE SPECIAL MEANING SEE CLAUSE 2

OF THE POLICY

POLICY NUMBER 7419806 REPLACEMENT OF POLICY NUMBER 6269324

DECLARATIONS

ITEMS

1 NAMED ENTITY WASHINGTON MUTUAL INC

herein Named Entity

1a MAILING ADDRESS INSURANCERISK MANAGEMENT DEPT1301 2ND AVE WMC 1201

SEATTLE WA 98101

1b STATE OF INCORPORATIONFORMATION Washington

2 POLICY PERIOD From May 1 2007 To May 1 2008

1201 AM standard time at the address stated in Item 1a3 POLICY AGGREGATE LIMIT OF LIABILITY

herein Limit of Liability

For all Loss in the aggregate under this policy

including Defense Costs $25000000

4 RETENTION Not applicable to NonIndemnifiable Loss and certain Defense CostsSee Clause 6 for details

4a Securities Claims $50000000 4t Employment Practices

Claims $500000004c All other Claims $50000000

7144596

75010 200 BROAG1Ive Cnnv1

HIGHLY CONFIDENTIAL


r

ITEMS continued

5 CONTINUITY DATE herein Continuity Date

a Coverages A and B other than 5b Outside Entity The date on whichOutside Entity Executive Executive coverage the Insured Person

coverage including Coverage C first served as an

Outside Entity

Executive of such

Outside Entity

5c Coverage D NA

6 PREMIUM $1000000

Premium for Certified Acts of Terrorism Coverage under TerrorismRisk Insurance Act 2002 $9901 included in policy premiumAny coverage provided for losses caused by an act of terrorism asdefined by TRIA TRIA Losses may be partially reimbursed by the

United States under a formula established by TRIA as follows 90 ofTRIA Losses in excess of the insurer deductible mandated by TRIA the

deductible to be based on a percentage of the insurers direct earned

premiums for the year preceding the act of terrorism

A copy of the TRIA disclosure sent with the original quote is

attached hereto

CRISISFUNDSM limit SMAdditional CRISISFUND

7a Crisis Loss $50000

79 for Delisting Crisis Loss $25 000

8 NAME ANDADDRESS OF INSURER herein InsurerNational Union Fire Insurance Company of Pittsburgh Pa175 Water StreetNew York NY 10038

This policy is issued only by the insurance companyindicated in this Item 8

7144596

75010 2100 BR0Kive Cony2

HIGHLY CONFIDENTIAL


POLICYHOLDER DISCLOSURE STATEMENT

UNDER

TERRORISM RISK INSURANCE ACT OF 2002

You are hereby notified that under the federal Terrorism Risk Insurance Act of

2002 the Act effective November 26 2002 you now have a right to purchase insurance

coverage for losses arising out of an Act of Terrorism which is defined in the Act as an

act certified by the Secretary of the Treasury i to be an act of terrorism ii to be a

violent act or an act that is dangerous to A human life B property or C infrastructure

iii to have resulted in damage within the United States or outside of the United States

in case of an air carrier or vessel or the premises of a US mission and iv to have been

committed by an individual or individuals acting on behalf of any foreign person or

foreign interest as part of an effort to coerce the civilian population of the United States

or to influence the policy or affect the conduct of the United States Government by

coercion You should read the Act for a complete description of its coverage The

Secretarys decision to certify or not to certify an event as an Act of Terrorism and thus

covered by this law is final and not subject to review There is a $50 billion dollar annual

cap on all losses resulting from Acts of Terrorism above which no coverage will be

provided under this policy and under the Act unless Congress makes some other

determination

For your information coverage provided by this policy for losses caused by an Act

of Terrorism may be partially reimbursed by the United States under a formula

established by the Act Under this formula the United States pays 90 of terrorism

losses covered by this law exceeding a statutorily established deductible that must be

met by the insurer and which deductible is based on a percentage of the insurers direct

earned premiums for the year preceding the Act of Terrorism

COPY OF DISCLOSURE SENT WITH ORIGINAL QUOTE

Insured Name WASHINGTON MUTUAL INC

Policy Number 7419806Policy Period Effective Date From May 1 2007 To May 1 2008

81285 103 Archive Copy

HIGHLY CONFIDENTIAL


IN WITNESS WHEREOF the Insurer has caused this policy to be signed on the

Declarations page by its President a Secretary and a duly authorized representative of the

insurer

e•Q• >k6 SECRETARY

OGPRESIDENT

AUTHORIZED REPRESENTATIVE

COUNTERSIGNATURE DATE

MARSH USA INC

1166 AVENUE OF THE AMERICAS

NEW YORK NY 100363712

7144596

COUNTERSIGNED AT

75010 200 BRCMWAive Cony

HIGHLY CONFIDENTIAL


r

EXECUTIVE AND ORGANIZATION LIABILITY INSURANCE POLICY

In consideration of the payment of the premium and in reliance upon the Application and the

statements therein which form a part of this policy the Insurer agrees as follows

1 INSURING AGREEMENTS

With respect to Coverage A B and C solely with respect to Claims first made against an

Insured during the Policy Period or the Discovery Period if applicable and reported to

the Insurer pursuant to the terms of this policy and subject to the other terms conditions

and limitations of this policy this policy affords the following coverage

COVERAGE A EXECUTIVE LIABILITY INSURANCE

This policy shall pay the Loss of any Insured Person arising from a Claim made against

such Insured Person for any Wrongful Act of such Insured Person except when and to

the extent that an Organization has indemnified such Insured Person Coverage A shall

not apply to Loss arising from a Claim made against an Outside Entity Executive

COVERAGE B ORGANIZATION INSURANCE

i Organization Liability This policy shall pay the Loss of any Organization arising from a

Securities Claim made against such Organization for any Wrongful Act of such

Organization

ii Indemnification of an Insured Person This policy shall pay the Loss of an Organization

arising from a Claim made against an Insured Person including an Outside Entity

Executive for any Wrongful Act of such Insured Person but only to the extent that

such Organization has indemnified such Insured Person

COVERAGE C OUTSIDE ENTITY EXECUTIVE LIABILITY INSURANCE

This policy shall pay the Loss of any Outside Entity Executive arising from a Claim

made against such Outside Entity Executive for any Wrongful Act of such Outside Entity

Executive but only excess of any indemnification provided by an Outside Entity and anyinsurance coverage afforded to an Outside Entity or its Executives applicable to such

Claim except when and to the extent that an Organization has indemnified such Outside

Entity Executive

COVERAGE D CRISISFUNDSM INSURANCE

This policy shall pay the Crisis Loss including Delisting Crisis Loss of anOrganizationsolely with respect to a Crisis including a Delisting Crisis occurring during the

Policy Period or the Discovery Period if applicable and reported to the Insurer pursuant

to the terms of this policy up to the amount of the respective CrisisFund SM from first

dollar provided that payment of any Crisis Loss under this policy shall not waive any of

the Insurers rights under this policy or at law This Coverage D shall apply regardless of

whether a Claim is ever made against an Insured arising from such Crisis and in the case

where a Claim is made regardless of whether the amount is incurred prior to or

subsequent to the making of the Claim

2 DEFINITIONS

a Application means each and every signed application any attachments to such

applications other materials submitted therewith or incorporated therein and any other

documents submitted in connection with the underwriting of this policy or the

underwriting of any other directors and officers or equivalent liability policy issued by

75011 2100 BRive Cony 1

HIGHLY CONFIDENTIAL


the Insurer or any of its affiliates of which this policy is a renewal replacement or

which it succeeds in time and any public documents filed by an Organization with any

federal state local or foreign regulatory agency including but not limited to the

Securities and Exchange Commission SEC

b Claim means

1 a written demand for monetary non monetary or injunctive relief

2 a civil criminal administrative regulatory or arbitration proceeding for monetarynon monetary or injunctive relief which is commenced by i service of a

complaint or similar pleading ii return of an indictment information or similar

document in the case of a criminal proceeding or iii receipt or filing of a notice

of charges or

3 a civil criminal administrative or regulatory investigation of an Insured Person

i once such Insured Person is identified in writing by such investigating authority

as a person against whom a proceeding described in Definition b2 may be

commenced or

ii in the case of an investigation by the SEC or a similar state or foreigngovernmentauthority after the service of a subpoena upon such Insured Person

The term Claim shall include any Securities Claim and any Employment Practices

Claim

c Crisis has the meaning as defined in Appendix B attached to this policy

d CrisisFundSM means

1 in the case of all Crisis Loss other than Delisting Crisis Loss the dollar amountset forth in Item 7a of the Declarations and

2 in the case of Delisting Crisis Loss the dollar amount set forth in Item 7a of the

Declarations plus the additional dollar amount set forth in Item 7b of the

Declarations combined

e Crisis Loss has the meaning as defined in Appendix B attached to this policy

Desisting Crisis Loss means a Crisis Loss resulting solely from a Delisting Crisis

as defined in Appendix B

f Defense Costs means reasonable and necessary fees costs and expenses consented

to by the Insurer including premiums for any appeal bond attachment bond or similar

bond arising out of a covered judgment but without any obligation to apply for or

furnish any such bond resulting solely from the investigation adjustment defense

andor appeal of a Claim against an Insured but excluding any compensation of any

Insured Person or any Employee of an Organization

g Employee means any past present or future employee other than an Executive of

an Organization whether such employee is in a supervisory co worker or subordinate

position or otherwise including any fulltime parttime seasonal and temporary

employee

h Employment Practices Claim means a Claim alleging any Employment Practices

Violation

i Employment Practices Violation means any actual or alleged

1 75011 200 BROKuff ive Cony 2

HIGHLY CONFIDENTIAL


i

1 wrongful dismissal discharge or termination either actual or constructive of

employment

2 harassment including but not limited to sexual harassment

3 discrimination

4 retaliation

5 employment related misrepresentation

6 employment related libel slander humiliation defamation or invasion of privacy

7 wrongful failure to employ or promote

8 wrongful deprivation of career opportunity wrongful demotion or negligent

Employee evaluation

9 wrongful discipline

10 failure to grant tenure or

11 with respect to any of the foregoing items 1 through 10 of this definition

negligent hiring retention training or supervision infliction of emotional distress

failure to provide or enforce adequate or consistent corporate policies and

procedures or violation of an individuals civil rights

but only if such act error or omission relates to an Executive of an Employee of or

an applicant for employment with an Organization or an Outside Entity whether

committed directly indirectly intentionally or unintentionally In addition with respect

to any natural person customer or client Employment Practices Violation shall

mean only actual or alleged discrimination sexual harassment or violation of an

individuals civil rights relating to such discrimination or sexual harassment whether

committed directly indirectly intentionally or unintentionally

j Executive means any

1 past present and future duly elected or appointed director officer trustee or

governor of a corporation management committee member of a joint venture and

member of the management board of a limited liability company or equivalent

position

12 past present and future person in a duly elected or appointed position in an entity

organized and operated in a Foreign Jurisdiction that is equivalent to an executive

position listed in Definition j11 or

3 past present and future General Counsel and Risk Manager or equivalent position

of the Named Entity

1k Foreign Jurisdiction means any jurisdiction other than the United States or any of

its territories or possessions

1 Foreign Policy means the Insurers or any other company of American International

Group Incs AIG standard executive managerial liability policy including all

mandatory endorsements if any approved by AIG to be sold within a Foreign

Jurisdiction that provides coverage substantially similar to the coverage afforded

under this policy If more than one such policy exists then Foreign Policy means the

standard policy most recently registered in the local language of the Foreign

Jurisdiction or if no such policy has been registered then the policy most recently

registered in that Foreign Jurisdiction The term Foreign Policy shall not include any

partnership managerial pension trust or professional liability coverage

m Indemnifiable Loss means Loss for which an Organization has indemnified or is

permitted or required to indemnify an Insured Person pursuant to law or contract or

the charter bylaws operating agreement or similar documents of an Organization

76011 2100 BROXa ive Cony 3

HIGHLY CONFIDENTIAL


n Insured means any

1 Insured Person or

2 Organization but only with respect to a Securities Claim

o Insured Person means any

1 Executive of an Organization

2 Employee of an Organization or

3 Outside Entity Executive

p Loss means damages settlements judgments including prepost judgment interest

on a covered judgment Defense Costs and Crisis Loss however Loss other than

Defense Costs shall not include 11 civil or criminal fines or penalties 2 taxes 3punitive or exemplary damages 4 the multiplied portion of multiplied damages 5any amounts for which an Insured is not financially liable or which are without legal

recourse to an Insured and 6 matters which may be deemed uninsurable under the

law pursuant to which this policy shall be construed

Notwithstanding the foregoing paragraph Loss shall specifically include subject to this

policys other terms conditions and limitations including but not limited to exclusions

relating to profit or advantage deliberate fraud or deliberate criminal acts 11 civil

penalties assessed against any Insured Person pursuant to Section 2g 2B of the

Foreign Corrupt Practices Act 15 USC § 78dd 2g2B and 2 solely with respect to

Securities Claims punitive exemplary and multiplied damages Enforceability of this

paragraph shall be governed by such applicable law that most favors coverage for

such penalties and punitive exemplary and multiple damages

In the event of a Claim alleging that the price or consideration paid or proposed to be

paid for the acquisition or completion of the acquisition of all or substantially all the

ownership interest in or assets of an entity is inadequate Loss with respect to such

Claim shall not include any amount of any judgment or settlement representing the

amount by which such price or consideration is effectively increased provided

however that this paragraph shall not apply to Defense Costs or to any

NonIndemnifiable Loss in connection therewith

q Management Control means 1 owning interests representing more than 50 of

the voting appointment or designation power for the selection of a majority of the

Board of Directors of a corporation the management committee members of a joint

venture or the members of the management board of a limited liability company or

2 having the right pursuant to written contract or the by laws charter operating

agreement or similar documents of an Organization to elect appoint or designate a

majority of the Board of Directors of a corporation the management committee of a

joint venture or the management board of a limited liability company

r No Liability means a final judgment of no liability obtained 1 prior to trial in favor

of each and every Insured named in the Claim by reason of a motion to dismiss or a

motion for summary judgment after the exhaustion of all appeals or 2 after trial and

after the exhaustion of all appeals in favor of each and every Insured named in the

Claim In no event shall the term No Liability apply to a Claim made against an

Insured for which a settlement has occurred

s Non Indemnifiable Loss means Loss for which an Organization has neither

indemnified nor is permitted or required to indemnify an Insured Person pursuant to

law or contract or the charter bylaws operating agreement or similar documents of an

Organization

75011 200 BRO ive Conv 4

HIGHLY CONFIDENTIAL


t Organization means

1 the Named Entity

2 each Subsidiary and

3 in the event a bankruptcy proceeding shall be instituted by or against the

foregoing entities the resulting debtor in possession or equivalent status outside

the United States if any

u Outside Entity means any 1 not for profit entity or 2 other entity listed as an

Outside Entity in an endorsement attached to this policy

v Outside Entity Executive means any 1 Executive of an Organization who is or

was acting at the specific written request or direction of an Organization as an

Executive of an Outside Entity or 2 any other person listed as an Outside Entity

Executive in an endorsement attached to this policy

w Policy Period means the period of time from the inception date shown in Item 2 of

the Declarations to the earlier of the expiration date shown in such Item 2 or the

effective date of cancellation of this policy

x Pollutants means but is not limited to any solid liquid gaseous or thermal irritant

or contaminant including smoke vapor soot fumes acids alkalis chemicals and

Waste Waste includes but is not limited to materials to be recycled reconditioned

or reclaimed

y Securities Claim means a Claim other than an administrative or regulatory

proceeding against or investigation of an Organization made against any insured

1 alleging a violation of any federal state local or foreign regulation rule or statute

regulating securities including but not limited to the purchase or sale or offer or

solicitation of an offer to purchase or sell securities which is

a brought by any person or entity alleging arising out of based upon or

attributable to the purchase or sale or offer or solicitation of an offer to

purchase or sell any securities of an Organization or

b brought by a security holder of an Organization with respect to such security

holders interest in securities of such Organization or

2 brought derivatively on the behalf of an Organization by a security holder of such

Organization

Notwithstanding the foregoing the term Securities Claim shall include an

administrative or regulatory proceeding against an Organization but only if and only

during the time that such proceeding is also commenced and continuously maintained

against an insured Person

z Subsidiary means 1 any for profit entity that is not formed as a partnership of

which the Named Entity has Management Control Controlled Entity on or before

the inception of the Policy Period either directly or indirectly through one or more

other Controlled Entities and 2 any notforprofit entity under section 501c3 of

the Internal Revenue Code of 1986 as amended sponsored exclusively by an

Organization

aa Wrongful Act means

1 any actual or alleged breach of duty neglect error misstatement misleading

statement omission or act or any actual or alleged Employment Practices

Violation

75011 2100 BRQiveCony 5

HIGHLY CONFIDENTIAL


i with respect to any Executive of an Organization by such Executive in his or

her capacity as such or any matter claimed against such Executive solely by

reason of his or her status as such

ii with respect to any Employee of an Organization by such Employee in his or

her capacity as such but solely in regard to any a Securities Claim or bother Claim so long as such other Claim is also made and continuously

maintained against an Executive of an Organization or

iii with respect to any Outside Entity Executive by such Outside Entity

Executive in his or her capacity as such or any matter claimed against such

Outside Entity Executive solely by reason of his or her status as such or

2 with respect to an Organization any actual or alleged breach of duty neglect

error misstatement misleading statement omission or act by such Organizationbut solely in regard to a Securities Claim

3 WORLDWIDE EXTENSION

Where legally permissible this policy shall apply to any Claim made against any Insured

anywhere in the world

In regard to Claims brought and maintained solely in a Foreign Jurisdiction against an

Organization formed and operating in such Foreign Jurisdiction or an Insured Person

thereof for Wrongful Acts committed in such Foreign Jurisdiction the Insurer shall apply

to such Claims those terms and conditions and related provisions of the Foreign Policy

registered with the appropriate regulatory body in such Foreign Jurisdiction that are morefavorable to such Insured than the terms and conditions of this policy However this

paragraph shall apply only to Clauses 1 4 9 13 15 16 18 20 and 21 of this policy and

the comparable provisions of the Foreign Policy In addition this paragraph shall not apply

to the non renewal or claims made and reported provisions of any policy

All premiums limits retentions Loss and other amounts under this Policy are expressed

and payable in the currency of the United States of America If judgment is rendered

settlement is denominated or other elements of Loss are stated or incurred in a currency

other than United States of America dollars payment of covered Loss due under this

policy subject to the terms conditions and limitations of this policy will be made either

in such other currency at the option of the Insurer and if agreeable to the Named Entity

or in United States of America dollars at the rate of exchange published in The Wall

Street Journal on the date the Insurers obligation to pay such Loss is established or if

not published on such date the next publication date of The Wall Street Journal

4 EXCLUSIONS

The Insurer shall not be liable to make any payment for Loss in connection with anyClaim made against an Insured

a arising out of based upon or attributable to the gaining in fact of any profit or

advantage to which the Insured was not legally entitled

b arising out of based upon or attributable to payments to an Insured of anyremunerationwithout the previous approval of the stockholders or members of an

Organization which payment without such previous approval shall be held to have

been illegal

c arising out of based upon or attributable to the committing in fact of any deliberate

criminal or deliberate fraudulent act by the Insured

75011 200 BRGArive Coov 6

HIGHLY CONFIDENTIAL


d alleging arising out of based upon or attributable to the facts alleged or to the same

or related Wrongful Acts alleged or contained in any Claim which has been reported

or in any circumstances of which notice has been given under any policy of which

this policy is a renewal or replacement or which it may succeed in time

e alleging arising out of based upon or attributable to as of the Continuity Date any

pending or prior 1 litigation or 2 administrative or regulatory proceeding or

investigation of which an Insured had notice or alleging or derived from the same or

essentially the same facts as alleged in such pending or prior litigation oradministrativeor regulatory proceeding or investigation

f with respect to any Outside Entity Executive for any Wrongful Act occurring prior to

the Continuity Date if any Insured as of such Continuity Date knew or could have

reasonably foreseen that such Wrongful Act could lead to a Claim under this policy

g alleging arising out of based upon or attributable to any actual or alleged act or

omission of an Insured Person serving in his or her capacity as an Executive or an

Employee of any entity that is not an Organization or an Outside Entity or by reason

of his or her status as an Executive or an Employee of such other entity

h for bodily injury other than emotional distress or mental anguish sickness disease or

death of any person or damage to or destruction of any tangible property including

the loss of use thereof

i which is brought by or on behalf of an Organization or any Insured Person other

than an Employee of an Organization or which is brought by any security holder or

member of an Organization whether directly or derivatively unless such security

holders or members Claim is instigated and continued totally independent of and

totally without the solicitation of or assistance of or active participation of or

intervention of any Executive of an Organization or any Organization provided

however this exclusion shall not apply to

1 any Claim brought by an Insured Person in the form of a cross claim orthirdpartyclaim for contribution or indemnity which is part of and results directly from

a Claim that is covered by this policy

2 any Employment Practices Claim brought by an Insured Person other than an

Insured Person who is or was a member of the Board of Directors or equivalent

governing body of an Organization

3 in any bankruptcy proceeding by or against an Organization any Claim brought by

the examiner trustee receiver liquidator or rehabilitator or any assignee thereof

of such Organization if any

4 any Claim brought by any past Executive of an Organization who has not served

as a duly elected or appointed director officer trustee governor managementcommittee member member of the management board General Counsel or Risk

Manager or equivalent position of or consultant for an Organization for at least

four 4 years prior to such Claim being first made against any person or

5 any Claim brought by an Executive of an Organization formed and operating in a

Foreign Jurisdiction against such Organization or any Executive thereof provided

that such Claim is brought and maintained outside the United States Canada or

any other common law country including any territories thereof

li for any Wrongful Act arising out of the Insured Person serving as an Executive of an

Outside Entity if such Claim is brought by the Outside Entity or by any Executive

thereof or which is brought by any security holder of the Outside Entity whether

75011 200 BROL IJive Conv 7

HIGHLY CONFIDENTIAL


directly or derivatively unless such security holders Claim is instigated and continued

totally independent of and totally without the solicitation of or assistance of or active

participation of or intervention of the Outside Entity any Executive of the Outside

Entity or an Organization or any Executive of an Organization

k alleging arising out of based upon or attributable to directly or indirectly i the

actual alleged or threatened discharge dispersal release or escape of Pollutants or

ii any direction or request to test for monitor clean up remove contain treat

detoxify or neutralize Pollutants including but not limited to a Claim alleging damageto an Organization or its securities holders provided however that this exclusion

shall not apply to Non Indemnifiable Loss other than Non Indemnifiable Loss

constituting Cleanup Costs

Cleanup Costs means expenses including but not limited to legal and professional

fees incurred in testing for monitoring cleaning up removing containing treating

neutralizing detoxifying or assessing the effects of Pollutants

I for emotional distress of any person or for injury from libel slander defamation or

disparagement or for injury from a violation of a persons right of privacy provided

however this exclusion shall not apply to an Employment Practices Claim and

m for violations of any of the responsibilities obligations or duties imposed uponfiduciaries by the Employee Retirement Income Security Act of 1974 or amendments

thereto or any similar provisions of any state local or foreign statutory or commonlaw

For the purpose of determining the applicability of the foregoing Exclusions 4a through

4c and Exclusion 4f 1 the facts pertaining to and knowledge possessed by any

Insured shall not be imputed to any other Insured Person and 2 only facts pertaining to

and knowledge possessed by any past present or future chairman of the board president

chief executive officer chief operating officer chief financial officer or General Counsel or

equivalent position of an Organization shall be imputed to an Organization

This Clause 4 Exclusions shall not be applicable to Crisis Loss

5 LIMIT OF LIABILITY FOR ALL LOSSINCLUDING DEFENSE COSTS

The Limit of Liability stated in Item 3 of the Declarations is the aggregate limit of the

Insurers liability for all Loss under Coverages A B C and D combined arising out of all

Claims first made against each and every Insured and all Crisis Loss occurring during

the Policy Period and the Discovery Period if applicable The Limit of Liability for the

Discovery Period and the CrisisFund SMshall be part of and not in addition to the Limit

of Liability for the Policy Period Further a Claim which is made subsequent to the Policy

Period or Discovery Period if applicable which pursuant to Clause 7b or 7c is

considered made during the Policy Period or Discovery Period shall also be subject to the

one aggregate Limit of Liability stated in Item 3 of the Declarations The limit of the

Insurers liability for Crisis Loss and Delisting Crisis Loss arising from all Crises

occurring during the Policy Period in the aggregate shall be the amounts set forth as the

CrisisFundSM The CrisisFundsM shall be the aggregate limit of the Insurers liability for

all Crises under this policy regardless of the number of Crises occurring during the Policy

Period

Defense Costs are not payable by the Insurer in addition to the Limit of Liability Defense Costs are

part of Loss and as such are subject to the Limit of Liability for Loss

75011 200 BROXi ive COnv 8

HIGHLY CONFIDENTIAL


6 RETENTION CLAUSE

For each Claim the Insurer shall only be liable for the amount of Loss arising from a

Claim which is in excess of the applicable Retention amounts stated in Items 4a 4b and

4c of the Declarations such Retention amounts to be borne by an Organization andor

the Insured Person and remain uninsured with regard to all Loss other than

NonIndemnifiable Loss The Retention amount specified in

i Item 4a applies to Defense Costs that arise out of a Securities Claim

ii Item 4b applies to Loss that arises out of an Employment Practices Claim and

iii Item 4c applies to Loss that arises out of any Claim other than a Securities Claim

or an Employment Practices Claim

A single Retention amount shall apply to Loss arising from all Claims alleging the same

Wrongful Act or related Wrongful Acts

In the event a Claim triggers more than one of the Retention amounts stated in Items 4a4b and 4c of the Declarations then as to that Claim the highest of such Retention

amounts shall be deemed the Retention amount applicable to Loss to which a Retention

is applicable pursuant to the terms of this policy arising from such Claim

Further with respect to all Claims other than Employment Practices Claims no Retention

shall apply to Loss arising from such Claims and the Insurer shall reimburse Defense

Costs otherwise covered hereunder and paid by the Insured in the event of 1 a

determination of No Liability of each and every Insured against whom the same Claim or

related Claims have been made or 2 a dismissal or a stipulation to dismiss each and

every Insured against whom the same Claim or related Claims have been made without

prejudice and without the payment of any consideration by or on behalf of any Insured

However in the case of 2 above such reimbursement shall occur 90 days after the date

of dismissal or stipulation as long as such Claim is not brought or any other Claim

which is subject to the same single retention by virtue of Clause 6 is not pending or

brought again within that time and further subject to an undertaking by an Organization

in a form acceptable to the Insurer that such reimbursement shall be paid back by such

Organization to the Insurer in the event the Claim or any other Claim which is subject to

the same single retention by virtue of Clause 6 is brought after such 90day period

No Retention amount is applicable to Crisis Loss or Non Indemnifiable Loss

7 NOTICECLAIM REPORTING PROVISIONS

Notice hereunder shall be given in writing to the Insurer named in Item 8 of the

Declarations at the address indicated in Item 8 of the Declarations If mailed the date of

mailing shall constitute the date that such notice was given and proof of mailing shall be

sufficient proof of notice

a An Organization or an Insured shall as acondition precedent to the obligations of the

Insurer under this policy give written notice to the Insurer of a Claim made against

an Insured or a Crisis as soon as practicable i after the Named Entitys Risk

Manager or General Counsel or equivalent position first becomes aware of the Claim

or ii the Crisis commences but in all events no later than either

1 the end of the Policy Period or the Discovery Period if applicable or

2 within 30 days after the end of the Policy Period or the Discovery Period if

applicable as long as such Claim was first made against an Insured within the

final 30 days of the Policy Period or the Discovery Period if applicable

75011 200 BROK ive Cnnv 9

HIGHLY CONFIDENTIAL


b If written notice of a Claim has been given to the Insurer pursuant to Clause 7a

above then a Claim which is subsequently made against an Insured and reported to

the Insurer alleging arising out of based upon or attributable to the facts alleged in

the Claim for which such notice has been given or alleging any Wrongful Act which

is the same as or related to any Wrongful Act alleged in the Claim of which such

notice has been given shall be considered related to the first Claim and made at the

time such notice was given

c If during the Policy Period or during the Discovery Period if applicable an

Organization or an Insured shall become aware of any circumstances which mayreasonably be expected to give rise to a Claim being made against an Insured and

shall give written notice to the Insurer of the circumstances the Wrongful Act

allegations anticipated and the reasons for anticipating such a Claim with full

particulars as to dates persons and entities involved then a Claim which is

subsequently made against such Insured and reported to the Insurer alleging arising

out of based upon or attributable to such circumstances or alleging any Wrongful Act

which is the same as or related to any Wrongful Act alleged or contained in such

circumstances shall be considered made at the time such notice of such

circumstances was given

8 DEFENSE COSTS SETTLEMENTS JUDGMENTS INCLUDING THE ADVANCEMENT OF

DEFENSE COSTS

Under Coverages A B and C of this policy except as hereinafter stated the Insurer shall

advance excess of any applicable retention amount covered Defense Costs no later than

ninety 90 days after the receipt by the Insurer of such defense bills Such advance

payments by the Insurer shall be repaid to the Insurer by each and every Insured or

Organization severally according to their respective interests in the event and to the

extent that any such Insured or Organization shall not be entitled under this policy to

payment of such Loss

The Insurer does not however under this policy assume any duty to defend The Insureds shall

defend and contest any Claim made against them The Insureds shall not admit or assume any liability

enter into any settlement agreement stipulate to any judgment or incur any Defense Costs without the

prior written consent of the Insurer Only those settlements stipulated judgments and Defense Costs

which have been consented to by the Insurer shall be recoverable as Loss under the terms of this

policy The Insurers consent shall not be unreasonably withheld provided that the Insurer shall be

entitled to effectively associate in the defense the prosecution and the negotiation of any settlement of

any Claim that involves or appears reasonably likely to involve the Insurer

The Insurer shall have the right to effectively associate with each and every Organization

and Insured Person in the defense and prosecution of any Claim that involves or appears

reasonably likely to involve the Insurer including but not limited to negotiating a

settlement Each and every Organization and Insured Person shall give the Insurer full

cooperation and such information as it may reasonably require

Notwithstanding any of the foregoing if all Insured defendants are able to dispose of all

Claims which are subject to one retention amount inclusive of Defense Costs for an

amount not exceeding any applicable retention amount then the Insurers consent shall

not be required for such disposition

No Organization is covered in any respect under Coverage A or Coverage C An

Organization is covered subject to the policys terms conditions and limitations only with

respect to 1 its indemnification of its Insured Persons under Coverage Bii as respects

a Claim against such Insured Persons and 2 under Coverage Bi for a Securities Claim

Accordingly the Insurer has no obligation under this policy for covered Defense Costs

75011 200 BR iyi CnnV 10

HIGHLY CONFIDENTIAL


incurred by judgments against or settlements by an Organization arising out of a Claim

made against an Organization other than a covered Securities Claim or any obligation to

pay Loss arising out of any legal liability that an Organization has to a claimant except as

respects a covered Securities Claim against such Organization

With respect to i Defense Costs jointly incurred by ii any joint settlement entered into

by andor iii any judgment of joint and several liability against any Organization and any

Insured in connection with any Claim other than a Securities Claim any suchOrganizationand any such Insured and the Insurer agree to use their best efforts to determine a

fair and proper allocation of the amounts as between any such Organization any such

Insured and the Insurer taking into account the relative legal and financial exposures and

the relative benefits obtained by any such Insured and any such Organization In the

event that a determination as to the amount of Defense Costs to be advanced under the

policy cannot be agreed to then the Insurer shall advance Defense Costs excess of any

applicable retention amount which the Insurer states to be fair and proper until a different

amount shall be agreed upon or determined pursuant to the provisions of this policy and

applicable law

This Clause 8 shall not be applicable to Crisis Loss Nevertheless the Insurer does notunder this policy assume any duty to defend

9 PREAUTHORIZED SECURITIES DEFENSE ATTORNEYS

Affixed as Appendix A hereto and made a part of this policy is a list of Panel Counsel law

firms Panel Counsel Firms The list provides the Insureds with a choice of law firms

from which a selection of legal counsel shall be made to conduct the defense of anySecurities Claim made against such Insureds

The Insureds shall select a Panel Counsel Firm to defend the Securities Claim made

against the Insureds in the jurisdiction in which the Securities Claim is brought In the

event the Claim is brought in a jurisdiction not included on the list the Insureds shall

select a Panel Counsel Firm in the listed jurisdiction which is the nearest geographic

jurisdiction to either where the Securities Claim is brought or where the corporate

headquarters of the Named Entity is located In such instance the Insureds also may with

the express prior written consent of the Insurer which consent shall not be unreasonably

withheld select a nonPanel Counsel Firm in the jurisdiction in which the Securities

Claim is brought to function as local counsel on the Claim to assist the Panel Counsel

Firm which will function as lead counsel in conducting the defense of the Securities

Claim

With the express prior written consent of the Insurer an Insured may select a Panel

Counsel Firm different from that selected by another Insured defendant if such selection

is required due to an actual conflict of interest or is otherwise reasonably justifiable The

list of Panel Counsel Firms may be amended from time to time by the Insurer Howeverno firm shall be removed from the specific list attached to this policy during the Policy

Period without the consent of the Named Entity

10 DISCOVERY CLAUSE

Except as indicated below if the Named Entity shall cancel or the Named Entity or the

Insurer shall refuse to renew this policy the Named Entity shall have the right to a period

of either one two or three years following the effective date of such cancellation or

nonrenewal the Discovery Period upon payment of the respective Additional Premium

Amount described below in which to give to the Insurer written notice pursuant to

Clause 7a and 7c of the policy of i Claims first made against an Insured and ii

circumstances of which an Organization or an Insured shall be come aware in either

75011 200 BRQ ivi Cony 11

HIGHLY CONFIDENTIAL


case during said Discovery Period and solely with respect to a Wrongful Act occurring

prior to the end of the Policy Period and otherwise covered by this policy

The Additional Premium Amount for 1 one year shall be no more than 75 of the Full

Annual Premium 2 two years shall be no more than 150 of the Full Annual Premiumand 3 three years shall be no more than 225 of the Full Annual Premium As used

herein Full Annual Premium means the premium level in effect immediately prior to the

end of the Policy Period

Notwithstanding the first paragraph of Clause 5 if the Named Entity shall cancel or the

Insurer or the Named Entity shall refuse to renew this policy then the Named Entity

shall also have the right to requestan offer from the Insurer of a Discovery Period with

respect to Wrongful Acts occurring prior to the end of the Policy Period with an

aggregate limit of liability applicable to Claims made against the Insured during such

Discovery Period which is in addition to and not part of the applicable Limit of Liability

set forth in Item 3 of the Declarations The Insurer shall quote such a Discovery Period

pursuant to such terms conditions exclusions and additional premium as it deems

appropriate in its sole and absolute discretion

In the event of a Transaction as defined in Clause 12a the Named Entity shall have the

right to request an offer from the Insurer of a Discovery Period with respect to WrongfulActs occurring prior to the effective time of the Transaction The Insurer shall offer such

Discovery Period pursuant to such terms conditions exclusions and additional premiumas the Insurer may reasonably decide In the event of a Transaction the right to a

Discovery Period shall not otherwise exist except as indicated in this paragraph

The Discovery Period is not cancelable and the additional premium charged shall be fully

earned at inception This Clause 10 shall not apply to any cancellation resulting fromnonpaymentof premium The rights contained in this Clause 10 shall terminate unless written

notice of election of a Discovery Period together with any additional premium due is

received by the Insurer no later than thirty 30 subsequent to the effective date of the

cancellation nonrenewal or Transaction

11 CANCELLATION CLAUSE

This policy may be canceled by the Named Entity at any time only by mailing written

prior notice to the Insurer or by surrender of this policy to the Insurer or its authorized

agent This policy may only be canceled by or on behalf of the Insurer in the event of

non payment of premium by the Named Entity In the event of non payment of premium

by the Named Entity the Insurer may cancel this policy by delivering to the Named

Entity or by mailing to the Named Entity by registered certified or other first class mail

at the Named Entitys address as shown in Item 1a of the Declarations written notice

stating when not less than 15 days thereafter the cancellation shall be effective The

mailing of such notice as aforesaid shall be sufficient proof of notice The Policy Period

terminates at the date and hour specified in such notice or at the date and time of

surrender The Insurer shall have the right to the premium amount for the portion of the

Policy Period during which the policy was in effect

If this policy shall be canceled by the Named Entity the Insurer shall retain the

customary short rate proportion of the premium herein If the period of limitation relating

to the giving of notice as set forth in this Clause 11 is also set forth in any law controlling

the construction thereof then such period shall be deemed to be amended so as to be

equal to the minimum period of limitation set forth in the controlling law

75011 200 BRQive Coov 12

HIGHLY CONFIDENTIAL


12 ORGANIZATIONAL CHANGES

a If during the Policy Period

1 the Named Entity shall consolidate with merge into or sell all or substantially all

of its assets to any other person or entity or group of persons or entities acting in

concert or

2 any person or entity or group of persons or entities acting in concert shall acquire

Management Control of the Named Entity

any of such events being a Transaction then this policy shall continue in full force

and effect as to Wrongful Acts occurring prior to the effective time of the

Transaction but there shall be no coverage afforded by any provision of this policy

for any actual or alleged Wrongful Act occurring after the effective time of the

Transaction This policy may not be canceled after the effective time of the

Transaction and the entire premium for this policy shall be deemed earned as of such

time The Named Entity shall also have the right to an offer by the Insurer of a

Discovery Period described in the fourth paragraph of Clause 10 of this policy

b Subsidiary Additions Subsidiary also means any for profit entity that is not formed as

a partnership of which the Named Entity first had Management Control during the

Policy Period whether directly or indirectly through one or more other Subsidiaries

and

1 whose assets total less than 25 of the total consolidated assets of each and

every Organization as of the inception date of this policy or

2 whose assets total 25 or more than the total consolidated assets of each and

every Organization as of the inception date of this policy but such entity shall be

a Subsidiary only i for a period of sixty 60 days from the date the Named

Entity first had Management Control of such entity or ii until the end of the

Policy Period which ever ends or occurs first hereinafter AutoSubsidiary

Period

provided that the Named Entity or any other Insured shall report such Subsidiary to

the Insurer in writing prior to the end of the Policy Period

The Insurer shall extend coverage for any Subsidiary described in 12b2 above and

any Insured Person thereof beyond its respective Auto Subsidiary Period if during

such Auto Subsidiary Period the Named Entity shall have provided the Insurer with

full particulars of the new Subsidiary and agreed to any additional premium and

amendment of the provisions of this policy required by the Insurer relating to such

Subsidiary Further coverage as shall be afforded to any Subsidiary and any Insured

Person thereof is conditioned upon the Named Entity paying when due any additional

premium required by the Insurer relating to such Subsidiary

c Insured Persons and Outside Entity Executives Coverage will automatically apply to all

new Insured Persons of and Outside Entity Executives of an Organization following

the inception date of this policy

d Other Organizational Changes In all events coverage as is afforded under this policy with

respect to a Claim made against any Organization andor any Insured Person thereof

shall only apply for Wrongful Acts committed or allegedly committed after the

effective time such Organization became an Organization and such Insured Person

became an Insured Person and prior to the effective time that such Organization

ceases to be an Organization or such Insured Person ceases to be an Insured

Person An Organization ceases to be an Organization when the Named Entity no

longer maintains Management Control of an Organization either directly or indirectly

through one or more of its Subsidiaries

75011 2100 BROK2 ive Cony 13

HIGHLY CONFIDENTIAL


13 SUBROGATION

In the event of any payment under this policy the Insurer shall be subrogated to the

extent of such payment to all of each and every Organizations and Insureds rights of

recovery thereof and each such Organization and Insured shall execute all papers

required and shall do everything that may be necessary to secure such rights including the

execution of any and all documents necessary to enable the Insurer effectively to bring

suit in the name of each such Organization and each such Insured In no event howevershall the Insurer exercise its rights of subrogation against an Insured under this policy

unless such Insured has been convicted of a deliberate criminal act or been determined

to have in fact committed a deliberate fraudulent act or been determined to have in fact

obtained any profit or advantage to which such Insured was not legally entitled

14 OTHER INSURANCE AND INDEMNIFICATION

Such insurance as is provided by this policy shall apply only as excess over any other

valid and collectible insurance unless such other insurance is written only as specific

excess insurance over the Limit of LiabilityI provided by this policy This policy shall

specifically be excess of any other valid and collectible insurance pursuant to which anyother insurer has a duty to defend a Claim for which this policy may be obligated to pay

Loss

In the event of a Claim made against an Outside Entity Executive coverage as is afforded

by this policy whether under Coverage Bii or Coverage C shall be specifically excess of

1 any indemnification provided by an Outside Entity and 2 any insurance coverage

afforded to an Outside Entity or its Executives applicable to such Claim Further in the

event such other Outside Entity insurance is provided by the Insurer or any other

company of American International Group Inc AEG or would be provided but for the

application of the retention amount exhaustion of the limit of liability or failure to submit

a notice of a claim as required then the Insurers maximum aggregate Limit of Liability

for all Loss under this policy as respects any such Claim shall be reduced by the amount

of the limit of liability as set forth on the Declarations of the other AIG insurance

provided to such Outside Entity

15 NOTICE AND AUTHORITY

It

is agreed that the Named Entity shall act on behalf of its Subsidiaries and each and

every Insured with respect to the giving of notice of Claim the giving and receiving of

notice of cancellation the payment of premiums and the receiving of any return premiums

that may become due under th is policy the receipt and acceptance of any endorsements

issued to form a part of this policy and the exercising or declining of any right to a

Discovery Period

16 ASSIGNMENT

This policy and any and all rights hereunder are not assignable without the written

consent of the Insurer

17 ALTERNATIVE DISPUTE RESOLUTION PROCESS

It

is hereby understood and agreed that all disputes or differences which may arise under

or in connection with this policy whether arising before or after termination of this policy

including any determination of the amount of Loss shall be submitted to the alternative

dispute resolution ADR process set forth in this clause

Either the Insurer or an Insured may elect the type of ADR process discussed below

provided however that such Insured shall have the right to reject the Insurers choice of

the type of ADR process at any time prior to its commencement in which case such

Insureds choice of ADR process shall control

75011 200 SRO jVP CODV 14

HIGHLY CONFIDENTIAL


The Insurer and each and every Insured agrees that there shall be two choices of ADR

process 1 non binding mediation administered by the American Arbitration Associationin which the Insurer and any such Insured shall try in good faith to settle the dispute by

mediation under or in accordance with its then prevailing Commercial Mediation Rules or

2 arbitration submitted to the American Arbitration Association in accordance with its

then prevailing Commercial Arbitration Rules in which the arbitration panel shall consist of

three disinterested individuals In either mediation or arbitration the mediator or arbitrators

shall have knowledge of the legal corporate management or insurance issues relevant to

the matters in dispute The mediator or arbitrators shall also give due consideration to the

general principles of the law of the state where the Named Entity is incorporated in the

construction or interpretation of the provisions of this policy In the event of arbitration

the decision of the arbitrators shall be final and binding and provided to both parties and

the arbitrators award shall not include attorneys fees or other costs In the event of

mediation either party shall have the right to commence a judicial proceeding provided

however that no such judicial proceeding shall be commenced until the mediation shall

have been terminated and at least 120 days shall have elapsed from the date of the

termination of the mediation In all events each party shall share equally the expenses of

the ADR process

Either choice of ADR process may be commenced in New York New York Atlanta

Georgia Chicago Illinois Denver Colorado or in the state indicated in Item 1a of the

Declarations as the mailing address for the Named Entity The Named Entity shall act on

behalf of each and every Insured in deciding to proceed with an ADR process under this

clause

18 ACTION AGAINST INSURER

Except as provided in Clause 17 of the policy no action shall lie against the Insurer

unless as a condition precedent thereto there shall have been full compliance with all of

the terms of this policy or until the amount of the Insureds obligation to pay shall have

been finally determined either by judgment against such Insured after actual trial or by

written agreement of the Insured the claimant and the Insurer

Any person or organization or the legal representative thereof who has secured such

judgment or written agreement shall thereafter be entitled to recover under this policy to

the extent of the insurance afforded by this policy No person or organization shall have

any right under this policy to join the Insurer as a party to any action against any Insured

or Organization to determine the Insureds liability nor shall the Insurer be impleaded

by any Insured Person their spouse any Organization or any legal representative of the

foregoing

19 BANKRUPTCY

Bankruptcy or insolvency of any Organization or any Insured Person shall not relieve the

Insurer of any of its obligations hereunder

It

is further understood and agreed that the coverage provided under this policy is

intended to protect and benefit the Insured Persons Further if a liquidation or

reorganization proceeding is commenced by the Named Entity andor any other

Organization whether voluntarily or involuntarily under Title 11 of the United States Code

as amended or any similar state local or foreign law collectively Bankruptcy Lawthen in regard to a covered Claim under this policy the Insureds hereby

a waive and release any automatic stay or injunction to the extent it may apply in such

proceeding to the proceeds of this policy under such Bankruptcy Law and

b agree not to oppose or object to any efforts by the Insurer or any Insured to obtain

relief from any stay or injunction applicable to the proceeds of this policy as a result

of the commencement of such liquidation or reorganization proceeding

1 75011 200 BROffirAive Cony 15

HIGHLY CONFIDENTIAL


N

20 SPOUSAL AND LEGAL REPRESENTATIVE EXTENSIONIf a Claim against an Insured Person includes a Claim against i the lawful spouse of

such Insured Person or ii a property interest of such spouse and such Claim arises

from any actual or alleged Wrongful Act of such Insured Person this policy shall cover

Loss arising from the Claim made against that spouse or the property of that spouse to

the extent that such Loss does not arise from a Claim for any actual or alleged act error

or omission of such spouse This policy shall cover Loss arising from a Claim made

against the estates heirs or legal representatives of any deceased Insured Person and

the legal representatives of any Insured Person in the event of incompetency insolvency

or bankruptcy who was an Insured Person at the time the Wrongful Acts upon which

such Claim is based were committed

21 RENEWAL APPLICATION PROCEDURE

If this policy is a renewal of a replacement of or succeeds in time any policy providing

similar coverage issued by the Insurer or any of its affiliates then in granting coverage

under this policy it is agreed that the Insurer has relied upon the Application as being

accurate and complete in underwriting this policy This Clause 21 together with the

Application constitute the complete Application that is the basis of this policy and form a

part hereof and is material to the risk assumed by the Insurer No written renewal

application form need be completed by the Named Entity in order to receive a renewal

quote from the Insurer although the Insurer reserves the right to require specific

information upon renewal

22 ORDER OF PAYMENTS

In the event of Loss arising from a covered Claim for which payment is due under the

provisions of this policy then the Insurer shall in all events

a first pay Loss for which coverage is provided under Coverage A and Coverage C of

this policy then

b only after payment of Loss has been made pursuant to Clause 22a above with

respect to whatever remaining amount of the Limit of Liability is available after such

payment at the written request of the chief executive officer of the Named Entity

either pay or withhold payment of such other Loss for which coverage is provided

under Coverage Bii of this policy and then

c only after payment of Loss has been made pursuant to Clause 22a and Clause 22babove with respect to whatever remaining amount of the Limit of Liability is available

after such payment at the written request of the chief executive officer of the Named

Entity either pay or withhold payment of such other Loss for which coverage is

provided under Coverages Bi and D of this policy

In the event the Insurer withholds payment pursuant to Clause 22b andor Clause 22cabove then the Insurer shall at such time and in such manner as shall be set forth in

written instructions of the chief executive officer of the Named Entity remit such paymentto an Organization or directly to or on behalf of an Insured Person

The bankruptcy or insolvency of any Organization or any Insured Person shall not relieve

the Insurer of any of its obligations to prioritize payment of covered Loss under this

policy pursuant to this Clause 22

23 HEADINGS

The descriptions in the headings of this policy are solely for convenience and form no

part of the terms and conditions of coverage

75011 200 BR01K ive Cony 16

HIGHLY CONFIDENTIAL


APPENDIX ASECURITIES CLAIMS PANEL COUNSEL LIST

ALASKA

Davis Wright Tremaine

David W Oesting

701 W Eighth Avenue Suite 800 Anchorage AK 99501 3468 907257 5300

Class Action Approved

Foster Pepper Shefelman

Tim J Filer

1007 W Third Ave Ste 100 Anchorage AK 99501 907222 7100


CALIFORNIA

Bingham McCutchen LLP

David M Balabanian Dale E Barnes

3 Embarcadero Center San Francisco CA 94111 4153932626


Mary T Huser

1900 University Avenue East Palo Alto CA 94303 1212 650849 4914


Susan L Hoffman

355 South Grand Avenue Los Angeles CA 90071 1560 213680 6416


Cooley Godward Kronish LLP

Paul A Renne 4156932073John C Dwyer 6508435228

One Maritime Plaza 20th Floor San Francisco CA 94111 3580 415693 2000


William E Grauer 8585506050 Philip C Tencer 8585506068 Koji F Fukumura 18585506008

4401 Eastgate Mall San Diego CA 92121 1909 858550 6000


Stephen C Neal 6508435182 William S Freeman 65018435037 John C Dwyer 6508435228

3175 Hanover Street Palo Alto CA 94304 1130 650843 5000


Davis Wright TremaineMartin Fineman

One Embarcadero Center Suite 600 San Francisco CA 94111 3834 415276 6500


DLA Piper Rudnick Gray Cary US LLP

Shirli Fabbri Weiss David Priebe

2000 University Avenue East Palo Alto CA 94303 650833 2000


Shirli Fabbri Weiss Robert Brownlie

4365 Executive Drive Suite 1100 San Diego CA 92121 858677 1400


Revised 707 Page 1

Please visit our website at wwwbriefbasecom to view additional firms that may have been

added to the panel counsel list since this policy was issued

BROKERArchive Copy

HIGHLY CONFIDENTIAL



Fenwick West LLP

Susan S Muck

Embarcadero Center West 275 Battery Street San Francisco CA 94111 415875 2300


Gibson Dunn Crutcher LLP

Dean J Kitchens 2132297413

333 S Grand Avenue Los Angeles CA 90071 3197 213229 7413


Wayne W Smith Meryl L Young

Jamboree Center 4 Park Plaza Suite 1400 Irvine CA 92614 8557 949451 3800


Heller Ehrman White McAuliffe

Douglas M Schwab M Laurence PopofskyMichael J Shepard

333 Bush Street San Francisco CA 94104 2878 415772 6000


Darryl L Snider JerryL Marks

601 South Figueroa Street 40th Floor Los Angeles CA 90017 5758 2136890200Class Action Approved

Norman J Blears

275 Middlefield Road Menlo


Park CA 94025 3506 650324 7000

David E Kleinfeld

4350 La Jolla Village Drive 7th Floor San


Irell Manella LLP

David Siegel Daniel P Lefler

1800 Avenue of the Stars Suite


Katten Muchin Rosenman LLP

Bruce Vanyo 13107884401

2029 Century Park East Suite

Diego CA 92122 1 246 858450 8400

900 Los Angeles CA 90067 4276 310277 1010

2600 Los Angeles CA 90067 3012 310788 4400

Latham WatkinsPaul H Dawes 6504632626John C Tang 6503284600

135 Commonwealth Drive Menlo Park CA 94025 1105 650328 4600


Miles N Ruthberg 2138918754Pamela S Palmer 2138918435Mark W Rappel 2138918156Peter W Devereaux 2138918622Charles W Cox 2138918178Jamie L Wine 2134851234

633 West Fifth Street Suite 4000 Los Angeles CA 90071 213485 1234


Revised 707 Page 2



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Michael J Weaver 6192383012 Peter H Benzian 6192361234 Julia E Parry 6192361234

600 West Broadway Suite 1800 San Diego CA 92101 3375 619236 1234


Paul H Dawes 6504632626Peter A Wald 41539580106Darius C 0gloza 4153910600JamesK Lynch 4153958265 Michele F Kyrouz

505 Montgomery Street Suite 1900 San Francisco CA 94111 2562 415391 0600


Miles N Rulberg 2138918754Peter W Devereaux 2138918622Pamela S Palmer

2138918435Jon D Anderson 7147558217Virginia S Grogan 714 7558206

650 Town Center Drive 20th Floor Costa Mesa CA 92626 714540 1235


Morrison Foerster LLP

Melvin R Goldman 4152687311 Paul T Friedman 415268 7444 Jordan D Eth 4152687176Darryl P Rains 6508135866

425 Market Street San Francisco CA 94105 415268 7000


Robert S Stern 2138925484 Mark R McDonald 2138925810

555 West 5th Street Suite 3500 Los Angeles CA 90013 213892 5200


Munger Tolles Olson

John W Spiegel 213 6839152 George M Garvey 213 6839153

355 South Grand Avenue 35th Floor Los Angeles CA 90071 1560 213683 9100


OMelveny Myers LLP

Seth Aronson 2134307486AmyJ Longo 2134308351

400 South Hope St 15th Floor Los Angeles CA 90071 2899 213430 6000


Michael G Yoder 9498237936Phillip R Kaplan

610 Newport Center 17th Floor Newport Beach CA 92660 9497609600Class Action Approved

Daniel H Bookin 4159848786Michael F Tubach

275 Battery Street San Francisco CA 94111 415984 8700


Orrick Herrington Sutcliffe LLP

W Reece Bader

1000 Marsh Road Menlo Park CA 94025 650614 7400


William F Alderman Michael D Torpey 4157735932James E Burns Jr 4157735935

Old Federal Reserve Bank Building 400 Sansome Street San Francisco CA 94111

415392 1122


Revised 707 Page 3



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Paul Hastings Janofsky Walker LLP

Howard M Privette William F Sullivan John A Reding Peter M Stone Christopher H McGrath

515 South Flower Street Twenty Fifth Floor Los Angeles CA 90071 213683 6000


Shearman Sterling

Jeffrey S Facter 4156161205 Stephen D Hibbard 4156161174555 California Street San Francisco CA 94104 415616 1100


Simpson Thacher Bartlett

Chat Kronenberg Seth A Ribner

1999 Avenue of the Stars 29th Floor Los Angeles CA 90067 310407 7500


George M Newcombe James G Kreissman

3373 Hillview Avenue Palo Alto CA 94304 650251 5000


Skadden Arps Slate Meagher Flom LLP and Affiliates

James E Lyons 4159846470

Four Embarcadero Center San Francisco CA 94111 4159846400


Sullivan Cromwell

Robert A Sacks

1888 Century Park East Los Angeles CA 90067 1725 310712 6600


Wilson Sonsini Goodrich Rosati

Boris Feldman Steven M Schatz Jerome Birn 6503204858Nicki Locker 6503204888DouglasClark 650 3204824 Keith Eggleton 6503204893

650 Page Mill Road Palo Alto CA 94304 1050 650493 9300


COLORADO

Cooley Godward Kronish LLPJames E Nesland

380 Interlocken Crescent Suite 900 Broomfield CO 800218023 7205664000



George Curtis

1801 California Street Suite 4100 Denver CO 80202 303298 5700


Hogan Hartson

Daniel F Shea

One Tabor Center 1200 Seventeenth St Suite 1500 Denver CO 80202 303899 7300


Revised 707 Page 4



BROKERArchive Copy

HIGHLY CONFIDENTIAL



DELAWARE

Blank Rome LLP

Thomas P Preston Neal C BelgamChase Manhattan Centre 1201 Market Street Suite 800 Wilmington DE 19801 302425 6473


Wolf Block Schorr and Solis Cohen LLP

Barry Klayman

Wilmington Trust Center 1100 N Market Street Suite 1001 Wilmington DE 19801

302777 5860


DISTRICT OF COLUMBIA

Arnold Porter

Scott B Schreiber 2029425672

555 Twelfth Street NW Washington DC 20004 1206 202942 5000


Cahill Gordon Reindel

Donald J Mulvihill

1990 K Street NW Suite 950 Washington DC 20006 202862 8900



David Clarke Jr 2028616300Robert J Machias 4105804209James D Mathias Mark Muedeking

2028613900Deborah R Meshulam 2028616470

1200 Nineteenth Street NW Washington DC 20036 2412 202861 3900


Fulbright Jaworski LLP

Stephen M McNabb

Market Square 801 Pennsylvania Ave NW Washington DC 20004 2623 202662 0200



F Joseph Warin John C Millian

1050 Connecticut Ave NW Washington DC 20036 5306 202955 8500


Greenberg Traurig LLP

Joe R Reeder Alan Foster

800 Connecticut Avenue NW Suite 500 Washington DC 20006 202331 3100


Hogan Hartson

Ty Cobb

555 Thirteenth Street NW Washington DC 20004 202637 5600


Revised 707 Page 5



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Latham Watkins

Laurie B Smilan 7034565220 Michele E Rose 7034565225 William R Baker Nl 202 6371001

Everett C Kip Johnson Jr 2026372260 Christian Word 7034565226

555 Eleventh Street NW Suite 1000 Washington DC 20004 1304 202637 2200


LeBoeuf Lamb Greene MacRae LLP

Ralph C Ferrara 2029868020Lyle Roberts 2029868029

1875 Connecticut Avenue NW Suite 1200 Washington DC 20009 5715 202986 8000


OMelveny Myers LLP

Jeffrey Kilduff 2023835383

1625 Eye Street NW Washington DC 20006 202383 5300


Shearman Sterling

Jonathan L Greenblatt 2025088070Thomas S Martin 2025088040

801 Pennsylvania Ave NW Washington DC 20004 2604 1202508 8000


Sidley Austin Brown Wood LLP

Thomas C Green 202 7368069 Mark D Hopson 202 7368188 Michael D Warden 202736x8080

1501 K Street NW Washington DC 20005 202736 8000


Sullivan Cromwell

Daryl A LibowMargaret K Pfeiffer

1701 Pennsylvania Avenue NW Washington DC 20006 5805 202956 7500


Williams Connolly LLP

John K Villa

725 Twelfth Street NW Washington DC 20005 202434 5000


Willkie Farr Gallagher

Kevin B Clark 2023031105

1875 K Street NW Washington DC 20006 1238 202303 1000


WilmerHale

2445 M Street NW Washington DC 20037 202663 6000


FLORIDA

Akerman Senterfitt Eidson PABrian P Miller 3059825626

SunTrust International Center 28th Floor Miami FL 33131 305374 5600


Revised 707 Page 6



BROKERArchive Copy

HIGHLY CONFIDENTIAL



J Thomas Cardwell

Citrus Center 17th Floor 255 South Orange Ave Orlando FL 32801 407843 7860


Carlton Fields

Steven J Brodie 3051539 7302 Nancy H Henry

4000 International Place 100 SE 2nd Street Suite 4000 Miami FL 33131 305530 0050


Gary L Sasso

One Progress Plaza 200 Central Avenue Suite 2300 St Petersburg FL 33701 4352

727821 7000


Steven J Brodie 3055397302

4221 West Boy Scout Boulevard 10th Floor Tampa FL 33607 813223 7000



Bradford D Kaufman

777 South Flagler Drive Suite 300 East West Palm Beach FL 33401 561650 7900


Hilarie Bass Esq

1221 Brickell Avenue Miami FL 33131 3055790500Class Action Approved

Holland Knight LLP

Tracy A Nichols George E Schulz Jr

50 North Laura Street Suite 3900 Jacksonville FL 32202 904353 2000


Tracy A Nichols Mitchell Eliot Herr Gregory A Baldwin Louise Bra is

701 Brickell Avenue Suite 3000 Miami FL 33131 305374 8500


Tracy A Nichols Michael L Chapman

100 North Tampa Street Suite 4100 Tampa FL 33602 8132278500Class Action Approved

Robert R Feagin 111 Elizabeth L Bevington

315 South Calhoun Street Suite 600 Tallahassee FL 32301 850224 7000


Tracy A Nichols Scott Newman

625 North Flagler Drive Suite 700 West Palm Beach FL 33401 561833 2000


William Wilson

200 South Orange Avenue Suite 2600 Orlando FL 32801 407425 8500


Revised 707 Page 7



BROKERArchive Copy

HIGHLY CONFIDENTIAL



McGuireWoods LLP

David M Wells Stephen D Busch 80417754378

Bank of America Tower 50 North Laura Street Jacksonville FL 32202 904798 3200


Squire Sanders Dempsey LLP

Lewis F Murphy 3055772957 Wendy Leavitt 305J5772894

200 South Biscayne Boulevard Suite 4000 Miami FL 33131 2398 305577 7000


White Case LLP

Charles C Kline Esq

Wachovia Financial Center 200 S Biscayne Blvd Suite 4900 Miami FL 33131 2352

305371 2700


GEORGIA

Alston Bird LLP

Peter 0 Bassett 40488173431 Todd R David 4048877357

One Atlantic Center 1201 West Peachtree Street Atlanta GA 30309 3424 404881 7000


King Spalding

M Robert Thornton Michael R Smith

1 180 Peachtree Street Atlanta GA 30309 404572 4600



J Allen Maines

600 Peachtree Street NE Twenty Fourth Floor Atlanta GA 30308 2222 404815 2400


Smith Gambrell Russell LLP

John G Despriet

Promenade

It

Suite 3100 1230 Peachtree Rd NE Atlanta GA 30309 3592 404815 3730


Womble Carlyle Sandridge Rice

Robert R Ambler Jr 4048792424Nisbet S Kendrick 4048887488

One Atlantic Center 1201 West Peachtree Suite 3500 Atlanta GA 30309 404872 7000


ILLINOIS


Samuel B Isaacson Michael S Poulos

203 North LaSalle Street Suite 1900 Chicago IL 60601 1293 312368 4000


Revised 707 Page 8



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Katten Muchin Rosenman LLP

David H KistenbrokerPamela G Smith Leah J Domitrovic Steven L BashwinerMary Ellen

HennessyBonita L Stone

525 W Monroe Street Suite 1600 Chicago IL 60661 3693 312902 5200


Kirkland Ellis

Robert J Kopecky

200 East Randolph Drive Chicago IL 60601 312861 2000


Sidley Austin Brown Wood LLPHillie R Sheppard Eugene A Schoon Walter C Carlson

1 South Dearborn Street Chicago IL 60603 312853 7734


Sonnenschein Nath Rosenthal

Christopher 0 King

8000 Sears Tower Chicago IL 60606 312876 8224


MARYLAN D


Mark Muedeking 4105803000

6225 Smith Avenue Baltimore MD 21209 410580 3000


MASSACHUSETTS

Bingham McCutchen LLP

Jordan D Hershman

150 Federal Street Boston MA 021 10 1726 617951 8000


Edwards Angell Palmer Dodge LLP

John D Hughes

101 Federal Street Boston MA 02110 1800 617951 3373


Foley Hoag LLP

Nicholas C Theodorou 6178321163 Lisa C Wood 6178321117

Seaport World Trade Center West 155 Seaport Boulevard Boston MA 02210 2600

617832 1000


Goodwin Procter LLP

Stephen D Poss Brian E Pastuszenski R Todd Cronan James S Dittmar Carl E Metzger

Exchange Place 53 State Street Boston MA 02109 2881 617570 1000


Revised 707 Page 9



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Mintz Levin Cohn Ferris Glovsky and Popeo PC

Peter M Saparoff Patrick J Sharkey

One Financial Center Boston MA 02111 617542 6000


Ropes GrayJohn D Donovan Jr

One International Place Boston MA 02110 2624 617951 7566



Thomas J Dougherty

One Beacon Street Boston MA 02108 617573 4820


WilmerHale

Jeffrey B Rudman William H Paine Andrea J Robinson

60 State Street Boston MA 02109 617526 6000


MINNESOTA

Dorsey Whitney LLP

Brian E Palmer Edward J Pluimer J Jackson l Peter W Carter Roger J Magnuson

50 South Sixth Street Suite 1500 Minneapolis MN 55402 1498 612340 2600


Faegre Benson LLP

Robert L Schnell Thomas L Kimer

90 South Seventh Street Minneapolis MN 55402 3901 612336 3000


Winthrop Weinstine PADavid P Pearson 6126046692 Thomas H Boyd

Suite 3500 225 South 6th Street Minneapolis MN 55402 4629 612604 6400


NEW YORK

Arnold Porter

Kent A Yalovwitz Scott B Schreiber 2029425672

399 Park Avenue New York NY 10022 4690 212715 1000


Blank Rome LLP

Robert J Mittman 2128855555

The Chrysler Building 405 Lexington Avenue New York NY 10174 212885 5555


Revised 707 Page 10



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Cadwalader Wickersham Taft

Gregory A Markel Howard R Hawkins Jr Jonathan M Hoff

One World Financial Center New York NY 10281 212504 6000


Cahill Gordon Reindel

Charles A Gilman 2127013403David G Januszewski 2127013352Thomas J Kavaler

2127013406Jonathan D Thier 2127013992

Eighty Pine Street New York NY 10005 212701 3000


Clifford Chance US LLP

James B Weidner John K Carroll Mark Holland

31 West 52nd Street New York NY 10019 6131 212878 8000


Cravath Swaine MooreEvan R Chester Francis P Barron Julie A North Keith R Hummel Paul C Saunders l Peter T

Barbur Richard W Clary Robert H Baron Ronald S Rolfe Rory 0 Millson Thomas G Rafferty

Worldwide Plaza 825 Eighth Avenue New York NY 10019 7475 212474 1000



Joseph G Finnerty 111 Keara M Gordon David E Nachman John J Clarke

1251 Avenue of the Americas New York NY 10020 1104 212835 6000


Fried Frank Harris Shriver Jacobson

William G McGuinness Alexander R Sussman Debra M Torres Douglas H Flaum l Gregg L

Weiner John A Borek

One New York Plaza New York NY 10004 1980 212859 8000


Fulbright Jaworski LLP

Robert D Owen Daniel R Murdock 2123183385Philip M Smith 2123783329

666 Fifth Avenue New York NY 10103 3198 212318 3000



Wesley G Howell Robert F Serio Mitchell A Karlan 2123573827

200 Park Avenue New York NY 10166 0193 212351 4000



Brian S Cousin 21280192001 Geoffrey Berman l Karen Bitar William Briendel Michael Burrows

Adam Cole Roger Kaplan Robert A Horowitz Ronald Lefton Jeffrey Mann Alan Mansfield Stephen

Saxl Jeffrey Sklaroff Toby Soli Kenneth A Lapatine

200 Park Avenue New York NY 10022 212801 9200


Revised 707 Page 11



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Katten Mu chin Rosenman LLP

David H KistenbrokerRobert W Gottlieb Joel W Sternman

575 Madison Avenue New York NY 10022 2585 212940 8800


Kaye Scholer LLP

Fredric W Yerman 21218368663Phillip A Geraci 2128368659

425 Park Avenue New York NY 10022 212836 8663


Kramer Levin Naftalis Frankel LLP

GaryP Naftalis Alan R Friedman Robert N Holtzman Jonathan M Wagner

1177 Avenue of the Americas New York NY 10036 212715 9100


Mayer Brown Rowe MawRichard A SpehrSteven Wolowitz Joseph DeSimone

1675 Broadway New York NY 10019 212506 2500


Milbank Tweed Hadley McCloyMichael L Hirschfeld Scott A Edelman

1 Chase Manhattan Plaza New York NY 10005 212530 5149


Morrison Foerster LLP

Anthony M Radice 212468020 Jack C Auspitz 2124688046

1290 Avenue of the Americas New York NY 10104 2124688000Class Action Approved


BarrySherJames D Wareham

Park Avenue Tower 75 E 55th Street New York NY 10022 212318 6000


Paul Weiss Rifkind Wharton Garrison

Daniel J BellerMartin Flumenbaum Claudia Hammerman Brad S Karp Daniel J KramerMark FPomerantz Richard A Rosen

1285 Avenue of the Americas New York NY 10019 6064 212373 3000


Proskauer Rose LLP

Gregg M Mashberg

1585 Broadway New York NY 10036 8299 212969 3000


Schulte Roth Zabel LLP

Betty Santangelo Howard 0 Godnick Irwin J Sugarman Robert M Abrahams

919 Third Avenue New York NY 10022 212756 2000


Revised 707 Page 12



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Shearman Sterling

Jeremy G Epstein 2128484163Steven F Moto 2128487456Brian H Polovoy 2128484703StuartJ Baskin 2128484974

599 Lexington Avenue New York NY 10022 2128488000Class Action Approved

Sidley Austin Brown Wood LLP

Theodore N Miller 2138966646 l Barry W Rashkover I Steven M Bierman l Robert Pietrzak

787 Seventh Avenue New York NY 10019 212839 5300


Simpson Thacher Bartlett

Bruce D Angiolillo Michael J Chepiga Paul C Cumin Roy L Reardon

425 Lexington Avenue New York NY 10017 212455 2000



Jonathan J Lerner

Four Times Square New York NY 10036 212735 2550


Stroock Stroock Lavan LLP

Laurence Greenwald Melvin A Brosterman Robert Lewin

180 Maiden Lane New York NY 10038 212806 5400


Sullivan Cromwell

D Stuart Meiklejohn Gandolfo V DiBlasi John L Hardiman John L Warden Philip L Graham Jr

Richard H Klapper

125 Broad Street New York NY 10004 2498 212558 4000


Wachtell Lipton Rosen Katz

Paul Vzcarrondo 21214031208 Ted Mirvis

51 W 52nd Street 29th Floor New York NY 10019 212403 1000


Weil Gotshal Manges LLP

Greg A DanilowIrwin H Warren Joseph Allerhand Jonathan D Polkes 2123108881

767 Fifth Avenue New York NY 10153 212310 8000


Willkie Farr Gallagher

Michael R Young Richard L Posen Stephen W Greiner

787 Seventh Avenue New York NY 10019 6099 2127288000Class Action Approved

WilmerHale

Peter ngeland Robert B McCaw

520 Madison Ave New York NY 10022 212230 8800


Revised 707 Page 13



BROKERArchive Copy

HIGHLY CONFIDENTIAL



OHIO

Jones Day Reavis PogueJohn M Newman Jr John W Edwards I

f

North Point 901 Lakeside Avenue Cleveland OH 44114 216586 3939


OREGON


John F McGrory2300 First Interstate Tower 1300 SW Fifth Avenue Portland OR 97201 503241 2300



Tim J Filer Roger D Mellern

101 SW Main Street 15th Floor Portland OR 97204 3223 5032210607Class Action Approved

Lane Powell Spears Lubersky LLP

Milo Petranovich Robert E Maloney

601 SW Second Avenue Suite 2100 Portland OR 97204 503778 2100


Stoel Rives LLP

Lois O Rosenbaum

900 SW 5th Avenue Suite 2600 Portland OR 97204 503224 3380


PENNSYLVANIA

Blank Rome LLP

Ian M ComiskyAlan J Hoffman

One Logan Square Philadelphia PA 19103 215569 5500


Buchanan Ingersoll Rooney PC

John R Leathers

One Oxford Centre 20th Floor 301 Grant Street Pittsburgh PA 15219 8800 412562 8800


Dechert LLP

Jeffrey G Well 21599425381 Seymour Kurland 2159942235

4000 Bell Atlantic Tower 1717 Arch Street Philadelphia PA 19103 2793 215994 4000


Pepper Hamilton LLP

Barbara W Mather Jon A BaughmanLaurence Z Shiekman 2159814347 M Duncan Grant

Robert L Hickok 2159814583Thomas E Zemaibs

3000 Two Logan Square Eighteenth and Arch Streets Philadelphia PA 19103 2799

215981 4000


Revised 707 Page 14



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Wolf Block Schorr and Solis Cohen LLP

Jerome J Shestack M Norman Goldberger Mark L Alderman

1650 Arch Street 22nd Floor Philadelphia PA 19103 2097 215977 2058


TEXAS

Akin Gump Strauss Hauer Feld LLP

Paul R Bessette 5124996250Edward S Koppman Orrin L Harrison 111

1700 Pacific Avenue Suite 4100 Dallas TX 75201 214969 2800


Paul R Bessette 5124996250

1111 Louisiana Street 44th Floor Houston TX 77002 5200 713220 5800

Beirne Maynard Parsons LLP

Jeffrey R Parsons 7139607302

1300 Post Oak Boulevard Suite 2500 Houston TX 77056 3000 713623 0887


Carrington Coleman Sloman Blumenthal LLP

Fletcher L Yarbrough Bruce W Collins Tim Gavin

901 Main Street Suite 5500 Dallas TX 75202 214855 3000


Fuibright Jaworski LLP

Frank G Jones Robert S Harrell Gerard G Pecht

1301 McKinney Suite 5100 Houston TX 77010 713651 5151


Karl G Dial l Michael A Svirartzendruber

2200 Ross Avenue Suite 2800 Dallas TX 75201 214855 8000


King Spalding

Mark K Glasser

1100 Louisiana Suite 4000 Houston TX 77002 713751 3212


Locke Liddell Sapp LLP

Bradley W Foster 21474086641 C W Flynn 214 7408654 John H McElhaney 214 7408458

2200 Ross Avenue Suite 2200 Dallas TX 75201 6776 214740 8000


Charles R Parker 7132261469

3400 JPMorgan Chase Tower 600 Travis Houston TX 77002 713226 1200


Bradley W Foster 2147408664CW Flynn 2147408654John H McElhaney 2147408458

100 Congress Avenue Suite 300 Austin TX 78701 4042 512305 4700


Revised 707 Page 15



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Thompson Knight LLP

Timothy R McCormick

1700 Pacific Avenue Suite 3300 Dallas TX 75201 214969 1103


Timothy R McCormick

98 San Jacinto Boulevard Suite 1200 Austin TX 78701 512469 6100


Timothy R McCormick

333 Clay Street Suite 3300 Houston TX 77002 713654 8111


Timothy R McCormick

Burnett Plaza Suite 1600 801 Cherry Street Unit 1 Fort Worth TX 76102 6881

817347 1700


Vinson Elkins LLP

Walter B Stuart N Scott Fletcher

First City Tower 1001 Fannin St Suite 2300 Houston TX 77002 6760 713758 2222


Well Gotshal Manges LLP

Ralph I Miller

100 Crescent Court Dallas TX 75201 214746 7700


Ralph I Miller

700 Louisiana Suite 1600 Houston TX 77002 713546 5000


VIRGINIA

Cooley Godward Kronish LLP

Robert R Vieth Partner Michael Kllsch

One Freedom Square Reston Town Ctr 11951 Freedom Dr Reston VA 20190 5656

703456 8000



John Scalia 703 749 1300

1750 Tysons Boulevard 12th Fl Tysons Corner VA 22102 703749 1300


Latham Watkins

Laurie B Smilan 70345x5220 Michele E Rose 7034565225 Christian Word 7034565226

Two Freedom Square 11955 Freedom Drive Suite 500 Reston VA 20190 5651 703456 1000


McGuireWoods LLP

Stephen D Busch 8047754378

One James Center 901 East Cary Street Richmond VA 23219 804775 1000


Revised 707 Page 16



BROKERArchive Copy

HIGHLY CONFIDENTIAL



Stephen D Busch 8047754378Charles McIntyre

1750 Tysons Boulevard Suite 1800 McLean VA 22102 703712 5000


WilmerHale

Charles E Davidow 2026636241

1600 Tysons Boulevard 10th Floor Tysons Corner VA 22102 703251 9700



Lyle Roberts Trevor Chaplick 7037343100

2 Fountain Square Reston Town Ct 11921 Freedom Drive Suite 600 Reston VA 20190 5634

703734 3100


WASHINGTON


Stephen M Rummage Ladd B Leavens

2600 Century Square 1501 Fourth Avenue Seattle WA 98101 1688 2066223150



Stellman Keehnel

701 Fifth Avenue Suite 7000 Seattle WA 98104 206839 4800



Tim J Filer Roger D Mellem

1111 Third Avenue Suite 3400 Seattle WA 98101 3299 206447 8998


Heller Ehrman White McAuliffe

George E Greer

701 Fifth Avenue Suite 6100 Seattle WA 98104 7098 206447 0900


Lane Powell Spears Lubersky LLP

James B Stoetzer 2062779511 Rudy A Englund LarryS Gangnes Christopher B Wells

1420 Fifth Avenue Suite 4100 Seattle WA 98101 2338 206223 7000


Perkins Coie LLP

Harry H Schneider Jr Ronald L Berenstain

1201 Third Avenue Ste 4800 Seattle WA 98101 3099 206583 8888



Barry M Kaplan

701 Fifth Avenue Suite 5100 Seattle WA 98104 206883 2500


Revised 707 Page 17



BROKERArchive Copy

HIGHLY CONFIDENTIAL


APPENDIX B

1 DEFINITIONS

a Crisismeans

1 a Delisting Crisis or

2 one of the following events which in the good faith opinion of the Chief

Financial Officer of an Organization did cause or is reasonably likely to

cause a Material Effect on an Organizations Common Stock Price

i Negative earning or sales announcement

The public announcement of an Organizations past or future

earnings or sales which is substantially less favorable than any of

the following U an Organizations prior years earnings or sales

for the same period ii an Organizations prior public statements

or projections regarding earnings or sales for such period or iii

an outside securities analysts published estimate of anOrganizationsearnings or sales

ii Loss of a patent trademark or copyright or major customer or contract

The public announcement of an unforeseen loss of i an

Organizations intellectual property rights for a patent trademark

or copyright other than by expiration ii a major customer or

client of an Organization or iii a major contract with an

Organization

Product recall or delay

The public announcement of the recall of a major product of an

Organization or the unforeseen delay in the production of a major

product of an Organization

iv Mass tort

The public announcement or accusation that an Organization has

caused the bodily injury sickness disease death or emotional

distress of a group of persons or damage to or destruction of any

tangible group of properties including the loss of use thereof

v Employee layoffs or loss of key executive officers

The public announcement of layoffs of Employees of anOrganizationThe death or resignation of one or more key Executives of

the Named Entity

vi Elimination or suspension of dividend

The public announcement of the elimination or suspension of a

regularly scheduled dividend previously being paid by an

Organization

vii Writeoff of assets

The public announcement that an Organization intends to write off

a material amount of its assets

75013 200 BRive Copy 1

HIGHLY CONFIDENTIAL


viii Debt restructuring or default

The public announcement that an Organization has defaulted or

intends to default on its debt or intends to engage in a debt

restructuring

ix Bankruptcy

x

The public announcement that an Organization intends to file for

bankruptcy protection or that a third party is seeking to file for

involuntary bankruptcy on behalf of an Organization or that

bankruptcy proceedings are imminent whether voluntary or

involuntary

Governmental or regulatory litigation

The public announcement of the commencement or threat of

commencement of litigation or governmental or regulatory

proceedings against an Organization

xi Unsolicited takeover bid

An unsolicited written offer or bid by any person or entity other

than an Insured or any affiliate of any Insured whether publicly

announced or privately made to an Executive of an Organization

to effect a Transaction as defined in Clause 12a of the policy of

the Named Entity

A Crisis shall first commence when an Organization or any of its Executives

shall first become aware of such Crisis A Crisis shall conclude once a Crisis

Firm advises an Organization that such Crisis no longer exists or when the

CrisisFundSM has been exhausted

b Crisis Firm means any public relations firm crisis management firm or law

firm as listed in section III of this Appendix B Any Crisis Firm may be hired

by an Organization to perform Crisis Services without further approval by the

Insurer

c Crisis Loss means the following amounts incurred during the pendency of a

Crisis for which an Organization is legally liable

1 the reasonable and necessary fees and expenses incurred by a Crisis

Firm in the performance of Crisis Services for an Organization

2 the reasonable and necessary fees and expenses incurred in the printing

advertising or mailing of materials and

3 travel costs incurred by Executives employees or agents of an

Organization or of the Crisis Firm arising from or in connection with

the Crisis

d Crisis Services means those services performed by a Crisis Firm in advising

an Insured or any Employee of an Organization on minimizing potential harm

to an Organization from the Crisis including but not limited to maintaining

and restoring investor confidence in an Organization and solely with respect

to Delisting Crisis Loss any legal services performed by a Crisis Firm in

responding to a Delisting Crisis

75013 200 BRRive Copy 2

HIGHLY CONFIDENTIAL


e Delisting Crisis means written notice to an Organization that such

Organizations securities will be or have been delisted from an Exchange

f Exchange means NASDAQ the American Stock Exchange the New York

Stock Exchange and the Singapore Exchange

g Material Effect on an Organizations Common Stock Price means within a

period of 24 hours that the price per share of an Organizations commonstock shall decrease by the greater of $200 or 15 net of the percentage

change in the Standard Poors Composite Index

111 EXCLUSIONS

The term Crisis shall not include any event relating to

i any Claim which has been reported or any circumstances of which

notice has been given under any policy of which this policy is a renewal

or replacement or which it may succeed in time

ii the actual alleged or threatened discharge dispersal release or escape

of Pollutants or any direction or request to test for monitor clean upremove contain treat detoxify or neutralize Pollutants provided

however the foregoing shall not apply if the policy contains any

provision or endorsement modifying or deleting in part or in whole

exclusion k of the policy or

iii the hazardous properties of nuclear materials provided however the

foregoing shall not apply to any Crisis arising from the ownership of

operation of construction of management of planning of maintenance

of or investment in any nuclear facility

Ill PRE APPROVED CRISIS FIRMS

a For all Crisis including a Delisting Crisis Crisis Firms means

relations firm listed in 1 7 below

1 ABERNATHY MACGREGOR 4SCANLO N

501 Madison Avenue

New York NY 10022

212 371 5999

Contact James T MacGregor

2 BURSON MARSTELLER 5230 Park Avenue South

New York NY 10003 1566

212 614 5236

Contact Michael Claes

3 PATTON BOGGS LLP

2550 M Street NWWashington DC 20037

202 457 6000

Contact Thomas H Boggs

6

KEKST AND COMPANY437 Madison Avenue

New York NY 10022

212 593 2655

Contact Andrew Baer

any public

ROBINSON LERER MONTGOMERY75 Rockefeller Plaza 6

thfloor

New York NY 10019

212 484 7721

Contact Michael Gross

SARD VERBINNEN CO630 Third Avenue

New York NY 10017

212 687 8080

Contact Paul Verbinnen or George Sard

75013 200 BRO>ive Copy 3

HIGHLY CONFIDENTIAL


7 SITRICK COMPANY2029 Century Park East

Suite 1750

Los Angeles CA 90067

310 788 2850

Contact Michael Sitrick

b Solely for Delisting Crisis Crisis Firms shall also include any Panel

Counsel Firm as defined in Clause 9 approved to handle Securities Claims

75013 200 BROA ive Copy 4

HIGHLY CONFIDENTIAL


ENDORSEMENT 1

This endorsement effective 1201 am May 1 2007 forms a part of

policy number 7419806issued to WASHINGTON MUTUAL INC

by National Union Fire Insurance Company of Pittsburgh Pa

WASHINGTON AMENDATORY ENDORSEMENT

Wherever used in this endorsement 1 Insurer means the insurance company which

issued this policy and 2 named Insured First Named Insured and Insured mean the

Named Corporation Named Organization Named Sponsor Named Insured Named Entity

or Insured stated in the declarations page

The following is added and supersedes any provision to the contrary

A CANCELLATION

1 The Insured may cancel this policy by mailing or delivering to the Insurer

written notice of cancellation or by surrender of the policy prior to or on the

effective date of such cancellation

2 The Insurer may cancel this policy by mailing or delivering to the Insured and

the Insureds representative in charge of the subject of the insurance if

applicable written notice of cancellation including the actual reason for the

cancellation to the last mailing address known to the Insurer at least

a 10 days before the effective date of cancellation if the Insurer cancels

for nonpayment of premium or

b 45 days before the effective date of cancellation if the Insurer cancels

for any other reason

3 Like notice of cancellation will also be mailed to any mortgage holder pledgee

or other person shown in this policy with an interest in any loss which mayoccur thereunder at their last mailing address known to the Insurer

4 Notice of cancellation will state the effective date of cancellation The policy

period will end on that date

5 If notice is mailed proof of mailing will be sufficient proof of notice

6 If the policy is cancelled we will send the first Named Insured any premium

refund due If the Insurer cancels the refund will be pro rata If the first

Named Insured cancels the refund will be at least 90 of the pro rata refund

The cancellation will be effective even if we have not made or offered a

refund

B NONRENEWAL

1 The Insurer may elect not to renew this policy by mailing or delivering written

notice of nonrenewal to the First Named Insured and the First Named

Insureds representative in charge of the subject of the insurance at their

respective last mailing addresses known to the Insurer The notice of

nonrenewal shall state the actual reason for nonrenewal The Insurer will also

mail to any mortgage holder or other person shown in this policy with an

interest in any loss which may occur thereunder at their last mailing address

END 001

78804 1003 BROIKive Copy Page 1 of 2

HIGHLY CONFIDENTIAL


ENDORSEMENT 1 continued

known to the Insurer written notice of nonrenewal The Insurer will mail or

deliver these notices at least 45 days before the

a Expiration of the policy or

b Anniversary date of this policy if this policy has been written for a term

of more than one year

Otherwise the Insurer will renew this policy unless

a The Insured fails to pay the renewal premium after the Insurer has

expressed willingness to renew and has sent a statement of the renewal

premium to the Insured and the Insureds representative in charge of the

subject of insurance at least 20 days before the expiration date

b Other equivalent coverage has been procured by the Insured prior to the

expiration date of the policy or

c The contract is evidenced by a written binder containing a clearly stated

expiration date which has expired according to its terms

ALL OTHER TERMS CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED


78804 1003 BROOK6liive Cop V

END 001

Page 2 of 2

HIGHLY CONFIDENTIAL


ENDORSEMENT 2




STATE AMENDATORY INCONSISTENT

In consideration of the premium charged it is hereby understood and agreed that in the

event that there is an inconsistency between a state amendatory attached to this policy

and any term or condition of this policy then it is understood and agreed that where

permitted by law the Insurer shall apply those terms and conditions of either the

amendatory or the policy which are more favorable to the Insured



END 002

89382 505 BROW hive Copy Page 1 of 1

HIGHLY CONFIDENTIAL


ENDORSEMENT 3




SEVERABILITY OF APPLICATION ENDORSEMENT

In consideration of the premium charged it is hereby understood and agreed that the

following Clause is added to the policy at the end thereof

SEVERABILITY

In granting coverage under this policy it is agreed that the Insurer has relied uponthe statements warranties and representations contained in the Application as

being accurate and complete All such statements warranties and representations

are the basis for this policy and are material to the risk assumed by the Insurer and

are to be considered as incorporated into this policy

The Insureds agree that in the event that the particulars and statements contained

in the Application are not accurate and complete then this Policy shall be void ab

initio with respect to any of the following Insureds

1 any Insured Person who knew as of the inception date of the Policy

Period the facts that were not accurately and completely disclosed in

the Application

2 an Organization under Clause 1 Insuring Agreements COVERAGEBii to the extent it indemnifies any Insured Person referenced

in 1above and

3 an Organization under Clause 1 Insuring Agreement COVERAGEBi if any past or present chief executive officer chief operating

officer chief financial officer of an Organization knew as of the

inception date of the Policy Period the facts that were not accurately

and completely disclosed in the Application

whether or not such Insured Person knew that such facts were not accurately and

completely disclosed in the Application

No knowledge possessed by an Insured Person will be imputed to any other Insured

Person


BIW I ve Cop VEND 3AUTAORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 4

This endorsement effective 1201 am May 1 2007


forms a part of


PROFESSIONAL EO EXCLUSION

SHAREHOLDER CARVEOUT DEFENSE COSTS CARVEBACK

In consideration of the premium charged it is hereby understood and agreed that solely

with respect to services rendered by the Organization for a fee the Insurer shall not be

liable to make any payment for Loss in connection with any Claim made against any

Insured alleging arising out of based upon or attributable to the Organizations or any

Insureds performance of or failure to perform professional services or any acts errors

or omissions relating thereto

Notwithstanding the foregoing it is further understood and agreed that this endorsement

shall not apply to any Securities Claim provided that such Securities Claim is instigated

and continued totally independent of and totally without the solicitation of or assistance

of or active participation of or intervention of the Organization or any Insured

This exclusion shall not apply to covered Defense Costs incurred in connection with a

Claim alleging a Wrongful Act

ALL TERMS CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED

HRoc4ive Cop VEND 4AUT ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 5




NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT


Insurer shall not be liable to make any payment for Loss in connection with any Claim

made against any Insured

A alleging arising out of based upon attributable to or in any way involving directly

or indirectly the Hazardous Properties of Nuclear Material including but not

limited to

1 Nuclear Material located at any Nuclear Facility owned by or operated by or

on behalf of the Organization or discharged or dispersed therefrom or

2 Nuclear Material contained in spent fuel or waste which was or is at any time

possessed handled used processed stored transported or disposed of by or

on behalf of the Organization or

3 the furnishing by an Insured or the Organization of services materials parts

or equipment in connection with the planning construction maintenance

operation or use of any Nuclear Facility or

4 Claims for damage or other injury to the Organization or its shareholders

which allege arise from are based upon are attributed to or in any wayinvolve directly or indirectly the Hazardous Properties of Nuclear Material

B 1 which is insured under a nuclear energy liability policy issued by Nuclear

Energy Liability Insurance Association Mutual Atomic Energy Liability

underwriters or Nuclear Insurance Association of Canada or would be insured

under any such policy but for its termination or exhaustion of its limit of

liability or

2 with respect to which a any person or organization is required to maintain

financial protection pursuant to the Atomic Energy Act of 1954 or any law

amendatory thereof or b the Insured is or had this policy not been issued

would be entitled to indemnity from the United States of America or any

agency thereof under any agreement entered into by the United States of

America or any agency thereof with any person or organization

As used in this endorsement

Hazardous Properties include radioactive toxic or explosive properties

Nuclear facility means

a any nuclear reactor

b any equipment or device designed or used for

1 separating the isotopes of uranium or plutonium

END 005

83550 11103 BROL ive Copy Page 1 of 2

HIGHLY CONFIDENTIAL



2 processing or utilizing spent fuel or

3 handling processing or packaging wastes

c any equipment or device used for the processing fabricating or alloying of

special nuclear material if at any time the total amount of such material in the

custody of the Insured at the premises where such equipment or device is

located consists of or contains more than 25 grams of plutonium or uranium

233 or any combination thereof or more than 250 grams of uranium 235 and

d any structure basin excavation premises or place prepared or used for the

storage or disposal of waste and includes the site on which any of the

foregoing is located all operations conducted on such site and all premises

used for such operations

Nuclear Material means source material special nuclear material or byproduct material

Nuclear Reactor means any apparatus designed or used to sustain nuclear fission in a

self supporting chain reaction or to contain a critical mass of fissionable material

Source Material Special Nuclear Material and Byproduct Material have the

meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof

Spent Fuel means any fuel element or fuel component solid or liquid which has been

used or exposed to radiation in a nuclear reactor

Waste means any waste material 1 containing by product material and 2 resulting

from the operation by any person or organization of any Nuclear Facility included within

the definition of nuclear facility under paragraph a or b thereof



END 005

83550 1103 BRive Copy Page 2 of 2

HIGHLY CONFIDENTIAL


ENDORSEMENT 6

This endorsement effective 1201 am


May 1 2007 forms a part of


PRIOR ACTS COVERAGESCHEDULED ENTITIES

In consideration of the charged it is hereby understood and agreed that the term

Subsidiary is amended to include the entityies listed below

ENTITYIES

Columbia Federal Savings Bank and

Shoreline Savings Bank and their

Subsidiaries

Old Stone Bank and Subsidiaries

Frontier Federal Savings Association

And Subsidiaries

Williamsburg Federal Savings Bank

And Subsidiaries

Vancouver Federal Savings Bank

And Subsidiaries

Crossland Savings FSB

And Subsidiaries

Sound Savings and Loan Association

And Subsidiaries

World Savings and Loan Association

And Subsidiaries

Great Northwest Bank

And Subsidiaries

Pioneer Savings Bank

And Subsidiaries

Pacific First Bank A Federal

Savings Bank

And Subsidiaries

DIME BANCORP INC

And Subsidiaries

Far West Federal Savings Bank

And Subsidiaries

Summit Savings Bank

And Subsidiaries

Olympic Bank A Federal Savings Bank

And Subsidiaries

Enterprise Bank

And Subsidiaries

Western Bank

And Subsidiaries

ACQUISITION CREATION DATE

April 29 1988

June 1 1990

June 30 1990

September 14 1990

July 31 1991

November 8 1991

January 1 1992

March 6 1992

April 1 1992

March 1 1993

April 9 1993

August 4 1993

April 15 1994

November 14 1994

April 28 1995

August 31 1995

January 31 1996

BROftiive CopyEND 6

HIGHLY CONFIDENTIAL


ENDORSEMENT 6 ICnntlnllPd




Utah Federal Savings Bank

And Subsidiaries

United Western Financial Group

And Subsidiaries

Industrial Bank

And Subsidiaries

Long Beach Financial Corporation

And Subsidiaries

Alta Residential Mortgage Trust

And Subsidiaries

Mortgage Operations of The PNC

Financial Services Group

And Subsidiaries

Bank United Corp

And Subsidiaries

Dime Bancorp Inc

And Subsidiaries

November 30 1996

January 15 1997

December 31 1998

October 1 1999

February 1 2000

January 31 2001

February 9 2001

August 4 1993

It

is further understood and agreed that solely with respects to the Entities listed above

coverage as is afforded under this policy shall apply for Wrongful Acts committed or

allegedly committed on before and after the effective time such Entity became a

Subsidiary and prior to the effective time that such Subsidiary ceases to be a Subsidiary

BROVve COPYEND 6

HIGHLY CONFIDENTIAL


ENDORSEMENT 6 Continued




A Subsidiary ceases to be a Subsidiary when the Named Entity no longer maintains

Management Control of the Subsidiary either directly or indirectly through one or more of

its Subsidiaries

ALL OTHER TERMS CONDITIONS AND EXCLUSIONS OF THIS POLICY SHALL REMAIN

UNCHANGED

BROfive Cop VEND 6

HIGHLY CONFIDENTIAL


ENDORSEMENT 7




RUNOFF COVERAGE FOR SCHEDULED ENTITIES

In consideration of the premium charged it is hereby understood and agreed that with

respect to the following entities

Entity Runoff expiration date

American Savings Bank FAand its subsidiaries December 20 2001

HF Ahmanson Co

and its subsidiaries October 1 2004

Great Western Financial Corp

and its subsidiaries July 1 2003

Providian Financial Corporation

and its subsidiaries October 1 2011

This policy shall provide primary Directors and Officers coverage for claims arising from

prior acts after the expiration of the respective runoff policies in place for each of these

entities as indicated above However if National Union Fire Insurance Company of

Pittsburgh PA is not the primary Directors and Officers carrier for Washington Mutual at

the time of the expiration of each of the policies listed above then this endorsement shall

be null and void

ALL OTHER TERMS CONDITIONS AND EXCLUSIONS OF THIS POLICY SHALL REMAIN

UNCHANGED

BROFlive CopyEND 7

C•

•• 4

AUT ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 8




CRISIS PLUS

In consideration of the premium charged it is hereby understood and agreed that the policy

is hereby amended as follows

1 CRISISFUNDSM AMENDED

1 Solely for the purposes of a Financial Statement Crisis Appendix B is hereby

amended as follows

i Definition a Crisis shall also mean

3 a Financial Statement Crisis

ii Clause

III PREAPPROVED CRISIS FIRMS is hereby amended by

adding the following at the end thereof

c Solely for Financial Statement Crisis Crisis Firms means

any Panel Counsel Firm as defined in Clause 9 approved to

handle Securities Claims andor any public accounting firm

iii Definition d Crisis Services is hereby deleted in its entirety and

replaced by the following

Crisis Services means any legal or accounting services performed

by a Crisis Firms in investigating and responding to a Financial

Statement Crisis

iv The following additional definitions are hereby added

Financial Statement Crisis means the written public announcement

by an Organization of the need or potential need for a restatements

of an Organizations previously publicly filed financial statements

provided however that Financial Statement Crisis shall not include

any announcements regarding restatements resulting in whole or in

part from a change in any rule law or statute relating to financial

reporting including but not limited to any change in Generally

Accepted Accounting Principles provided that payment of any Crisis

Loss under this policy shall not waive any of the Insurers rights under

this policy or at law

BROive Cop VEND 8

HIGHLY CONFIDENTIAL






Financial Statement Crisis Loss means a Crisis Loss resulting solely

from a Financial Statement Crisis

2 Definition d CrisisFundSM is hereby deleted in its entirety and replaced by

the following

d CrisisFundSM means

1 in the case of all Crisis Loss other than Delisting Crisis Loss

and Financial Statement Crisis Loss the dollar amount set

forth in Item 7a of the Declarations and

2 in the case of Delisting Crisis Loss the dollar amount set forth

in Item 7a of the Declarations less any Crisis Loss paid plus

the additional dollar amount set forth in Item 7b of the

Declarations combined

3 in the case of Financial Statement Crisis Loss the dollar

amount set forth in Item 7a of the Declarations less any

Crisis Loss paid plus the additional dollar amount set forth in

Item 7c of the Declarations

3 Item 7 of the Declarations is hereby amended to include the following

additional Item 7c

7c Additional CRISISFUNDSM

for Financial Statement

CrisisLoss$50000

ALL OTHER TERMS CONDITIONS AND LIMITATIONS REMAIN UNCHANGED

BR pfMive COPYEND 8

HIGHLY CONFIDENTIAL


ENDORSEMENT 9




CAPTIVE INSURANCE COMPANY COVERAGE


Insurer shall not be liable to make any payments for Loss in connection with any Claim

made against any Insured alleging arising out of based upon or attributable to the

ownership management maintenance operation andor control by the Organization of any

captive insurance company or entity including but not limited to a Claim alleging the

insolvency or bankruptcy of the Organization as a result of such ownership management

maintenance operation andor control

Notwithstanding the above this exclusion shall not apply to the captive insurance

companies listed below hereinafter Captives

CAPTIVE INSURANCE COMPANIES

1 Marion Insurance Company Inc and

2 WM Mortgage Reinsurance Company Inc

It

is further understood and agreed that in regard to the Captives listed above the Insurer

shall not be liable to make any payment for Indemnifiable Loss in connection with any

Claim made against the Insureds alleging arising out of based upon or attributable to anythird party business performed by or contracted into by a Captive


BRO54 ve COPYEND 9AUT ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 10

This endorsement effective 1201 dm May 1 2007 forms a part of



AMEND CLAUSE 6 RETENTION

In consideration of the premium charged it is hereby understood and agreed that the first

sentence of the first paragraph of Clause 6 RETENTION is deleted in its entirety and

replaced with the following

For each Claim the Insurer shall only be liable for the amount of Loss arising from a

Claim which is in excess of the applicable Retention amounts stated in Items 4a4b and 4c of the Declarations such Retention amounts to be borne by an

Organization andor the Insured Person and remain uninsured with the exception of

the Side A Excess DIC Policy as defined below with regard to all Loss other

than NonIndemnifiable Loss

The Insurer shall recognize that any Indemnifiable Loss that is paid by the following policy

or those policies specifically designated as excess over it or any renewal or replacement

thereof shall contribute to and shall reduce the Retention amount applicable to such

covered Indemnifiable Loss as stated in Item 4 of the Declarations

Insurer Insured Policy No Policy Period

XL Specialty Washington Mutual Inc ELU09768507 0501200705012008Insurance Company

the Side A Excess DIC Policy

As a precondition to such recognition of the erosion of the Retention amount the Named

Entity shall provide the Insurer with written proof to the Insurers satisfaction that

payment of such Indemnifiable Loss has been made under the Side A Excess DIC Policy

or those policies specifically designated as excess over it or any renewal or replacement

thereof


BROFive CopYEND 10AUT ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 11




CLAUSE 7a12 AMENDATORY

In consideration of the premium charged it is hereby understood and agreed that Clause

7a2 is hereby deleted in its entirety and replaced with the following

2 within 60 days after the end of the Policy Period or the Discovery Period if

applicable as long as such Claim was first made against an Insured within

the final 90 days of the Policy Period or the Discovery Period if applicable


BRof ive Cop VEND 11

HIGHLY CONFIDENTIAL


ENDORSEMENT 12




AMEND CLAUSE 8 DEFENSE COSTS

In consideration of the premium charged it is hereby understood and agreed that in Clause

8 DEFENSE COSTS SETTLEMENTS JUDGMENTS INCLUDING THE ADVANCEMENT OF

DEFENSE COSTS the sixth paragraph is deleted in its entirety and replaced with the

following

With respect to i Defense Costs jointly incurred by ii any joint settlement

entered into by andor iii any judgment of joint and several liability against any

Organization and any Insured in connection with any Claim other than a Securities

Claim any such Organization and any such Insured and the Insurer agree to use

their best efforts to determine a fair and proper allocation of the amounts as

between any such Organization any such Insured and the Insurer In the event that

a determination as to the amount of Defense Costs to be advanced under the policy

cannot be agreed to then the Insurer shall advance Defense Costs excess of any

applicable retention amount which the Insurer states to be fair and proper until a

different amount shall be agreed upon or determined pursuant to the provisions of

this policy and applicable law


BR4fhive Cop VEND 12

HIGHLY CONFIDENTIAL


ENDORSEMENT 13




AMEND CLAUSE 10 DISCOVERY


10 DISCOVERY CLAUSE shall be deleted in its entirety and replaced with the following

10 DISCOVERY CLAUSE

Except as indicated below if the Named Entity shall cancel or the Named

Entity or the Insurer shall refuse to renew this policy the Named Entity shall

have the right to a period of one year following the effective date of such

cancellation or nonrenewal the Discovery Period upon payment of the respective

Additional Premium Amount described below in which to give to the Insurer

written notice pursuant to Clause 7a and 7c of the policy of i Claims first made

against an Insured and ii circumstances of which an Organization or an Insured

shall become aware in either case during said Discovery Period and solely with

respect to a Wrongful Act occurring prior to the end of the Policy Period and

otherwise covered by this policy

The Additional Premium Amount for one year shall be no more than 175 of the

Full Annual Premium As used herein Full Annual Premium means the premium

level in effect immediately prior to the end of the Policy Period

Notwithstanding the first paragraph of Clause 5 if the Named Entity shall cancel or

the Insurer or the Named Entity shall refuse to renew this policy then the Named

Entity shall also have the right to request an offer from the Insurer of a Discovery

Period with respect to Wrongful Acts occurring prior to the end of the Policy

Period with an aggregate limit of liability applicable to Claims made against the

Insured during such Discovery Period which is in addition to and not part of the

applicable Limit of Liability set forth in Item 3 of the Declarations The Insurer shall

quote such a Discovery Period pursuant to such terms conditions exclusions and

additional premium as it deems appropriate in its sole and absolute discretion

In the event of a Transaction as defined in Clause 12a the Named Entity shall

have the right to request an offer from the Insurer of a Discovery Period with

respect to Wrongful Acts occurring prior to the effective time of the Transaction

The Insurer shall offer such Discovery Period pursuant to such terms conditions

exclusions and additional premium as the Insurer may reasonably decide In the

event of a Transaction the right to a Discovery Period shall not otherwise exist

except as indicated in this paragraph

BROftkive Cop VEND 13

HIGHLY CONFIDENTIAL






The Discovery Period is not cancelable and the additional premium charged shall be

fully earned at inception This Clause 10 shall not apply to any cancellation resulting

from nonpayment of premium The rights contained in this Clause 10 shall

terminate unless written notice of election of a Discovery Period together with anyadditional premium due is received by the Insurer no later than thirty 30 days

subsequent to the effective date of the cancellation nonrenewal or Transaction

ALL OTHER TERMS CONDITIONS AND EXCLUSIONS SHALL REMAIN UNCHANGED

BR091 Mive Cop VEND 13

HIGHLY CONFIDENTIAL


ENDORSEMENT 14




AMEND CLAUSE 12 AUTOMATIC SUBSIDIARY COVERAGE


12 ORGANIZATIONAL CHANGES shall be deleted and replaced with the following

12 ORGANIZATIONAL CHANGES

a If during the Policy Period

1 the Named Entity shall consolidate with merge into or sell all or

substantially all of its assets to any other person or entity or group of

persons or entities acting in concert or

2 any person or entity or group of persons or entities acting in concert

shall acquire Management Control of the Named Entity

any of such events being a Transaction then this policy shall continue in

full force and effect as to Wrongful Acts occurring prior to the effective time

of the Transaction but there shall be no coverage afforded by any provision

of this policy for any actual or alleged Wrongful Act occurring after the

effective time of the Transaction This policy may not be canceled after the

effective time of the Transaction and the entire premium for this policy shall

be deemed earned as of such time The Named Entity shall also have the

right to an offer by the Insurer of a Discovery Period described in the fourth

paragraph of Clause 10 of this policy

b Subsidiary Additions Subsidiary also means any forprofit entity of which

the Named Entity first had Management Control during the Policy Period

whether directly or indirectly through one or more other Subsidiaries and

1 whose assets total $15 Billion or less or

2 whose assets total more than $15 Billion but such entity shall

be a Subsidiary only i for a period of sixty 60 days from the date

the Named Entity first had Management Control of such entity or ii

until the end of the Policy Period which ever ends or occurs first

hereinafter AutoSubsidiary Period The Named Entity shall report

such Subsidiary to the Insurer in writing prior to the end of the

Policy Period

BR091�MiVeCop VEND 14

HIGHLY CONFIDENTIAL






The insurer shall extend coverage for any Subsidiary described in 12b2above and any Insured Person thereof beyond its respective

AutoSubsidiary Period if during such AutoSubsidiary Period the Named

Entity shall have provided the Insurer with full particulars of the new

Subsidiary and agreed to any additional premium and amendment of the

provisions of this policy required by the Insurer relating to such Subsidiary

Further coverage as shall be afforded to any Subsidiary and any Insured

Person thereof is conditioned upon the Named Entity paying when due anyadditional premium required by the Insurer relating to such Subsidiary

c Insured Persons and Outside Entity Executives Coverage will automatically

apply to all new Insured Persons of and Outside Entity Executives of an

Organization following the inception date of this policy

d Other Organizational Changes In all events coverage as is afforded under

this policy with respect to a Claim made against any Organization andor any

Insured Person thereof shall only apply for Wrongful Acts committed or

allegedly committed after the effective time such Organization became an

Organization and such Insured Person became an Insured Person and prior

to the effective time that such Organization ceases to be an Organization or

such Insured Person ceases to be an Insured Person An Organization ceases

to be an Organization when the Named Entity no longer maintains

Management Control of an Organization either directly or indirectly through

one or more of its Subsidiaries

However solely with respect to a Subsidiary that became a Subsidiary on or

prior to May 1 2003 coverage as is afforded under this policy with respect

to a Claim made against such Subsidiary shall apply for Wrongful Acts

committed or allegedly committed before on or after the effective time such

Subsidiary became a Subsidiary and prior to the effective time that such

Subsidiary ceases to be a Subsidiary provided that

1 at the time such Subsidiary became a Subsidiary the assets of the

Subsidiary did not exceed ten percent 10 of the total consolidated

assets of the Named Entity and

2 the Subsidiary has achieved a net profit as determined in accordance

with Generally Accepted Accounting Principles for the Subsidiarys

two most recent fiscal years and

BROMive Cop VEND 14

HIGHLY CONFIDENTIAL






3 there has occurred not fact circumstance situation transaction or

event which has been the subject of any notice given by the

Subsidiary under any policy of directors officers and corporate

liability insurance

An Organization ceases to be an Organization when the Named Entity no longer

maintains Management Control of the Organization either directly or indirectly

through one or more of its Subsidiaries


BRptive Cop VEND 14


HIGHLY CONFIDENTIAL


ENDORSEMENT 15




AMEND CLAUSE 13 SUBROGATION


13 Subrogation is deleted in its entirety and replaced by the following

In the event of any payment under this policy the Insurer shall be subrogated to the

extent of such payment to all of each and every Organizations and Insureds rights

of recovery thereof and each such Organization and Insured shall execute all

papers required and shall do everything that may be necessary to secure such rights

including the execution of any and all documents necessary to enable the Insurer

effectively to bring suit in the name of each such Organization and each such

Insured In no event however shall the Insurer exercise its rights of subrogation

against an Insured under this policy unless such Insured has been convicted of any

deliberate criminal or deliberate fraudulent act by the Insured if any final

adjudication establishes that such deliberate criminal or deliberate fraudulent act

was committed or to the gaining of any profit or advantage to which nay final

adjudication establishes the Insured was not legally entitled

g•q p•iF ive Cop VEND 15

HIGHLY CONFIDENTIAL


ENDORSEMENT 16




REMOVE CLAUSE 17 ADR


17 Alternative Dispute Resolution Process is deleted in its entirety


BROMive CopyEND 16

HIGHLY CONFIDENTIAL


ENDORSEMENT 17




AMEND CLAUSE 19 BANKRUPTCY

In consideration of the premium charged it is hereby understood and agreed that Clause 19

Bankruptcy is deleted in its entirety and replaced with the following

19 Bankruptcy

Bankruptcy or insolvency of any Organization or any Insured Person shall not relieve

the Insurer of any of its obligations hereunder

It

is further understood and agreed that the coverage provided under this policy is

intended to protect and benefit the Insured Persons Further if a liquidation or

reorganization proceeding is commenced by the Named Entity andor any other

Organization whether voluntarily or involuntarily under Title 11 of the United

States Code as amended or any similar state local or foreign law collectively

Bankruptcy Law then in regard to a covered Claim under this policy the

Insureds and the Insurer hereby agree not to oppose or object to any efforts by any

Insured Persons to obtain relief from any stay or injunction applicable to the

proceeds of this policy as a result of the commencement of such liquidation or

reorganization proceeding


BRCM ve Cop VEND 17

HIGHLY CONFIDENTIAL


ENDORSEMENT 18




AMEND CLAUSE 22 ORDER OF PAYMENTS


22 Order of Payments is deleted in its entirety and replaced with the following

22 ORDER OF PAYMENTS

In the event of Loss arising from a covered Claim for which payment is due under

the provisions of this policy then the Insurer shall in all events

a first pay Loss for which coverage is provided under Coverage A first to

independent directors then to all other insured persons and Coverage C of

this policy then

b only after payment of Loss has been made pursuant to Clause 22a above

with respect to whatever remaining amount of the Limit of Liability is

available after such payment at the written request of a majority of the

Board of Directors of the Named Entity either pay or withhold payment of

such other Loss for which coverage is provided under Coverage Bii of this

policy and then

c only after payment of Loss has been made pursuant to Clause 22a and

Clause 22b above with respect to whatever remaining amount of the Limit

of Liability is available after such payment at the written request of a

majority of the Board of Directors of the Named Entity either pay or

withhold payment of such other Loss for which coverage is provided under

Coverages Bi and D of this policy

In the event the Insurer withholds payment pursuant to Clause 22b andor Clause

22c above then the Insurer shall at such time and in such manner as shall be set

forth

in written instructions of the of a majority of the Board of Directors of the

Named Entity remit such payment to an Organization or directly to or on behalf of

an Insured Person

The bankruptcy or insolvency of any Organization or any Insured Person shall not

relieve the Insurer of any of its obligations to prioritize payment of covered Loss

under this policy pursuant to this Clause 22


BROFive Cop VEND 18

Zx C••4AUT ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 19




AMEND DEFINITION Z SUBSIDIARY

In consideration of the premium charged it is hereby understood and agreed that the policy

is amended by deleting Clause 2 DEFINITIONS paragraph z Subsidiary in its entirety

and replacing it with following

z Subsidiary means 1 any forprofit entity limited partnership general partnership

or joint venture and any other organization listed by endorsement including but not

limited to 1301 Second Avenue LLC and Silver Granite Investment Corporation as

long as the Named Entity has Management Control Controlled Entity on or

before the inception of the Policy Period either directly or indirectly through one or

more other Controlled Entities and 2 any notforprofit entity sponsored

exclusively by an Organization


BROkSk ve Cop VEND 19

UT ORIZED REPR EN ATIVA E

HIGHLY CONFIDENTIAL


ENDORSEMENT 20




AMEND DEFINITION OF APPLICATION

In consideration of the premium charged it is hereby understood and agreed that Section

2 DEFINITIONS a shall be deleted and replaced with the following

a Application means each and every signed application any attachments to such

applications other materials submitted therewith or incorporated therein and any

other documents submitted in connection with the underwriting of this policy or the

underwriting of any other directors and officers or equivalent liability policy issued

by the Insurer or any of its affiliates of which this policy is a renewal replacement

or which it succeeds in time and any public documents filed by an Organization

within the last Twelve 12 months prior to the inception date of this policy with

the Securities and Exchange Commission SEC or any federal state local or

foreign regulatory agency including but not limited to the Organizations Annual

Reports 1 OKs 1 OQs 8Ks and proxy statements


BROW vFpve COPyEND 20

M • ••4UT ORIZED REPR EN ATIVA E

HIGHLY CONFIDENTIAL


ENDORSEMENT 21




AMEND DEFINITION OF EXECUTIVE


2 DEFINITIONS j shall be deleted and replaced with the following

j Executive means any

1 past present and future duly elected or appointed director officer trustee or

governor of a corporation management committee member of a joint

venture and member of the management board of a limited liability company

or equivalent position

2 past present and future person in a duly elected or appointed position in an

entity organized and operated in a Foreign Jurisdiction that

is equivalent to

an executive position listed in Definition j1

3 past present and future General Counsel and Risk Manager or equivalent

position of the Organization or

4 Executive as defined in j1 3 above or any Employee of an Organization

serving as a past present or future member of any internal committee

established by and for an Organization including but not limited to any

Organizations audit committee as that committee is described in the

Securities and Exchange Commission Release No 3442266Audit

Committee Disclosure Rule


BR0911ve CopyEND 21

Ix 6• •••


HIGHLY CONFIDENTIAL


ENDORSEMENT 22




CONDUCT EXCLUSIONS

FINAL ADJUDICATION


4 EXCLUSIONS paragraphs a b and c are deleted in their entirety and replaced with

the following

a arising out of based upon or attributable to the gaining of any profit or

advantage to which any final adjudication establishes the Insured was not

legally entitled

b arising out of based upon or attributable to payments to an Insured of any

remuneration without the previous approval of the stockholders or members

of an Organization once any such unapproved payments shall be established

by any final adjudication to have been illegal

c arising out of based upon or attributable to the committing of any deliberate

criminal or deliberate fraudulent act by the Insured if any final adjudication

establishes that such deliberate criminal or deliberate fraudulent act was

committed


BRDtive CopYEND 22

HIGHLY CONFIDENTIAL


ENDORSEMENT 23




SECURITIES CLAIM DEFINITION AMENDED

SECURITIES CLAIM DEFINITION AMENDED

In consideration of the premium charged it is hereby understood and agreed that Clause 2DEFINITIONS shall be amended by deleting paragraph y definition of Securities Claim

thereof in its entirety and replacing it

with the following

y Securities Claim means a Claim other than an investigation of an Organization

made against any Insured

1 alleging a violation of any law rule or regulation whether statutory or common

law including but not limited to the purchase or sale or offer or solicitation of an

offer to purchase or sell securities which is

a brought by any person or entity alleging arising out of based upon or

attributable to the purchase or sale or offer or solicitation of an offer to

purchase or sell any securities of an Organization or

b brought by a security holder of an Organization with respect to such security

holders interest in securities of such Organization or

2 brought derivatively on the behalf of an Organization by a security holder of

such Organization relating to a Securities Claim as defined in subparagraph 1above

Notwithstanding the foregoing the term Securities Claim shall not include any

Claim brought by any Executive or Employee of an Organization alleging arising out

of based upon or attributable to the loss of or failure to receive or obtain the

benefit of stock stock warrants stock options or other securities of an

Organization


BRO dive CopyEND 23


11x 6••4UT ORIZED REPR EN ATIV EA

HIGHLY CONFIDENTIAL


ENDORSEMENT 24




AMEND DEFINITION OF DEFENSE COSTS

In consideration of the premium charged it is hereby understood and agreed that Clause 2DEFINITIONS f Defense Costs of the policy is hereby deleted in its entirety and

replaced with the following

Defense Costs means reasonable and necessary fees costs and expenses consented

consent will not be unreasonably withheld to by the Insurer including premiums for any

appeal bond attachment bond or similar bond arising out of a covered judgment but

without any obligation to apply for or furnish any such bond resulting solely from the

investigation adjustment defense andor appeal of a Claim against an Insured but

excluding any compensation of any Insured Person or any Employee of an Organization

BRQfl1Ve CopyEND 24

HIGHLY CONFIDENTIAL


ENDORSEMENT 25




AMEND DEFINTION OF LOSS


2 DEFINITIONS q shall be deleted and replaced with the following

p Loss means damages settlements judgments including prepostjudgment

interest on a covered judgment Defense Costs and Crisis Loss however

Loss other than Defense Costs shall not include 1 civil or criminal fines or

penalties 2 taxes 3 punitive or exemplary damages 4 the multiplied

portion of multiplied damages 5 any amounts for which an Insured is not

financially liable or which are without legal recourse to an Insured and 6matters which may be deemed uninsurable under the law pursuant to which this

policy shall be construed

Notwithstanding the foregoing paragraph Loss shall specifically include 1 civil

penalties assessed against any Insured Person pursuant to Section 2g 2 C of

the Foreign Corrupt Practices Act 15 USG 78dd2 g 2 C and 2 punitive

exemplary and multiplied damages imposed upon an Insured Enforceability of this

paragraph shall be governed by such applicable law that most favors coverage for

such penalties and punitive exemplary and multiple damages

In the event of a Claim alleging that the price or consideration paid or proposed to

be paid for the acquisition or completion of the acquisition of all or substantially all

the ownership interest in or assets of an entity is inadequate Loss with respect to

such Claim shall not include any amount of any judgment or settlement representing

the amount by which such price or consideration is effectively increased provided

however that this paragraph shall not apply to Defense Costs or to any

NonIndemnifiable Loss in connection therewith


BROftive COPYEND 25

HIGHLY CONFIDENTIAL


ENDORSEMENT 26




EXCLUSION j AMENDATORY ENDORSEMENT ADD 1v1 CARVEOUTS


4 EXCLUSIONS paragraph j is deleted in its entirety and replaced with the following

j for any Wrongful Act arising out of the Insured Person serving as an

Executive of an Outside Entity if such Claim is brought by the Outside Entity

or by any Executive thereof or which is brought by any security holder of

the Outside Entity whether directly or derivatively unless such security

holders Claim is instigated and continued totally independent of and totally

without the solicitation of or assistance of or active participation of or

intervention of the Outside Entity any Executive of the Outside Entity or an

Organization or any Executive of an Organization provided however this

exclusion shall not apply to

1 any Claim brought by any Executive of the Outside Entity in the form

of a crossclaim or thirdparty claim or other claim for contribution or

indemnity which results directly from a Claim that is covered by this

policy

2 any Employment Practices Claim brought by an Insured Person

3 in any bankruptcy proceeding by or against an Outside Entity any

Claim brought by the examiner trustee receiver creditors

committee liquidator or rehabilitator or any assignee thereof of such

Outside Entity if any

4 any Claim brought by any past Executive of an Organization who has not

served as a duly elected or appointed director officer trustee governor

management committee member member of the management board

General Counsel or Risk Manager or equivalent position of or consultant

for an Organization for at least two 2 years prior to such Claim being

first made against any person or

5 any Claim brought by an Executive of an Outside Entity formed and

operating in a Foreign Jurisdiction against any Outside Entity

Executive of such Outside Entity provided that such Claim is brought

and maintained outside the United States Canada or any other

common law country including any territories thereof

6 any Securities Claim provided that such Securities Claim is instigated

and continued totally independent of and totally without the solicitation

of or assistance of or active participation of or intervention of any

Organization or any Executive of an Organization provided however

solely with respect to this subsection 6

BR p1F1ive CopyEND 26

HIGHLY CONFIDENTIAL






a an Executives engaging in any protected activity specified in 18

USC 1514Aa whistleblower protection pursuant to the

SarbanesOxley Act of 2002 or any protected activity specified in

any other whistleblower protection pursuant to any similar state

local or foreign securities laws shall not be deemed to trigger this

exclusion

Notwithstanding the forgoing exception this exclusion j shall apply where the

actions of any Executive includes the filing of any proceeding or voluntarily

testifying voluntarily participating in or voluntarily assisting other than de minimis

assistance in the filing or prosecution of any proceeding against an Insured relating

to any violation of any rule or regulation of the Securities and Exchange Commission

or any similar provision of any federal state local or foreign rule or law relating to

fraud against shareholders other than such actions in connection with a proceeding

that is brought by the Securities and Exchange Commission any similar state local

or foreign regulatory body that regulates securities or any state local or foreign law

enforcement authority


BROftSkive COP VEND 26AU7 ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 27




Amend Exclusion i

In consideration of the premium charged it is hereby understood and agreed that Clause 4

i EXCLUSIONS is deleted in its entirety and replaced by the following

i which is brought by or on behalf of an Organization or any Insured Person other

than an Employee of an Organization or which is brought by any security holder or

member of an Organization whether directly or derivatively unless such security

holders or members Claim is instigated and continued totally independent of and

totally without the solicitation of or assistance of or active participation of or

intervention of any Executive of an Organization or any Organization provided

however this exclusion shall not apply to

1 any Claim brought by an Insured Person in the form of a crossclaim or

thirdparty claim for contribution or indemnity which is part of and results

directly from a Claim that is covered by this policy

2 any Employment Practices Claim brought by an Insured Person

3 in any bankruptcy proceeding by or against an Organization any Claim

brought by the examiner trustee receiver liquidator creditors committee or

rehabilitator or any assignee thereof of such Organization if any

4 any Claim brought by any past Executive of an Organization who has not

served as a duly elected or appointed director officer trustee governor

management committee member member of the management board

General Counsel or Risk Manager or equivalent position of or consultant for

an Organization for at least two 2 years prior to such Claim being first

made against any person or

5 any Claim brought by an Executive of an Organization formed and operating

in a Foreign Jurisdiction against such Organization or any Executive thereof

provided that such Claim is brought and maintained outside the United

States Canada or any other common law country including any territories

thereof

6 any Securities Claim provided that such Securities Claim is instigated and

continued totally independent of and totally without the solicitation of or

assistance of or active participation of or intervention of any Organization

or any Executive of an Organization provided however solely with respect

to this subsection 6

BRoftFive Cop VEND 27

HIGHLY CONFIDENTIAL






a an Executives engaging in any protected activity specified in 18

USC 1514Aa whistle blower protection pursuant to the

SarbanesOxley Act of 2002 or any protected activity specified in

any other whistle blower protection pursuant to any similar state

local or foreign securities laws shall not be deemed to trigger this

exclusion

Notwithstanding the forgoing exception this exclusion i shall apply where the

actions of any Executive includes the filing of any proceeding or voluntarily

testifying voluntarily participating in or voluntarily assisting other than de minimis

assistance in the filing or prosecution of any proceeding against an Insured relating

to any violation of any rule or regulation of the Securities and Exchange Commission

or any similar provision of any federal state local or foreign rule or law relating to

fraud against shareholders other than such actions in connection with a proceeding

that is brought by the Securities and Exchange Commission any similar state local

or foreign regulatory body that regulates securities or any state local or foreign law

enforcement authority

BROFkive CopyEND 27AUT ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 28




ERISA EXCLUSION AMENDED TO APPLY

SOLELY TO COMPANY BENEFIT PLANS

In consideration of the premium charged it is hereby understood and agreed that

Exclusion m is amended to read as follows

m for violations of any of the responsibilities obligations or duties imposed

upon fiduciaries by the Employee Retirement Income Security Act of 1974 or

amendments thereto or any similar provisions of any state local or foreign

statutory or common law ERISA with respect to any benefit plans

sponsored solely or jointly by the Organization

It

is further understood and agreed that the Insurer shall not be liable to make any

payment for Loss in connection with any Claim made against any Insured for violations

of any of the responsibilities obligations or duties imposed upon fiduciaries by the ERISA

with respect to any benefit plan not sponsored solely or jointly by the Organization

1 for discrimination based upon local state or federal law statutory or commonincluding but not limited to ERISA

2 for failure to fund the a benefit plan in accordance with ERISA or the plan

instrument or the failure to collect contributions owed to the plan

3 for plan benefits or that portion of any settlement or award in an amount

equal to such plan benefits

4 alleging arising out of based upon or attributable to any failure or omission

on the part of any Insureds to effect and maintain insurance or bonding for

plan property assets or obligations

5 for any Wrongful Act if as of May 1 2007 the Insureds as of

such date knew or could have reasonably foreseen that such Wrongful Act

could lead to a Claim

Furthermore coverage as is afforded by virtue of this endorsement shall be specifically

excess of any insurance in force including but not limited to any insurance in force for

ERISA claims suits or demands including but not limited to any administrative or

regulatory proceedings or investigations

Further if said other insurance in force as respects any such coverage is provided by the

Insurer or any member company of American International Group Inc AIG or would be

provided but for the application of the retention amount the exhaustion of the limit of

liability or the failure to submit a claim then the Limit of Liability for all Loss by virtue

of this endorsement with respect to any such claims suits or demands including but not

limited to any administrative or regulatory proceedings or investigations shall be reduced

by the limit of liability as set forth on the Declarations of such other AIG member

END 028

BRAive Copy

HIGHLY CONFIDENTIAL



companys insurance provided to such claims suits or demands including but not limited

to any administrative or regulatory proceedings or investigations



END 028

BRO ive Copy

HIGHLY CONFIDENTIAL


ENDORSEMENT 29




EXCEPTION TO POLLUTION EXCLUSION FOR SHAREHOLDER CLAIMS


Exclusion 1k of the policy shall not apply to Indemnifiable Loss arising from a Securities

Claim other than Indemnifiable Loss constituting Cleanup Costs as defined in Exclusionk provided that such Securities Claim is instigated and continued totally independent

of and totally without the solicitation of or assistance of or active participation of or

intervention of any Insured or the Organization

DEFINITIONS

For the purpose of this endorsement the following definitions are hereby added to the

policy

1 Cleanup means to test for monitor clean up remove contain treat neutralize

detoxify or assess the effects of Pollutants

2 Continuity Date meansMay 1 2007

3 Environmental Audit means the process by which a site is reviewed to determine

the presence of Pollutants in the land the atmosphere or any watercourse or bodyof water including ground water and surface water through the use of iinvestigative and other reports ii a physical inspection of the site iii interviews

with persons at the site and otherwise iv a review of the regulatory history and a

review of the prior use of the site Any audit which would fall into the category of

a Phase I Audit as that term is commonly used in the industry shall be

automatically considered an Environmental Audit for the purposes of this policy

4 Governmental Authority means any federal state or local authority agency or

body in the United States of America its territories or possessions or any political

subdivision thereof including any sovereign nation within the geographical confines

of the United States of America other than the Securities and Exchange

Commission Commodities Futures Trading Commission or any other authority which

regulates securities or commodities markets

5 Pollution Condition means the actual alleged or threatened discharge dispersal

release or escape of Pollutants into or upon or the presence of Pollutants in or

upon the land the atmosphere or any watercourse or body of water

6 Potentially Liable Party means a person or entity legally liable for Cleanup

andor Cleanup Costs

EXCLUSIONS

As respects the coverage provided by this endorsement the Insurer shall also not be

liable to make any payment for Loss in connection with any Claim made against an

Insured

1 arising as a result of liability of others for a Pollution Condition assumed by the

Organization or any Insured under any oral or written contract or agreement

unless such liability would attach to the Insured in the absence of such contract or

agreement

END 029

89421 1605 BROAive Copy Page 1 of 3

HIGHLY CONFIDENTIAL



2 alleging arising out of based upon or attributable to 1 asbestos orasbestoscontainingmaterials or 2 acid rain conditions

3 alleging arising out of based upon attributable to or in any way involving directly

or indirectly

a any Wrongful Act occurring or Pollution Condition existing prior to the

Continuity Date if as of the Continuity Date the Organization an Insured or

any Employee of the Organization with managerial responsibilities over

environmental affairs control or compliance knew or could reasonably have

foreseen that such Pollution Condition or Wrongful Act could give rise to a

Claim under this policy

b any Pollution Condition at or originating from a site any part of which on or

before the Continuity Date was listed on the United States Environmental

Protection Agencys Comprehensive Environment Response Compensation and

Liability Information System or final or proposed National Priorities List or any

similar system or list maintained by a Governmental Authority

c any Pollution Condition at or originating from a site any part of which on or

before the Continuity Date was the subject of a direction request or claim

by any Governmental Authority or any other person or entity to investigate a

Pollution Condition or for Cleanup Costs

d any Pollution Condition at or originating from a site any part of which on or

before the Continuity Date was the subject of a notification to the

Organization or any Executive or Employee thereof by a Governmental

Authority or any other person or entity that the Organization or any Insured

is or may be a Potentially Liable Party

4 for Cleanup of Pollutants or to recover Cleanup Costs or for injury from oral or

written publication of a libel or slander or of other defamatory or disparaging

material or of material that violates a persons right of privacy

5 arising out of based upon or attributable to the committing in fact by the

Organization an Organization or any Employee of the Organization with

managerial responsibilities over environmental affairs control or compliance of any

intentional knowing willful or deliberate noncompliance with any statute

regulation ordinance administrative complaint notice of violation notice letter

executive order or instruction of any Governmental Authority

6 alleging arising out of based upon or attributable to any Pollution Condition at or

originating from a site the Organization acquired whether by direct purchase or by

exercising control over after October 17 1986 and prior to the Continuity Date if

prior to such acquisition lease or commencement of exercise of control no

Environmental Audit of such site was performed by or on behalf of the

Organization or

7 alleging arising out of based upon or attributable to any Pollution Condition at or

originating from a site the Organization acquired whether by direct purchase or by

purchase of the controlling stock of another Organization leased or commenced

exercising control over after the Continuity Date if as of the date of acquisition

lease or commencement of exercise of control the Organization an Insured or any

Employee of the Organization with managerial responsibilities over environmental

affairs control or compliance knew or should have known of the existence of a

Pollution Condition existing with respect to such site provided however that this

END 029

89421 605 HROA ive Copy Page 2 of 3

HIGHLY CONFIDENTIAL



exclusion shall not apply in the event the Insurer has added such site to this

policy by written endorsement



END 029

89421 605 BRCUrive Copy Page 3 of 3

HIGHLY CONFIDENTIAL


ENDORSEMENT 30




SPOUSAL LIABILITY EXTENSION


notwithstanding any other provision of this policy including any endorsement attached

hereto whether such endorsement precedes or follows this endorsement in time or

sequence such coverage as is afforded by this policy pursuant to Clause 20 SPOUSAL

AND LEGAL REPRESENTATIVE EXTENSION to the lawful spouse of any Insured Person

under this policy shall also be extended to the legally recognized domestic partner of such

Insured Person


BRO h ve COPYEND 30UTAORIZED REPR EN ATIV EA

HIGHLY CONFIDENTIAL


ENDORSEMENT 31




AMEND PRIOR NOTICE EXCLUSION


Exclusion d is deleted in its entirety and replaced by the following

alleging arising out of based upon or attributable to the facts alleged or to the

same or related Wrongful Acts alleged or contained in any Claim which has been

reported or in any circumstances of which notice has been given under the prior

Directors and Officers policy of which this policy is a renewal or replacement or

which it may succeed in time

BROFkive CopyEND 31

HIGHLY CONFIDENTIAL


ENDORSEMENT 32




EXCESS BENEFIT EXTENSION

In consideration of the premium charged it is hereby understood and agreed that Clause 2DEFINITIONS Definition of Loss is hereby amended by adding the following to the end

thereof

Loss shall also include

i any Excess Benefits penalty assessed in the amount of 10 by the

Internal Revenue Service IRS against any Insureds for managements

involvement in the award of an Excess Benefit and the Defense Costs

attributable thereto Loss shall specifically exclude 1 any 25 penalty

assessed by the IRS against an Insured deemed to have received an Excess

Benefit 2 Defense Costs incurred to defend any Insured if it has been in

fact determined that such individual received an Excess Benefit and 3 any

200 penalty assessed by the IRS for failure to correct the award of an

Excess Benefit In all events the assessment by the IRS of a 200 penalty

against any Insured shall void ab initio all coverage afforded pursuant to this

paragraph and

ii any Selfdealing penalty assessed in the amount of 25 by the Internal

Revenue Service IRS against any Insureds for managements

involvement in an act of Selfdealing and the Defense Costs attributable

thereto Loss shall specifically exclude 1 any 5 penalty assessed by the

IRS against an Insured deemed to have participated in the act of

Selfdealing 2 Defense Costs incurred to defend any Insured if it has been

in fact determined that such individual participated in the act of Selfdealing

3 any 200 penalty assessed by the IRS on the individual for failure to

correct the Selfdealing act and 4 any 50 penalty assessed by the IRS

on the management for its refusal to agree to part or all of the corrective

measures with respect to correcting the Selfdealing act In all events the

assessment by the IRS of a 50 andor a 200 penalty against any Insured

shall void ab initio all coverage afforded pursuant to this paragraph

For purposes of this endorsement the following definitions shall apply

1 Excess Benefits means an excess benefit as defined in the Taxpayer Bill of

Rights Act 2 26 USC 4958

2 Selfdealing means an act as defined in 26 USC 4941



BROftcpve COPYEND 32

HIGHLY CONFIDENTIAL


ENDORSEMENT 33




INVESTIGATION COSTSFOR DERIVATIVE DEMANDS

In consideration of the premium charged it is hereby understood and agreed as follows

1 Clause 1 INSURING AGREEMENTS is amended to add the following new insuring

agreement

COVERAGE E INVESTIGATION COSTS FOR DERIVATIVE DEMANDS

This policy shall pay the Investigation Costs of the Organization arising from an

Investigation in response to a Derivative Demand first made upon the

Organization during the Policy Period or the Discovery Period if applicable and

reported to the Insurer pursuant to the terms of this policy

2 Clause 5 LIMIT OF LIABILITY FOR ALL LOSSINCLUDING DEFENSE COSTS is

amended to add the following

The maximum limit of the Insurers liability for Investigation Costs arising from all

Investigations combined occurring during the Policy Period or the Discovery

Period if applicable in the aggregate shall be $250000 This limit shall

be the maximum limit of the Insurer under this policy regardless of the number of

such Investigations occurring during the Policy Period or the Discovery Period if

applicable or the number of Executives subject to such Investigations Provided

however that the Investigation Costs limit shall be part of and not in addition to

the Limit of Liability stated in the Declarations of this policy which shall in all

events be the maximum liability of the Insurer for all Loss under this policy

3 There shall be no Retention amount applicable to Investigation Costs and the

Insurer shall pay such Loss from first dollar subject to the other terms conditions

and limitations of this endorsement and this policy

4 It shall be the duty of the Organization and not the duty of the Insurer to conduct

investigate and evaluate any Investigation against its own Executives provided

that the Insurer shall be entitled to effectively associate in the Investigation and in

the evaluation and negotiation of any settlement of any such Investigation

5 Nothing in this endorsement shall be construed to afford coverage under this policy

for any Claim brought by the Organization against one or more of its ownExecutives other than Investigation Costs incurred in a covered Investigation

Payment of any Investigation Costs under this policy shall not waive any of the

Insurers rights under this policy or at law

6 The Organization shall be entitled to payment of its covered Investigation Costs

90 days after 1 it has made its final decision not to bring a civil proceeding in a

court of law against any of its Executives and ii such decision has been

communicated to the Complaining Shareholders Such payment shall be subject to

an undertaking by the Organization in a form acceptable to the Insurer that the

Organization shall return to the Insurer such payment in the event any

0American International Group Inc All rights reserved

END 033

89386 307 BROive Copy Page 1 of 2

HIGHLY CONFIDENTIAL



Organization or Complaining Shareholders brings a Claim alleging arising out of

based upon or attributable to any Wrongful Acts which were the subject of the

Derivative Demand

7 Solely for the coverage extended by this endorsement under Coverage E the

following shall apply

Claim shall also mean any Derivative Demand

Complaining Shareholder means any shareholder or shareholders other than any

Insured that makes a Derivative Demand

Derivative Demand means a written demand by shareholders upon the board of

directors or equivalent management body of an Organization asking it to bring on

behalf of the Organization a civil proceeding in a court of law against any

Executive of the Organization for a Wrongful Act of such Executive in order to

obtain relief from damages arising out of such Wrongful Acts

Investigation means the investigation by the Organization or on behalf of the

Organization by its board of directors or the equivalent management body or any

committee of the board of directors or the equivalent management body as to

whether or not the Organization should bring the civil proceeding demanded in the

Derivative Demand

Investigation Costs means reasonable and necessary costs charges fees and

expenses including but not limited to attorneys fees and experts fees but not

including any settlement judgment or damages and not including any regular or

overtime wages salaries or fees of the Executives or Employees of the

Organization incurred by the Organization or its board of directors or the

equivalent management body or any committee of the board of directors or the

equivalent management body incurred solely in connection with an Investigation

Loss shall also mean Investigation Costs



American International Group Inc All rights reserved

END 033

89386 307 BROWive Copy Page 2 of 2

HIGHLY CONFIDENTIAL


ENDORSEMENT 34




FINANCIAL INSOLVENCY ADDED

In consideration of the premium charged it is hereby understood and agreed that Clause 2Definitions are amended by addition of the following to the end thereof

Financial Insolvency means the i appointment by any state or federal official

agency or court of a receiver conservator liquidator trustee rehabilitator or similar

official to take control of supervise manage or liquidate an Organization or ii the

Organization becoming a debtorinpossession pursuant to the United States

bankruptcy law and as to both i or ii the equivalent status outside the United

States

It

is further understood and agreed that Clause 13 SUBROGATION is hereby amended by

addition of the following to the end thereof

In the event that the Insurer shall for any reason pay Indemnifiable Loss on behalf of

an Insured Person or NonIndemnifiable Loss due to Financial Insolvency the Insurer

shall have the contractual right hereunder to recover from the Organization the

amount of such Loss equal to the amount of the Retention not satisfied by the

Organization and shall be subrogated to the rights of the Insured Persons hereunder

It is further understood and agreed that the definition of NonIndemnifiable Loss is deleted

and replaced with the following

NonIndemnifiable Loss means Loss for which an Organization has neither indemnified nor

is permitted or required to indemnify an Insured Person pursuant to law or contract or the

charter bylaws operating agreement or similar documents of an Organization or is unable

to indemnify an Insured Person due to Financial Insolvency


ALIT ORIZED REPR EN ATIVE

BRorFMive COPYEND34

HIGHLY CONFIDENTIAL


ENDORSEMENT 35




EXTRADITION COVERAGE22000 Version

In consideration of the premium charged it is understood

permitted by law

and agreed that where

1 Claim also means any

ab

official request for Extradition of any Insured Person or

the execution of a warrant for the arrest of an Insured Person where such

execution is an element of Extradition

2 Defense Costs also means reasonable and necessary fees costs and expensesincurred through legal counsel and consented to by the Insurer resulting from an

Insured Person lawfully

a opposing challenging resisting or defending against any request for or any

effort to obtain the Extradition of that Insured Person or

b appealing any order or other grant of Extradition of that Insured Person

3 Extradition means any formal process by which an Insured Person located in any

country is surrendered to any other country for trial or otherwise to answer any

criminal accusation

4 Clause 9 does not apply to Defense Costs solely relating to Extradition even if the

underlying Wrongful Acts relate to a Securities Claim


X

e•

4


0 2006 American International Group Inc All rights reserved

END 035

91490 806 BROive Copy Page 1 of 1

HIGHLY CONFIDENTIAL


ENDORSEMENT 36




OUTSIDE ENTITY ENDORSEMENT

In consideration of the premium charged it is hereby understood and agreed that each of

the following entities shall be deemed an Outside Entity

OUTSIDE ENTITY

1 Any notforprofit organization

2 Federal Home Loan Bank of Seattle

3 Fannie Mae National Advisory Council

4 Thrift Institutions Advisory Council of the Federal Reserve Board of

Governors

5 Mutual Travel Keystroke

6 Star Automated Switch Network

7 Integration Financial Network LLC

8 Wavelink

9 Federal Home Loan Bank of San Francisco

10 Simpson Resource Company

11 SAFECO Corporation

12 Visa


BR09 Mive CopyEND 36

HIGHLY CONFIDENTIAL


ENDORSEMENT 37




Nonrescindable Coverage


following clause shall be added to the policy

24 NONRESCINDABLE

Solely with respect to any NonIndemnifiable Loss of any Executive the Insurer

shall not be entitled under any circumstances to rescind this policy


BRof Mive CopyEND 37

•114 6•1AUT ORIZED REPR EN ATIVE

HIGHLY CONFIDENTIAL


ENDORSEMENT 38




THIS ENDORSEMENT CHANGES THE POLICY PLEASE READ IT CAREFULLY

COVERAGE TERRITORY ENDORSEMENT

Payment of loss under this policy shall only be made in full compliance with all United

States of America economic or trade sanction laws or regulations including but not

limited to sanctions laws and regulations administered and enforced by the US Treasury

Departments Office of Foreign Assets Control OFAC


END 038

89644 705 BRO ive Copy Page f of 1

HIGHLY CONFIDENTIAL


ENDORSEMENT 39




FORMS INDEX ENDORSEMENT

The contents of the Policy is comprised of the following forms

EDITION

FORM NUMBER DATE FORM TITLE

forms a part of

75010 0200 D00200 Admitted Dec

81285 0103 Tria Dec Disclosure Form

75011 0200 D00200 Admitted Policy

APPMAN 0707 SECURITIES CLAIM PANEL COUNSEL LIST Please see wwwbriefbasecom

for the current list of panel counsel firms

75013

78804

89382

MNSCPT

MNSCPT

83550

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

MNSCPT

0200

10103

05105

1103

APPENDIX B CRISISFUND

WASHINGTON CANCELLATIONNONRENEWAL ENDORSEMENT

STATE AMENDATORY INCONSISTENT

SEVERABILITY OF APPLICATION ENDORSEMENT

PROFESSIONAL EO EXCLUSION

NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT

PRIOR ACTS COVERAGESCHEDULED ENTITIES


CRISIS PLUS

CAPTIVE INSURANCE COMPANY COVERAGE

AMEND CLAUSE 6 RETENTION

CLAUSE 7a2 AMENDATORY

AMEND CLAUSE 8 DEFENSE COSTS

AMEND CLAUSE 10 DISCOVERY

AMEND CLAUSE 12 AUTOMATIC SUBSIDIARY COVERAGE

AMEND CLAUSE 13 SUBROGATION

REMOVE CLAUSE 17 ADR

AMEND CLAUSE 19 BANKRUPTCY

AMEND CLAUSE 22 ORDER OF PAYMENTS

Archive Copy78859 1001 BROKER

END 039

Page 1 of 3

HIGHLY CONFIDENTIAL


ENDORSEMENT 39






EDITION


forms a part of

MNSCPT AMEND DEFINITION Z SUBSIDIARY

MNSCPT AMEND DEFINITION OF APPLICATION

MNSCPT AMEND DEFINITION OF EXECUTIVE

MNSCPT CONDUCT EXCLUSIONS

MNSCPT SECURITIES CLAIM DEFINITION AMENDED

MNSCPT AMEND DEFINITION OF DEFENSE COSTS

MNSCPT AMEND DEFINTION OF LOSS

MNSCPT EXCLUSION j AMENDATORY ENDORSEMENT ADD 1v1 CARVEOUTS

MNSCPT Amend Exclusion 189405 0605 ERISA EXCLUSION AMENDED TO APPLY SOLELY TO COMPANY BENEFIT PLANS

89421 0605 POLLUTION EXCLUSION EXCEPTION FOR SECURITIES CLAIMS

MNSCPT SPOUSAL LIABILITY EXTENSION

MNSCPT AMEND PRIOR NOTICE EXCLUSION

MNSCPT EXCESS BENEFIT EXTENSION

89386 03107 INVESTIGATION COSTS FOR DERIVATIVE DEMANDS

MNSCPT FINANCIAL INSOLVENCY ADDED

91490 0806 EXTRADITION COVERAGE ENDORSEMENT

MNSCPT OUTSIDE ENTITY ENDORSEMENT

MNSCPT Nonrescindable Coverage

89644 0705 COVERAGE TERRITORY ENDORSEMENT OFAC

78859 1001 Forms Index Endorsement

APPMAN 0503 WASHINGTON DEREGULATION DISCLAIMER

Archive Copy78859 1001 BROKER

END 039

Page 2 of 3

HIGHLY CONFIDENTIAL


ENDORSEMENT 39






EDITION


forms a part of



Archive CopyEND 039

78859 10101 BROKER Page 3 of 3

HIGHLY CONFIDENTIAL


NOTICE TO INSUREDS

WASHINGTON DISCLAIMER

Large Commercial Property Casualty Account

Washington Statutes 28424120

This following notice is being provided in compliance with Washington Law

THE RATES AND RATING PLANS FOR THIS POLICY HAVE NOT BEEN FILED WITH OR

APPROVED BY THE WASHINGTON OFFICE OF THE INSURANCE COMMISSIONER

A PREMIUM OR RATE MAY BE QUOTED THAT IS NOT SUBJECT TO THE RATE FILING

REQUIREMENTS OF THE WASHINGTON OFFICE OF THE INSURANCE COMMISSIONER

WA Large Commercial PIC Account Disclaimer Page 1 of 1

Revised 5120cArch1ve Copy

HIGHLY CONFIDENTIAL


0

Policy Number ELU10438008

Renewal of Number NA

MANAGEMENT LIABILITY AND

COMPANY REIMBURSEMENT

INSURANCE POLICY DECLARATIONS

is

Greenwich Insurance Company

XL Specialty Insurance CompanyMembers of the XL America Companies

Executive Offices

70 Seaview Avenue

Stamford CT 069026040

Telephone 8779532636

THIS IS A CLAIMS MADE POLICY EXCEPT AS OTHERWISE PROVIDED HEREIN THIS POLICY ONLY APPLIES TO

CLAIMS FIRST MADE DURING THE POLICY PERIOD OR IF APPLICABLE THE OPTIONAL EXTENSION PERIOD

THE LIMIT OF LIABILITY AVAILABLE TO PAY DAMAGES OR SETTLEMENTS SHALL BE REDUCED AND MAY BE

EXHAUSTED BY THE PAYMENT OF DEFENSE EXPENSES THIS POLICY PROVIDES FOR THE INSURER TO

DEFEND ANY CLAIM MADE AGAINST AN INSURED EXCEPT UNDER THOSE CERTAIN SPECIFIED

CIRCUMSTANCES WHERE THE INSURED CHOOSES TO PROVIDE ITS OWN DEFENSE PLEASE READ AND

REVIEW THE POLICY CAREFULLY

Item 1 Name and Mailing Address of Parent Company

Washington Mutual Inc

1301 Second Avenue

WMC1201

Seattle WA 98101

Item 2 Policy Period From May 01 2008 To May 01 2009

At 1201 AM Standard Time at your Mailing Address Shown Above

Item 3 Limit of Liability

$25000000 Aggregate each Policy Period including Defense Expenses

Item 4 Retentions

$0 each Insured Person under INSURING AGREEMENT 1 A$50000000 each Claim under INSURING AGREEMENT I B$50000000 each Claim under INSURING AGREEMENT I C

Item 5 Optional Extension Period

Length of Optional Extension Period

Either one year or two years after the end of the Policy Period at the election of the Parent Company

Premiumfor Optional Extension Period One Year $778750000

Two Years NIA

Three Years NA

Item 6 Pending and Prior Litigation Date NA

Item 7 Notices required to be given to the Insurer must be addressed to

Executive Liability Underwriters

One Constitution Plaza 161h Floor

Hartford CT 06103

Toll Free Telephone 8779532636

JUN 0 3 2008

Marsh Seattle Finpro Dept

Valerie Surprenant

DO 70 00 11 01 Page 1 of 2

HIGHLY CONFIDENTIAL


MANAGEMENT LIAb•fTY AND COMPANY REIMBURSEMENT0JLICY DECLARATIONS

Item 8 Premium

Taxes Surcharges or Fees $000

Total Policy Premium $445000000

Item 9 Policy Forms and Endorsements Attached at Issuance

DO 71 00 09 99 XL 82 00 07 07 XL 80 24 03 03 DO 85 12 08 00 DO 83 95 11 04 DO 83 133 12 06

D0801421001 D080980202 Manuscript 8389 05 09 D0801760602 Manuscript 8388 05 08

Manuscript 8390 05 08 Manuscript 838505 08 D0804360807 D0804220707

Manuscript 8387 05 08 D083050300 D0802860804 D0804260807 XL 83 07 01 00

Manuscript 1034 02 04 D0804720508 D083330801 Manuscript 8386 05 08 Manuscript 1102 05 04

D0 80 473 05 08 D0 80 02 03 00 D0804740508 D0 80 431 08 07 D0 80 323 08 05

Countersigned ByDate Authorized Representative

THESE DECLARATIONS AND THE POLICY WITH THE ENDORSEMENTS ATTACHMENTS AND THE APPLICATION SHALL

CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE INSURER AND THE INSURED RELATING TO THIS INSURANCE

In Witness Whereof the Insurer has caused this Policy to be executed by its authorized officers but

this Policy will not be valid unless countersigned on the Declarations page if required by law by a duly

authorized representative of the Insurer

Nicholas M Brown Jr Theresa M Morgan

President Secretary



President Secretary

XL Specialty Insurance Company

DO70001101 Page2of2

HIGHLY CONFIDENTIAL


0

POLICYHOLDER DISCLOSUR

NOTICE OF TERRORISM

INSURANCE COVERAGE

Coverage for acts of terrorism is already included in your current policy You are hereby

notified that under the Terrorism Risk Insurance Program Reauthorization Extension Act

of 2007 the definition of act of terrorism has changed As defined in Section 1021 of

the Act The term act of terrorism means any act that is

certified by the Secretary of the

Treasury in concurrence with the Secretary of the State and the Attorney General of the

United Statesto be an act of terrorism to be a violent act or an act that is dangerous to

human life property or infrastructure to have resulted in damage within the United

States or outside the United States in the case of certain air carriers or vessels or the

premises of a United States mission and to have been committed by an individual or

individuals as part of an effort to coerce the civilian population of the United States or to

influence the policy or affect the conduct of the United States Government by coercion

Under your existing coverage any losses caused by certified acts of terrorism may be

partiallyreimbursed by the United States under a formula established by federal law

Under this formula the United States generally reimburses 85 of covered terrorism

losses exceeding the statutorily established deductible paid by the insurance company

providing the coverage However your policy may contain other exclusions that may

affect your coverage The Terrorism Risk Insurance Program Reauthorization Extension

Act contains a $100 billion cap that limits US Government reimbursement as well as

insurers liability for losses resulting from certified acts of terrorism when the amount of

such losses exceeds $100 billion in any one calendar year If the aggregate insured losses

for all insurers exceed $100 billion your coverage may be reduced

The portion of your annual premium that is

attributable to coverage for acts of terrorism

is $ waived Any premium waiver is only valid for the current Policy Period

IACKNOWLEDGE THAT I

HAVE BEEN NOTIFIED THAT UNDER THE TERRORISM RISK

INSURANCE PROGRAM REAUTHORIZATION EXTENSION ACT OF 2007 ANY LOSSES

CAUSED BY CERTIFIED ACTS OF TERRORISM UNDER MY POLICY COVERAGE WILL BE

PARTIALLY REIMBURSED BY THE UNITED STATES AND I HAVE BEEN NOTIFIED OF THE

AMOUNT OF MY PREMIUM ATTRIBUTABLE TO SUCH COVERAGE

Name of Insurer XL Specialty Insurance Company


Signature of Insured

Print Name and Title

Date

HIGHLY CONFIDENTIAL


IN WITNESS ENDORSEMENT

XL SPECIALTY INSURANCE COMPANY

ADMINISTRATIVE OFFICE SEAVIEW HOUSE70 SEAVIEW AVENUE

STAMFORD CT 069026040

STATUTORY HOME OFFICE 1201 NORTH MARKET STREET

SUITE 501

WILMINGTON DE 19801

It is hereby agreed and understood that the following In Witness Clause supercedes any and all other

In Witness clauses in this policy

All other provisions remain unchanged

IN WITNESS WHEREOF the Company has caused this policy to be executed and attested and if

required by state law this policy shall not be valid unless countersigned by a duly authorized

representative of the Company

John R Glancy

President

Kenneth P Meagher

Secretary

IL MP 9104 0406 XLS

HIGHLY CONFIDENTIAL


US TREASURY DEPARTMENTS OFFICE OF FOREIGN ASSETS CONTROL

OFAC

No coverage is provided by this Policyholder Notice nor can it be construed to replace any provisions

of your policy You should read your policy and review your Declarations page for complete

information on the coverages you are provided

This Policyholder Notice provides information concerning possible impact on your insurance

coverage due to directives issued by OFAC Please read this Policyholder Notice carefully

OFAC administers and enforces sanctions policy based on Presidential declarations of national

emergency OFAC has identified and listed numerous

Foreign agents

Front organizations

Terrorists

Terrorist organizations

Narcotics traffickers

as Specially Designated Nationals and Blocked Persons This list can be found on the United

States Treasurys web site httpwwwtreasgovofac

In accordance with OFAC regulations if it is determined that you or any other insured or any person

or entity claiming the benefits of this insurance has violated US sanctions law or is a Specially

Designated National and Blocked Person as identified by OFAC this insurance will be considered a

blocked or frozen contract and all provisions of this insurance will be immediately subject to OFAC

When an insurance policy is considered to be such a blocked or frozen contract neither payments

nor premium refunds may be made without authorization from OFAC Other limitations on the

premiums and payments also apply

HIGHLY CONFIDENTIAL


PRIVACY POLICY

The XL America Inc insurance group We or Our Group respects the privacy of all personal information

Thus the information We collect from our customers or potential customers is treated with the highest degree of

privacy

We have developed a Privacy Policy for Our Group that

1 ensures the security of your information and

2 complies with state and federal privacy laws

The term personal information includes all information we obtain about a customer and maintain in our files All

persons with access to personal information are required to follow this policy

Our Privacy Promise

Your privacy rights are important to us Analysis of your private information allows us to provide to you excellent

service and products Your trust in us depends upon the security and integrity of our records Thus We promise

to

1 Follow strict security standards This will protect any information you share with us or that we receive about

you

2 Verify and exchange data regarding your credit and financial status only for the purposes of underwriting

policy administration or risk management We will obtain only reputable references and services

3 Collect and use the least amount of information necessary to

a advise you and deliver excellent service and products and

b conduct our business

4 Train our employees to securely handle private information We will only permit authorized employees to

have access to such information

5 Not disclose data about you or your business to any organization outside Our Group or to third party

providers unless

a we disclose to you our intent to do so or

b we are required to do so by law

6 Not disclose medical information unless

a you give us written consent to do so or

b We disclose for any exception provided in the law

7 Attempt to keep our records complete and exact

8 Advise you how and where to access your account unless prohibited by law

9 Advise you how to correct errors or make changes to your account

10 Inspect our procedures to ensure your privacy

Collection and Sources of Information

We collect only the personal information neededto1determine suitability for a product or service

2 manage the product or service and

3 advise customers about our products and services

The information we collect comes from the following sources

Submission In the application you provide your name address phone number email address and

other types of private information

Quotes We collect information to determine

1 your eligibility for an insurance product and

2 your coverage cost

The data we collect will vary with the type of insurance you seek

Transactions We maintain records of all transactions with Our Group and our third party providers

Our records include

HIGHLY CONFIDENTIAL


1 your coverage choices

2 premiums billing and payment records

3 claims history and

4 other data related to your account

Claims We maintain records on any claims that are made under your policies The investigation of a

claim involves collection of a broad range of information It also involves many issues some of which do

not directly involve you We will share with you facts that we collect about your claim unless prohibited

by law The process of claim investigation also involves advice opinions and comments from many

people These may include attorneys and experts This will help us determine how best to handle your

claim To protect the legal and privileged aspects of opinions and advice we will not disclose this

information to you

Credit and Financial Reports We may receive your credit history This is to support information you

provided during the submission and quote processes This history will help to underwrite your coverage

Retention and Correction of Personal Information

We retain personal information only as long as required by law or as required by our business methods If we

become aware that any information may be incorrect we will make reasonable effort to correct it

Storage of Personal Information

Safeguards are in place to protect data and paper files containing personal information

SharinglDisciosina of Personal Information

We do not share personal information with a third party outside of Our Group for marketing purposes This is true

unless such sharing is permitted by law Information may be shared with a third party for necessary servicing of

the product It may also be disclosed for other business reasons as permitted by law

We do not share personal data outside of Our Group for servicing or joint marketing reasons We will only

disclose such data when a contract containing nondisclosure language has been signed by us and the third

party

Unless a consumer consents we do not disclose consumer credit report type information outside of Our Group

Consumer credit report type information means such things as net worth credit worthiness hobbies piloting

boating etc solvency etc

We also do not disclose outside of Our Group personal information for use in marketing We may share

information within Our Group regarding our experience and dealings with the customer

We may disclose private information about a customer as allowed or otherwise required by law The law allows

us to share a customers financial data within Our Group for marketing purposes The law does not allow

customers to limit or prevent such disclosures

We may also disclose personal information about you or your business to

your independent agent or broker

an independent claim adjuster investigator attorney or expert

persons or groups that conduct scientific studies This includes actuaries and accountants

a medical care facility or professional to verify coverage for a covered person

an insurance support group

another insurer if to prevent fraud

another insurer to properly underwrite a risk

insurance regulators

governmental authorities pursuant to law

an authority in response to a valid administrative or judicial order This includes a warrant or subpoena

a party for the following purposes regarding a book of business sale transfer merger or consolidation

This applies whether the transaction is proposed or complete

HIGHLY CONFIDENTIAL


a professional peer review group This includes reviewing the service or conduct of medical care facilities

or personnel

a covered person for providing the status of a transaction or

any of the following a lienholder mortgagee assignee lessor or other person of record having a legal

interest in the policy

Policy for Personal Information Relating to Nonpublic Personal Health Information

We do not disclose nonpublic personal health information about a customer unless consent is obtained from that

customer However such consent shall not be prohibited limited or sought for certain insurance functions This

includes but is not limited to

a claims administration

b fraud prevention

c underwriting policy placement or issuance loss control or auditing

Access to Your Information

The following persons will have access to personal information we collect

employees of Our Group and third party service providers Information will only be collected as is needed in

transactions with you

Violation of the Privac Policy

Any person violating this Policy will be subject to discipline This may include termination

For questions regarding this privacy statement please contact your broker

HIGHLY CONFIDENTIAL


iii travel costs incurred by any director officer member of the Board of Managers

employee or agent of the Company or the Emergency Firm

in connection with an Emergency and incurred during the pendency of of within 90 days

immediately prior to and in anticipation of an Emergency for which the Company is

legally liable

f Emergency Services means those services performed by an Emergency Firm in

advising the Company or a director officer or employee of the Company on minimizing

potential harm to the Company from an Emergency including but not limited to

maintaining and restoring investor confidence in the Company Additionally solely with

respect to a Delisting Emergency Emergency Services will include any legal services

performed by an Emergency Firm in responding to such Delisting Emergency

4 The term Loss as defined in Section II Definitions M of the Policy shall include Emergency

Loss

5

6

7

The maximum aggregate limit of liability for all Emergency Loss resulting from all Emergencies

occurring during the Policy Period shall be $50000 Emergency Sublimit which amount is part

of and not in addition to the maximum aggregate Limit of Liability of the Insurer under this Policy

as set forth in Item 3 of the Declarations

Additionally with respect only to Delisting Emergencies occurring during the Policy Period solely

in

the event that the Emergency Sublimit is exhausted by the payment of Emergency Loss an

additional limit of liability of $25000 shall be available for all Emergency Loss resulting from all

Delisting Emergencies occurring during the Policy Period which amount is part of and not in

addition to the maximum aggregate Limit of Liability of the Insurer under this Policy as set forth in

Item 3 of the Declarations

As a condition precedent to any right to payment under this Policy with respect to any Emergency

the Insured shall give written notice to the Insurer of an Emergency as soon as practicable after

the Emergency commences but in no event later than the Policy Period or the Optional Extension

Period if applicable All notices must be sent by certified mail or the equivalent to the address set

forth in Item 7 of the Declarations Attention Claim Department

All other terms conditions and limitations of this Policy shall remain unchanged

DO 80 98 02 02 Page 3 of 3

HIGHLY CONFIDENTIAL


Endorsement No 8 Effective May 01 2008

Named Insured Washington Mutual inc 1201 AM Standard Time

Manuscript 8389 05 08

Policy No ELU10438008 insurer XL Specialty Insurance Company

AMEND LOSS DEFINITION ENDORSEMENT

In consideration of the premium charged Section II Definition M of the Policy is amended to read in its entirety as

follows

`Loss means damages settlements judgments including prepost judgment interest on a covered judgment

Defense Expenses and Emergency Loss however Loss other than Defense Expenses shall not include

1 civil or criminal fines or penalties

2 taxes

3 punitive or exemplary damages

4 the multiplied portion of any multiplied damages award

5 any amounts for which an Insured is not financially liable or which are without legal recourse to an

Insured and

6 matters which may be deemed uninsurable under the law pursuant to which this Policy shall be

construed

Notwithstanding the foregoing approach Loss shall specially include

a civil penalties assessed against any Insured Person pursuant to Section 2g2C of the Foreign

Corrupt Practices Act 15 USG 78dd2g2C and

b punitive exemplary and multiplied damages imposed upon an Insured

Enforceability of these subparagraphs a and b shall be governed by such applicable law that most favors

coverage for such penalties and punitive exemplary and multiple damages

In the event of a Claim alleging that the price or consideration paid or proposed to be paid for the acquisition or

completion of the acquisition of all or substantially all the ownership interest in or assets of an entity is

inadequate Loss with respect to such Claim shall not include any amount of any judgment or settlement

representing the amount by which such price or consideration is effectively increased provided that this

paragraph shall not apply to Defense Expenses or to any Loss in connection with any Claim to which Insuring

Agreement A applies


Manuscript 8389 05 08 Page 1 of 1

HIGHLY CONFIDENTIAL


Endorsement No 9 0 Effective May 0110800 80 176 06 02

Named Insured Washington Mutual Inc 1201 AM Standard Time

Policy No EL1J10438008 Insurer XL Specialty Insurance Company

AMEND DEFINITION OF SECURITIES CLAIM

ENDORSEMENT

In consideration of the premium charged Section 11 Definitions Q of the Policy is amended to read in its entirety

as follows

Q Securities Claim means a Claim other than an administrative or regulatory proceeding against or

investigation of a Company made against any Insured

1 for a violation of any federal state local regulation statute or rule regulating securities

including but not limited to the purchase or sale of or offer to purchase or sell securities

which is

a brought by any person or entity based upon arising out of directly or indirectly

resulting from in consequence of or in any way involving the purchase or sale of

or offer to purchase or sell securities of the Company or

b brought by a security holder of a Company with respect to such security holders

interest in securities of such Company or

2 brought derivatively on behalf of the Company by a security holder of such Company

Notwithstanding the foregoing the term Securities Claim shall include an administrative or regulatory

proceeding against a Company but only if and only during the time that such proceeding is also

commenced and continuouslymaintained against an Insured Person


DO 80 176 06 02Page 1 of 1

HIGHLY CONFIDENTIAL


Endorsement No 10

0Effective May 01

20010Manuscript 8388 05 08


Policy No ELU10438008 Insurer XL Specialty Insurance Company

GENERAL EO EXCLUSION

In consideration of the premium charged

1 No coverage will be available under this Policy for Loss from Claims based upon arising out of directly or

indirectly resulting from in consequence of or in any way involving any actual or alleged act error omission

misstatement misleading statement or breach of duty in connection with the rendering of or actual or alleged

failure to render any services for others for a fee or commission or on any other compensated basis by any

person or entity otherwise entitled to coverage under this Policy

2 Paragraph 1 above is not intended however nor shall it be construed to apply to

a Loss resulting from any Securities Claim brought by a security holder of the Company or from a

derivative action brought by or on behalf of or in the name or right of the Company if such Securities

Claim or derivative action is brought and maintained independently of and without the solicitation

assistance participation or intervention of any Insured or

b Defense Expenses which the Insurer is liable to pay on behalf of the Insured Persons under insuring

Agreement A of the Policy



HIGHLY CONFIDENTIAL


0 0Manuscript 8390 05 08

Endorsement No 11

Named Insured Washington Mutual Inc

Policy No ELU10438008

Effective May 01 2008

1201 AM Standard Time

Insurer XL Specialty Insurance Company

PRIOR ACTS COVERAGE SCHEDULED ENTITIES

ENDORSEMENT

In consideration of the premium charged it is hereby understood and agreed that the term Subsidiary as defined in

Section II Definitions of the Policy is amended to include the entities set forth below

Entities

Columbia Federal Savings Bank and Shoreline

Savings Bank and their Subsidiaries

Old Stone Bank and Subsidiaries

Frontier Federal Savings Association and

Subsidiaries

Williamsburg Federal Savings Bank and

Subsidiaries

Vancouver Federal Savings Bank and

Subsidiaries

Crossland Savings FSB and Subsidiaries

Sound Savings and Loan Association and

Subsidiaries

World Savings and Loan Association and

Subsidiaries

Great Northwest Bank and Subsidiaries

Pioneer Savings Bank and Subsidiaries

Pacific First Bank A Federal Savings Bank and

Subsidiaries

DIME BANCORP INC and Subsidiaries

Far West Federal Savings Bank and

Subsidiaries

Summit Savings Bank and Subsidiaries

Olympic Bank A Federal Savings Bank and

Subsidiaries

Enterprises Bank and Subsidiaries

Western Bank and Subsidiaries


AcquisitionCreation Date

April 29 1988

June 01 1990

June 30 1990

September 14 1990

July 31 1991

November 08 1991

January 01 1992

March 06 1992

April 01 1992

March 01 1993

April 09 1993

August 04 1993

April 15 1994

November 14 1994

April 28 1995

August 31 1995

January 31 1996

Page 1 of 2

HIGHLY CONFIDENTIAL


Utah Federal Savings Bank and Subsies

United Western Financial Group and

Subsidiaries

Industrial Bank and Subsidiaries

Long Beach Financial Corporation and

Subsidiaries

Alta Residential Mortgage Trust and

Subsidiaries

Mortgage Operations of The PNC Financial

Services Group and Subsidiaries

Bank United Corp and Subsidiaries

November 30 1996

January 15 1997

December 31 1998

October 01 1999

February 01 2000

January 31 2001

February 09 2001

iit is

further understood and agreed that solely with respect to the entities set forth above the coverage afforded by this

Policy shall apply to Wrongful Acts committed or allegedly committed a on before and after the AcquisitionCreation

Date set for above and b prior to the effective date that such Subsidiary ceases to be a Subsidiary


Manuscript 8390 05 08Page 2 of 2

HIGHLY CONFIDENTIAL


0 0Manuscript 8385 05 08





ENDORSEMENT

In consideration of the premium charged it is hereby understood and agreed that with respect to the entities set forth

below upon the expiration date of each entitys respective runoff policy as set forth opposite such entitys name this

Policy shall provide primary directors and officers coverage for any Claim arising from any Wrongful Act committed

prior to the prior acts date set forth with such entity

Entit

American Savings Bank FAand its subsidiaries

HF Ahmanson Co and its

subsidiaries

Great Western Financial Corp

and its subsidiaries

Providian Financial Corporation

and its subsidiaries

Runoff Expiration Date Prior Acts Date

December 20 2001 December 20 1995

October 01 2004 October 01 1998

July 01 2003 July 01 1997

October 01 2011 October 01 2005

Provided that if

XL SpecialtyInsurance Company is not the primary directors and officers insurance carrier for the

Parent Company at the time of the expiration of each policy listed above then this Endorsement shall be null and void



HIGHLY CONFIDENTIAL


DO 80 436 08 07




AMEND NOTICE OF CLAIM ENDORSEMENT

in consideration of the premium charged Section V1 General Conditions A1 of the Policy is amended to read in its

entirety as follows

1 As a condition precedent to any right to payment under this Policy with respect to any Claim the Insured shall

give written notice to the Insurer of any Claim as soon as practicable after it is first made and the General

Counsel and Risk Manager of the Parent Company first becomes aware of such Claim but in no event later

than Sixty 60 days after the expiration of the PolicyPeriod


DO 80 436 08 07 Page 1 of 1

HIGHLY CONFIDENTIAL


D0 80 422 07 07




AMEND SECTION VI A2 ENDORSEMENT

In consideration of the premium charged Section VI General Conditions A2 of the Policy is amended to read in its

entirety as follows

2 If during the Policy Period the Insured shall become aware of any circumstances which may reasonably be

expected to give rise to a Claim being made against an Insured and shall give written notice to the Insurer of

the circumstances the Wrongful Act Company Wrongful Act or Employment Practices Wrongful Act

allegations anticipated and the reasons for anticipating such a Claim with full particulars as to dates persons

and entities involved then a Claim which is subsequently made against such Insured and reported to the

Insurer alleging arising out of based upon or attributable to such circumstances or alleging any Wrongful Act

Company Wrongful Act or Employment Practices Wrongful Act which is the same or related to any Wrongful

Act Company Wrongful Act or Employment Practices Wrongful Act alleged or contained in such

circumstances shall be considered made at the time such notice of such circumstances was given


D© 80 422 07 07 Page 1 of 1

HIGHLY CONFIDENTIAL






PRIORITY OF PAYMENTS ENDORSEMENT

In consideration of the premium charged it is

understood and agreed that if Loss including Defense Expenses shall

be payable under more than one of the Insuring Agreements of this Policy then the Insurer shall to the maximum

extent practicable and subject at all times to the Insurers maximum aggregate Limit of Liability as set forth in Item 3 of

the Declarations pay such Loss as follows

1 first the Insurer shall pay that Loss if any which the Insurer may be liable to pay on behalf of the Insured

Persons under Insuring Agreement A2 second the Insurer shall pay that Loss if any which the Insurer may be liable to pay on behalf of the

Company under Insuring Agreement B and

3 third the Insurer shall make such other payments which the Insurer may be liable to make under Insuring

Agreement C or otherwise

In the event the Insurer withholds payment pursuant to paragraphs 2 andor 3 above at the written request of the

chief executive officer of the Parent Company then the Insurer shall at such time and in such manner as shall be set

forth in such written instructions of the chief executive officer of the Parent Company remit such payment to a

Company or directly to or on behalf of an Insured Person

The bankruptcy or insolvency of any Company or any Insured Person shall not relieve the Insurer of any of its

obligations to prioritize payment of covered Loss under this Policy pursuant to this Endorsement



HIGHLY CONFIDENTIAL


Endorsement No 160

Effective May 00008DO 83 05 03 00



ERISA EXCLUSION

In consideration of the premium charged Section

III Exclusions C is

deleted and replaced by the following

C based upon arising out of directly or indirectly resulting from in consequence of or in any way

involving any actual or alleged violation of the Employee Retirement Income Security Act of 1974

ERISA as amended or any regulation promulgated thereunder or any similar federal state or

local law or regulation in connection with any pension profit sharing or employee benefit program

established in whole or in part for the benefit of the directors officers or employees of the

Company


DO83050300 Page1 of1

HIGHLY CONFIDENTIAL


Endorsement No 17Effective May 0108

DO 80 286 08 04


Insurer

A M Standard

Specialty Insurance CompanyPolicy No ELU10438008

DOMESTIC PARTNER ENDORSEMENT

In consideration of the premium charged Section 11 Definition J5 of the Policy shall include the domestic

partnerof any person set forth in Section 1

1 Definition J1 J4 but only to the extent the domestic partner is

a party to any Claim solely in their capacity as a domestic partner to such persons and only for the purposes of

any Claim seeking damages recoverable from community property property jointly held by any such person and

domestic partner or property transferred from any such person to the domestic partner


DO 80 286 08 04Page 1 of I

HIGHLY CONFIDENTIAL


DO 80 426 08 07

Endorsement No 18Effective May 01 2008


Insurer

1201 AM Standard

dSpecialty Insurance CompanyPolicy No ELU10438008

EXTRADITION COSTS ENDORSEMENT

In consideration of the premium charged

1 For the purposes of this endorsement the follow terms shall have the meanings set forth below

a Extradition Proceeding means an extradition proceeding commenced against any Insured Person

pursuant to the United Kingdom Extradition Act 2003 or the equivalent in any jurisdiction Extradition

Act which shall be deemed first commenced upon receipt by an Insured Person of a formal notice of

an intention to bring such proceeding

b Extradition Costs means only such Defense Expenses constituting

i costs incurred in appealing an order for extradition pursuant to an Extradition Act whether in

connection with such proceeding or a separate proceeding and

ii the reasonable premium for any appeal bail attachment or similar bond or financial

instrument incurred by or on behalf of such Insured Person by reason of an Extradition

Proceeding provided that the Insurer shall have no obligation to apply for or provide any

collateral for any such bond or financial instrument

2 The term Claim as defined in Section II Definitions of the Policy will include any Extradition Proceeding

provided that no coverage shall be available under this Policy for any Loss other than Extradition Costs

incurred in

connection with any Extradition Proceeding

3 The maximum aggregate limit of liability of the Insurer under this Policy for all Extradition Proceedings is

$25000000 which amount is part of and not in addition to the maximum aggregate Limit of Liability of this

Policy as set forth in Item 3 of the Declarations


DO 80 426 08 07Page 1 of 1

HIGHLY CONFIDENTIAL


®Endorsement No 19 Effective May 008

XL 83 07 01 00



SPECIFIED CLAIMS EXCLUSION

In consideration of the premium charged no coverage will be available under this Policy for Loss including

Defense Expenses in connection with any proceeding set forth below or in connection with any Claim based on

arising out of directly or indirectly resulting from in consequence of or in any way involving any such proceeding

or any fact circumstance or situation underlying or alleged therein

1 South Ferry LP 2 v Killinger et a No CV041599C WD Wa Filed Jul 19 2004 the South Ferry

Action

2 Lee Family Investments by and through its Trustee WB Lee v Kilinger at a No CV052121 C WDWa Filed Nov 29 2005 the Lee Family Action

3 Koesterer v Washington Mutual Inc eta No 07CIV9801 SDNY Filed Nov 5 2007

4 Abrams v Washington Mutual Inc at al No 07CIV9806 SDNY Filed Nov 5 2007

5 Nelson v Washington Mutual Inc at a No C071809 WD Wa Filed Nov 7 2007

6 Garber v Washington Mutual Inc et al No SD NY Filed Dec 20 2007

7 Sneva v Killinger at al No C071826 WD Wa Filed Nov 13 2007

8 Harrison v Killinger et al No C071827 WD Wa Filed Nov 13 2007

9 Catholic Medical Mission v Killinger at al No 072365486S EA Wa Super Ct Filed Nov 16 2007

10 Slater v Killinger et a No C080005 WD Wa Filed Jan 3 2008

11 Procida v Killinger et al No 08Civ0565 SDNY Filed Jan 18 2008

12 Ryan v Killinger at a C080095 WD Wa Filed Jan 18 2008

13 Breene v Killinger et aL No 072410422SEA Wa Super Ct Filed Dec 28 2007

14 Gibb v Killinger at a No 072410449SEA Wa Super Ct Filed Dec 28 2007

15 Spears v Washington Mutual Inc eta No C0800868HRL ND Cal Filed Feb 8 2008

16 ADELE BRODY Derivatively on Behalf of WASHINGTON MUTUAL INC Plaintiff vs FIRST AMERICAN

CORPORATION FIRST AMERICAN EAPPRAISEIT KERRY K KILLINGER THOMAS W CASEY DEBORA D

HORVATH STEPHEN J ROTELLA JAMES B CORCORAN DARYL D DAVID AFLRED R BROOKS DAVID

C SCHNEIDER TODD H BAKER FAY L CHAPMAN JOHN F WOODS RONALD J CATHCART PHILLIP D

MATTHEWS ANNE V FARRELL WILLIAM G REED JR MICHAEL K MURPHY JAMES H STEVER

STEPHEN E FRANK MARY E PUGH MARGARET OSMER MCQUADE CHARLES M LILLIS ORINC

SMITH THOMAS C LEPPERT and REGINA T MONTOYA Defendants and WASHINGTON MUTUAL INC a

Washington Corporation

XL 83 07 01 00Page 1 of 2

HIGHLY CONFIDENTIAL


17 ALAN HENRY as Trustee of the Alan Henry Family Trust Derivatively on Behalf of WASHINGTON

MUTUAL INC Plaintiff vs KERRY K KILLINGER STEPHEN ROTELLA THOMAS W CASEY JAMES

B CORCORAN JOHN F WOODS ANNE V FARRELL STEPHEN E FRANK THOMAS C LEPPERT

CHARLES M LILLIS PHILLIP D MATTHEWS REGINA T MONTOYA MICHAEL K MURPHY MARY

E PUGH WILLIAM G REED JR ORIN C SMITH JAMES H STEVER WILLIS B WOOD JR and

DAVID C SCHNEIDER Defendants and WASHINGTON MUTUAL INC

18 GOOD HILL PARTNERS LP ON BEHALF OF GOOD HILL MASTER FUND LP Plaintiff against WM

ASSET HOLDINGS CORP CI 2007 WM2 WM ASSET HOLDINGS CO 2007 WM2 LLC WM ASSET

HOLDINGS CORP WAMU ASSET ACCEPTANCE CORP WAMU CAPITAL CORP WASHINGTON

MUTUAL BANK and WASHINGTON MUTUAL INC

19 PLAINTIFF JOSEPH PROCIDAS MOTION TO CONSOLIDATE RELATED ACTIONS TO APPOINT

LEAD DERIVATIVE PLAINTIFF AND DESIGNATE LEAD COUNSEL

20 RS BASSMAN Derivatively on Behalf of FREDDIE MAC aka Federal Home Loan Mortgage

Corporationand its shareholders Plaintiff v RICHARD F SYRON PATRICIA L COOK ANTHONY S

PISZEL EUGENE M McQUADE RICHARD KARL GOELTZ STEPHEN A ROSS SHAUN F

OMALLEY ROBERT R GLAUBER BARBARA T ALEXANDER WILLIAM M LEWIS JR JEFFREY M

PEEK GEOFFREY T BOISI RONALD F POE WASHINGTON MUTUAL INC

PRICEWATERHOUSECOOPERS LLP KERRY K KILLINGER et al

21 MICHAEL BLOMQUIST MICHAEL SCOTT PROPERTIES INC Plaintiffs vs WASHINGTON

MUTUAL a Washington corporation KERRY K KILLINGER JOSEPH W SAUNDERS et al

XL 83070100Page 2of2

HIGHLY CONFIDENTIAL






INSURING AGREEMENT A ENDORSEMENT

In consideration of the premium charged solely with respect to Claims made under Section I Insuring Agreements Aof the Policy the Insurer may not void andor rescind this Policy



HIGHLY CONFIDENTIAL


D© 80 472 05 08


TimeardNamed Insured Washington Mutual Inc

i

01 AM Stand

No ELU10438008 Specialty Company

BANKRUPTCY ENDORSEMENT

in consideration of the premium charged it is understood and agreed that the bankruptcy or insolvency of any

Company or any insured Person shall not relieve the Insurer of any of its obligationshereunder

It

is further understood and agreed that the coverage provided under this Policy is

intended to protect and benefit the

Insured Persons Further if a liquidation or reorganization proceeding is commenced by the Parent Company andor

any other Company whether voluntary or involuntary under Title 11 of the United States Code as amended or any

similar state local or foreignlaw collectively Bankruptcy Law then in regard to a covered Claim under this Policy

the insureds and the insurer hereby agree not to oppose or object to any efforts by any insured Person to obtain relief

from any stay or injunction applicableto the proceeds of this Policy as a result of the commencement of such

liquidationor reorganization proceeding


DO 80 472 05 08Page 1 of 1

HIGHLY CONFIDENTIAL


Endorsement No 22 Effective May 0008DO 83 33 08 01

TimeNamed Insured Washington Mutual Inc

jsure X

AM Standard

Insurance CompanyPolicy No ELU10438008 Specialty

AMEND EXCLUSION F ENDORSEMENT

In consideration of the premium charged Section

III Exclusions F of the Policy is amended to read in its entirety

as follows

F brought about or contributed to in fact by any

1 intentionally dishonest fraudulent or criminal act or omission or any willful violation of any

statute rule or law or

2 profit or remuneration gained by any Insured to which such Insured is not legally entitled

as determined by a final adjudication


DO 83330801Pagel oft

HIGHLY CONFIDENTIAL




ITimeNamed Insured Washington Mutual Inc•

201 A M Standard

nsurance CompanyPolicy No ELU10438008

AMEND CONDITION IVA ENDORSEMENT

In

consideration of the premium charged Section IV Limit of Liability Indemnification and Retentions A of the Policy

is

amended to read in its entirety as follows

A The insurer shall pay the amount of Loss in excess of the applicable Retentions set forth in item 4 of the

Declarations up to the Limit of Liability set forth in Item 3 of the Declarations The Retentions set forth in Item

4 of the Declarations shall be borne by the Company andor the Insured Person and remain uninsured with

the exception of the Side A Excess DIC Policy as defined below

The Insurer shall recognize that any Loss in connection with any Claim to which Insuring Agreement Bapplies that is paid by the following policy or those policies specifically designated as excess over it or any

renewal or replacement thereof shall contribute to and shall reduce the Retention Amount applicable to such

covered Loss as stated in Item 4 of the Declarations

InsurerInsured Policy No Policy Period

Columbia Casualty Washington Mutual Inc 287127641 May 01 2008 to

CompanyMay 01 2009

collectively all such policiesthe Side A Excess DIC Policy

As a preconditionto such recognition of the erosion of the Retention amount the Parent Company shall

providethe Insurer with written proof to the Insurers satisfaction that payment of such Loss has been made

under the Side A Excess DIG Policy



HIGHLY CONFIDENTIAL




Named Insured Washington Mutual inc 1201 AM Standard Time


CLARIFICATION ENDORSEMENT

In consideration of the premium charged in the event that there is an inconsistency between a state amendatory

attached to this Policy and any term or condition of this Policy then it is understood and agreed that where permitted

by law the Insurer shall apply those terms and conditions of either the state amendatory or the Policy which are more

favorable to the Insured



HIGHLY CONFIDENTIAL


DO 80 473 05 08


Named Insured Washington Mutual IncIn1201

AMsurer

Standard


AMEND CONDITION G2 ENDORSEMENT

In consideration of the premium charged Section VI General Conditions G2 of the Policy is amended to read in its

entirety as follows

2 In the event of any payment under this Policy the Insurer shall be subrogated to the extent of such payment to

all of each and every Companys and Insured Persons rights of recovery thereof and each such Company

and Insured Person shall execute all papers required and shall do everything that may be necessary to secure

such rights including the execution of any and all documents necessary to enable the Insurer to effectively

bring suit in the name of each such Company and each such Insured Person Solely with respect to any

payment by the Insurer in connection with any Claim to which Insuring Agreement A applies in no event

however shall the Insurer exercise its rights of subrogation against an Insured Person under this Policy unless

such insured Person has been convicted of any deliberate criminal or deliberate fraudulent act by such Insured

if any final adjudicationestablishes that such deliberate criminal or deliberate fraudulent act was committed or

to the gaining of any profit or advantage to which any final adjudication establishes that the Insured Person

was not legally entitled thereto


DO 80 473 05 08Page 1 of 1

HIGHLY CONFIDENTIAL


Endorsement No 26 Effective May 01108

d W hin ton Mutual Inc 1201 AM Standard Times g

D0 80 02 03 00

Named Insure a


AMEND DEFINITION OF INSURED PERSON

In

consideration of the premium charged the term Insured Person shall include those individuals holding the

following positions for the Company

Risk Manager

General Counsel

Trustees

All other terms conditions and limitations of this policy shall remain unchanged

DO 80 02 03 00Page 1 of 1

HIGHLY CONFIDENTIAL


DO 80 474 05 08



Insurer

1201 AM Standard

dyITimensurance CompanyPolicy No ELU10438008

OUTSIDE ENTITY ENDORSEMENT

In

consideration of the premium charged

1 The term Non Profit Entity as defined in Section 11 Definitions of the Policy is amended to include the

following entityies Specified ODL Entityies

1 Any notforprofit organization

2 Federal Home Loan Bank of Seattle

3 Fannie Mae National Advisory Council

4 Thrift Institutions Advisory Council of the Federal Reserve Board of Governors

5 Mutual Travel Keystroke

6 Star Automated Switch Network

7 IntegrationFinancial Network LLC

8 Wavelink

9 Federal Home Loan Bank of San Francisco

10 Simpson Resource Company

11 SAFECO Corporation

12 Visa

2 If any Claim made against any Insured gives rise to coverage both under this Policy and under any other

policyies for management liability and company reimbursement directors and officers liability or other similar

insurance available to any Specified ODL Entity and issued by the Insurer or an affiliated company of the

Insurer collectivelythe Insurer the maximum aggregate limit of liability under all such other policies for all

Loss including Defense Expenses in respect of such Claim shall not exceed the largest single available limit

of liability under either such policies including this Policy

3 Nothing in this Endorsement is intended nor shall it be construed to obligate or require the Insurer to pay

Loss includingDefense Expenses under this Policy in respect of such Claim in any amount exceeding the

available Limit of Liability under this Policy


DO 80 474 05 08Page 1 of I

HIGHLY CONFIDENTIAL


DO 80 431 08 07


Named Insured Washington Mutual Inc 1201 AM Standard


SPECIFIC REQUEST ENDORSEMENT

in consideration of the premium charged

1 Section 11 Definition J3 and 4 of the Policy are amended to read in their entirety as follows

3 an individual identified in J1 above who at the specific request of Company is serving as a

director officer trustee regent or governor of a NonProfit Entity

4 any individual identified in J1 above who at the specific request of the Company is serving in an

elected or appointed position having fiduciary supervisory or managerial duties and responsibilities

comparable to those of an Insured Person of the Company regardless of the name or title by which

such position is designated of a Joint Venture or

2 Section II Definition S2 and 3 of the Policy are amended to read in their entirety as follows

°2 Insured Person of the Company who at the specific request of the Company is serving as a director

officer trustee regent or governor of a NonProfit Entity

3 Insured Person of the Company who at the specific request of the Company is serving in an elected

or appointed position having fiduciary supervisory or managerial duties and responsibilities


such position is designated of a Joint Venture


DO 80 431 08 07Page 1 of t

HIGHLY CONFIDENTIAL


Endorsement No 29 Effective May 008DO 80 323 08 05



AMEND REPRESENTATION ENDORSEMENT

In consideration of the premium charged Section VI General Conditions I of the Policy is amended to read in its

entirety as follows

I The Insured represents that the statements and particulars contained in the Application as well as

any prior applicationsubmitted to the Insurer are true accurate and complete and agree that this

Policy is issued in reliance on the truth of that representation and that such particulars and

statements which are deemed to be incorporated into and constitute a part of this Policy form the

basis of this Policy No knowledge or information possessed by any Insured Person will be

imputed to any other Insured Person With respect to Claims made under Insuring Agreement Conly no knowledge or information possessed by any Insured other than General Counsel and

Risk Manager of the Company will be imputed to the Company In the event that any of the

particularsor statements in the Application are untrue this Policy will be void with respect to any

Insured who knew of such untruth


DO 80 323 08 05Page 1 of I

HIGHLY CONFIDENTIAL


9 0Endorsement No 30 Effective May 01 2008



DELETE AN ENDORSEMENT

In consideration of the premium charged Endorsement Nos 4 and 15 are deleted

All other terms conditions and limitations of this policy shall remain unchanged

XL 80060400

Xt 80 06 04 00 Page 1 of 1

HIGHLY CONFIDENTIAL


DO 83 95 11 04




AMEND INSURED V INSURED EXCLUSION

In consideration of the premium charged Section III Exclusions G of the Policy is amended to read in its entirety as

follows

G by on behalf of or at the direction of the Company or Insured Person except and to the extent such Claim

i is brought by a security holder of the Company who when such Claim is made and maintained is

acting independently of and without the active solicitation assistance participation or intervention of

an Insured Person or the Company

ii is brought by the Bankruptcy Trustee or Examiner of the Company or any assignee of such Trustee or

Examiner any Receiver Conservator Rehabilitator or Liquidator or comparable authority of the

Company

iii is in the form of a crossclaim third party claim or other claim for contribution or indemnity by an

Insured Person which is part of or results directly from a Claim which is not otherwise excluded by the

terms of this Policy

iv is an Employment Practices Claim

v is brought and maintained in a noncommon law jurisdiction outside the United States of America

including its territories and possessions

vi is brought and maintained by an Insured Person

a who has not served as a director officer member of the Board of Managers or employee of

the Company for at least Two 2 years prior to the date such Claim is first made and

b who is acting independently of and without the solicitation assistance participation or

intervention of an Insured Person or the Company or

is brought by an employee of the Company pursuant to any federal or state whistleblower protection

statute or any rule or regulation promulgated thereunder


DO 83 95 11 04 Page 1 of 1

HIGHLY CONFIDENTIAL






PRIORITY OF PAYMENTS ENDORSEMENT

In consideration of the premium charged it is understood and agreed that if Loss including Defense Expenses shall

be payable under more than one of the Insuring Agreements of this Policy then the Insurer shall to the maximum

extent practicable and subject at all times to the Insurers maximum aggregate Limit of Liability as set forth in Item 3 of

the Declarations pay such Loss as follows

1 first the Insurer shall pay that Loss if any which the Insurer may be liable to pay on behalf of the Insured

Persons under Insuring Agreement A2 second the Insurer shall pay that Loss if any which the Insurer may be liable to pay on behalf of the

Company under Insuring Agreement B and

3 third the Insurer shall make such other payments which the Insurer may be liable to make under Insuring

Agreement C or otherwise

In the event the Insurer withholds payment pursuant to paragraphs 2 andor 3 above then the Insurer shall at such

time and in such manner as shall be set forth in such written instructions of a majority of the Board of Directors of the

Parent Company remit such payment to a Company or directly to or on behalf of an Insured Person

The bankruptcy or insolvency of any Company or any Insured Person shall not relieve the insurer of any of its

obligations to prioritize payment of covered Loss under this Policy pursuant to this Endorsement



Page 1 of 1

HIGHLY CONFIDENTIAL


MANAGEMENT LIABILITY

DO 71 00 09 99

MANAGEMENT LIABILITY AND COMPANY REIMBURSEMENT

INSURANCE COVERAGE FORM

THIS IS A CLAIMS MADE POLICY WITH DEFENSE EXPENSES INCLUDED IN THE LIMIT OF LIABILITY PLEASE

READ AND REVIEW THE POLICY CAREFULLY

In consideration of the payment of the premium and in reliance on all statements made and information

furnished to Executive Liability Underwriters the Underwriting Manager for the Insurer identified in the

Declarations hereinafter the Insurer including the Application and subject to all of the terms conditions and

limitations of all of the provisions of this Policy the Insurer the Insured Persons and the Company agree as

follows


A The Insurer shall pay on behalf of the Insured Persons Loss resulting from a Claim first made against the

Insured Persons during the Policy Period or if applicable the Optional Extension Period for a Wrongful Act

or Employment Practices Wrongful Act except for Loss which the Company is permitted or required to pay

on behalf of the Insured Persons as indemnification

B The Insurer shall pay on behalf of the Company Loss which the Company is required or permitted to pay as

indemnification to any of the Insured Persons resulting from a Claim first made against the Insured Persons

during the Policy Period or if applicable the Optional Extension Period for a Wrongful Act or Employment

Practices Wrongful Act

C The Insurer shall pay on behalf of the Company Loss resulting solely from any Securities Claim first made

against the Company during the Policy Period or if applicable the Optional Extension Period for a Company

Wrongful Act

II DEFINITIONS

A Application means

1 the application attached to and forming part of this Policy and

2 any materials submitted therewith which shall be retained on file by the Insurer and shall be deemed

to be physically attached to this Policy

B Change In Control means

1 the merger or acquisition of the Parent Company or of all or substantially all of its assets by another

entity such that the Parent Company is not the surviving entity

2 the acquisition by any person entity or affiliated group of persons or entities of the right to vote select

or appoint more than fifty percent 50 of the directors of the Parent Company or

3 the appointment of a Receiver Conservator Liquidator Trustee Rehabilitator or any comparable

authority with respect to the Parent Company

C Claim means

1 j a written demand for monetary or nonmonetary relief

2 any civil proceeding in a court of law or equity or arbitration

1O 71 00 09 99 Page 1 of 11

HIGHLY CONFIDENTIAL



DO 71 00 09 99

3 any criminal proceeding which is commenced by the return of an indictment and

4 a formal civil criminal administrative regulatory proceeding or formal investigation of an Insured

Person or the Company but with respect to the Company only for a Company Wrongful Act whichis commenced by the filing or issuance of a notice of charges formal investigative order or similar

document identifying in writing such Insured Person or the Company as a person or entity against

whom a proceeding as described in C2 or 3 above may be commenced including any proceeding

before the Equal Employment Opportunity Commission or any similar federal state or local

governmental body having jurisdiction over any Employment Practices Wrongful Act

D Company means the Parent Company and any Subsidiary created or acquired on or before the Inception

Date set forth in ITEM 2 of the Declarations or during the Policy Period subject to GENERAL CONDITIONS

VI DE Company Wrongful Act means any actual or alleged act error omission misstatement misleading

statement or breach of duty by the Company in connection with a Securities Claim

F Defense Expenses means reasonable legal fees and expenses incurred in the defense of any Claim

including the premium for an appeal bond attachment bond or similar bond but will not include applying for or

furnishing such bond Defense Expenses will not include the Companys overhead expenses or any salaries

wages fees or benefits of its directors officers or employees

G Employment Practices Wrongful Act means any actual or alleged

wrongful termination of employment whether actual or constructive

employment discrimination of any kind including violation of any federal state or local law involving

employment or discrimination in employment which would deprive or potentially deprive any person of

employment opportunities or otherwise adversely affect his or her status as an employee because of

such persons race color religion age sex national origin disability pregnancy or other protected

status

sexual or other harassment in the workplace or

wrongful deprivation of career opportunity employment related misrepresentations retaliatory

treatment against an employee of the Company failure to promote demotion wrongful discipline or

evaluation or refusal to hire

H Employment Practices Claim means a Claim alleging an Employment Practices Wrongful Act

I insured means the Insured Persons and the Company

J Insured Person means

1 any past present or future director or officer or member of the Board of Managers of the Company

and those persons serving in a functionally equivalent role for the Parent Company or any Subsidiary

operating or incorporated outside the United States

2 any past present or future employee of the Company to the extent any Claim is a Securities Claim

3 an individual identified in J1 above who at the specific written request of the Company is serving

as a director officer trustee regent or governor of a NonProfit Entity

4 any individual identified in J1 above who at the specific written request of the Company is serving

in an elected or appointed position having fiduciary supervisory or managerial duties and

responsibilities comparable to those of an Insured Person of the Company regardless of the name or

title by which such position is designated of a Joint Venture or

2 of 11PageDO 7100 09 99

HIGHLY CONFIDENTIAL



DO 71 00 09 99

5 the lawful spouse of any person set forth in the above provisions of this definition but only to the extent

the spouse is a party to any Claim solely in their capacity as a spouse of such persons and only for the

purposes of any Claim seeking damages recoverable from marital community property property jointly

held by any such person and spouse or property transferred from any such person to the spouse

In the event of the death incapacity or bankruptcy of an individual identified in J1 2 3 4 or 5 above

any Claim against the estate heirs legal representatives or assigns of such individual for a Wrongful Act or

Employment Practices Wrongful Act of such individual will be deemed to be a Claim against such individual

K Interrelated Wrongful Acts means any Wrongful Act Company Wrongful Act or Employment Practices

Wrongful Act based on arising out of directly or indirectly resulting from in consequence of or in any way

involving any of the same or related facts series of related facts circumstances situations transactions or

events

L Joint Venture means any corporation partnership joint venture association or other entity other than a

Subsidiary during any time in which the Parent Company either directly or through one or more

Subsidiarys

1

M

owns or controls at least thirty three percent 33 but not more thanfifty percent 50 in the

aggregate of the outstanding securities or other interests representing the right to vote for the election

or appointment of those persons of such an entity occupying elected or appointed positions having

fiduciary supervisory or managerial duties and responsibilities comparable to those of an Insured

Person of the Company regardless of the name or title by which such position is designated of a

Joint Venture or

2 has the right by contract ownership of securities or otherwise to elect appoint or designate at least

thirty three 33 of those persons described in L1 above

Loss means damages judgments settlements or other amounts including punitive or exemplary damages

where insurable by law and Defense Expenses in excess of the Retention that the Insured is legally obligated

to pay Loss will not include

the multiplied portion of any damage award

fines penalties or taxes imposed by law or

matters which are uninsurable under the law pursuant to which this Policy is construed

NOTE With respect to judgments in which punitive damages are awarded the coverage provided by this

Policy shall apply to the broadest extent permitted by law

If based on the written opinion of counsel for the

Insured punitive damages are insurable under applicable law the Insurer will not dispute the written opinion of

counsel for the Insured

N NonProfit Entity means a corporation or organization other than the Company which is exempt from

taxation under Section 501c3 4 and 10 of the Internal Revenue Code as amended or any rule or

regulation promulgated thereunder

0P

Parent Company means the entity named in ITEM 1 of the Declarations

Policy Period means the period from the Inception Date to the Expiration Date set forth in ITEM 2 of the

Declarations or to any earlier cancellation date

D© 71 00 09 99 Page 3 of 11

HIGHLY CONFIDENTIAL



DO 71 00 09 99

Q Securities Claimmeans a Claim made against an Insured for

1 any actual or alleged violation of the Securities Act of 1933 as amended the Securities Exchange Act

of 1934 as amended any similar federal or state statute or any rules or regulations promulgated

thereunder or

2 any actual or alleged act error omission misstatement misleading statement or breach of duty arising

from or in connection with the purchase or sale of or offer to purchase or sell any securities issued by

the Company whether such purchase sale or offer involves a transaction with the Company or

occurs in the open market

R Subsidiary means any entity during any time in which the Parent Company owns directly or through one or

more Subsidiarys more than fifty percent 50 of the outstanding securities representing the right to vote

for the election of such entitys directors

S Wrongful Act means any actual or alleged act error omission misstatement misleading statement neglect

or breach of duty by any Insured Person while acting in his or her capacity as an

1 Insured Person of the Company or a person serving in a functionally equivalent role for the Parent

Company or any Subsidiary

2 Insured Person of the Company who at the specific written request of the Company is serving as a

director officer trustee regent or governor of a NonProfit Entity or

3 Insured Person of the Company who at the specific written request of the Company is serving in an

elected or appointed position having fiduciary supervisory or managerial duties and responsibilities


such position is designated of a Joint Venture

Ill EXCLUSIONS

The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against an Insured

Person or with respect to INSURING AGREEMENT C the Company

A for any actual or alleged bodily injury sickness mental anguish emotional distress libel slander oral or

written publication of defamatory or disparaging material disease or death of any person or damage or

destruction of any tangible property including loss of use thereof however this EXCLUSION A will not apply

to any allegations of libel slander defamation mental anguish or emotional distress if and only to the extent

that such allegations are made as part of an Employment Practices Claim for an Employment Practices

Wrongful Act

B for any actual alleged or threatened discharge dispersal release escape seepage transportation emission

treatment removal or disposal of pollutants contaminants or waste of any kind including but not limited to

nuclear material or nuclear waste or any actual or alleged direction request or voluntary decision to test for

abate monitor clean up recycle remove recondition reclaim contain treat detoxify or neutralize pollutants

contaminants or waste of any kind including but not limited to nuclear material or nuclear waste With respect

to a Claim made under INSURING AGREEMENT A only this EXCLUSION B will not apply to a Claim

unless a court of competent jurisdiction specifically determines the Company is

not permitted to indemnify the

Insured Person

NOTE EXCLUSIONS A and B above will not apply with respect to a Securities Claim brought by a

security holder of the Company or a derivative action brought by or on behalf of or in the name or right of the

Company and brought and maintained independently of and without the solicitation assistance participation

or intervention of an Insured

DO 71 00 09 99Page 4 of 11

HIGHLY CONFIDENTIAL



DO 71 00 09 99

C based upon arising out of directly or indirectly resulting from in consequence of or in any way involving anyactual or alleged violation of the Employee Retirement Income Security Act of 1974 ERISA as amended or

any regulations promulgated thereunder or any similar law federal state or local law or regulation

D based upon arising out of directly or indirectly resulting from in consequence of or in any way involving anyfact circumstance situation transaction event or Wrongful Act Company Wrongful Act or EmploymentPractices Wrongful Act underlying or alleged in any prior andor pending litigation or administrative or

regulatory proceeding or arbitration which was brought prior to the Pending and Prior Litigation Date set forth in

ITEM 6 of the Declarations

E based upon arising out of directly or indirectly resulting from in consequence of or in any way involving any

fact circumstance situation transaction event or Wrongful Act Company Wrongful Act or EmploymentPractices Wrongful Act which before the Inception Date of this Policy was the subject of any notice given

under any other Management Liability policy Directors and Officers liability policy or similar policy

F brought about or contributed to in fact by any

1 intentionally dishonest fraudulent or criminal act or omission or any willful violation of any statute rule

or law or

2 profit or remuneration gained by any Insured to which such Insured is not legally entitled

as determined by a final adjudication in the underlying action or in a separate action or proceeding

G by on behalf of or at the direction of the Company except and to the extent such Claim

1 is brought derivatively by a security holder of the Company who when such Claim is made and

maintained is acting independently of and without the solicitation assistance participation or


2 is brought by the Bankruptcy Trustee or Examiner of the Company or any assignee of such Trustee or

Examiner or any Receiver Conservator Rehabilitator or Liquidator or comparable authority of the

Company

H by on behalf of at the direction of or in the name or right of any NonProfit Entity or Joint Venture against

an Insured Person for a Wrongful Act or Employment Practices Wrongful Act while acting in his or her

capacity as a director officer trustee regent or governor of such or persons occupying elected or appointed

positions having fiduciary supervisory or managerial duties and responsibilities comparable to those of an

Insured Person of the Company regardless of the name or title by which such position is designated or

I based upon arising out of directly or indirectly resulting from in consequence of or in any way involving an

Insured Person acting in their capacity as a Insured Person of any entity other than the Company NonProfit Entity or Joint Venture

No conduct of any Insured Person will be imputed to any other Insured to determine the application of any of the

above EXCLUSIONS

IV LIMIT OF LIABILITY INDEMNIFICATION AND RETENTIONS

A The Insurer shall pay the amount of Loss in excess of the applicable Retentions set forth

in ITEM 4 of the

Declarations up to the Limit of Liability set forth in ITEM 3 of the Declarations

B The amount set forth in ITEM 3

of the Declarations shall be the maximum aggregate Limit of Liability of the

Insurer under this Policy Payment of Loss including Defense Expenses by the Insurer shall reduce the Limit

of Liability

DO71000999 Page SoflI

HIGHLY CONFIDENTIAL



DO 71 00 09 99

C With respect to the Companys indemnification of its Insured Persons the certificate of incorporation charter

bylaws articles of association or other organizationaldocuments of the Parent Company each Subsidiary

and each NonProfit Entity or Joint Venture will be deemed to provideindemnification to the Insured

Persons to the fullest extent permitted by law

D The Retention applicable to INSURING AGREEMENT B shall apply to any Loss as to which indemnification

by the Company NonProfit Entity or Joint Venture is legally permissiblewhether or not actual

indemnification is made unless such indemnification is not made by the Company NonProfit Entity or Joint

Venture solely by reason of its financial insolvency In the event of financial insolvency the Retentions

applicableto INSURING AGREEMENT A shall apply

E If different retentions are applicable to different parts of any Loss the applicable Retentions will be applied

separately to each part of such Loss and the sum of such Retentions will not exceed the largest applicable

Retention set forth in ITEM 4 of the Declarations

F Notwithstanding the foregoing solely with respect to a Securities Claim no Retention shall apply to such

Claim and the Insurer will reimburse those Defense Expenses incurred by the Insured if

1 the Securities Claim is dismissed or there is a stipulation to dismiss the Securities Claim with or

without prejudice and without the payment of any monetary consideration by the Insured

2 there is a final judgment of no liability obtained prior to or during trial in

favor of the Insured by reason

of a motion to dismiss or a motion for summaryjudgment after the exhaustion of all appeals or

3 there is a final judgment of no liabilityobtained after trial in favor of the Insured after the exhaustion

of all appeals

Any reimbursement in the case of F1 2 or 3 above will only occur if ninety 90 days after the date of

dismissal stipulationfinal judgment of no liability is obtained and only if

a the same Securities Claim or a Securities Claim containing Interrelated Wrongful Acts is

not brought again within that time and

b the Insured provides the Insurer with an Undertaking in a form acceptable to the Insurer that

such reimbursement of the applicable Retentions will be paid back to the Insurer in the event

the Securities Claim or a Securities Claim containing Interrelated Wrongful Acts is

brought after the ninety 90 day period

V DEFENSE SETTLEMENT AND ALLOCATION OF LOSS

A It shall be the duty of the Insured and not the duty of the Insurer to defend any Claim under this Policy

B No Insured may incur any Defense Expenses or admit liability for make any settlement offer with respect to

or settle any Claim without the Insurers consent such consent not to be unreasonably withheld

C Upon the written request of an Insured the Insurer will advance Defense Expenses on a current basis in

excess of the applicable Retention if any before the disposition of the Claim for which this policy provides

coverage As a condition of the advancement of Defense Expenses the Insurer may require a written

undertaking in a form satisfactory to the Insurer which will guarantee the repayment of any Loss including

Defense Expenses paid to or on behalf of the Insured if it is finallydetermined that the Loss incurred is not

covered under this

PolicyD

If both Loss covered by this Policy and Loss not covered by this Policy are incurred either because a Claim

made againstthe Insured contains both covered and uncovered matters or because a Claim is made against

both the Insured and others including the Company for Claims other than Securities Claims not insured

Page 6 of 11

DO71000999

HIGHLY CONFIDENTIAL



DO 71 00 09 99

E

under this Policy the Insured and the insurer will use their best efforts to determine a fair and appropriate

allocation of Loss between that portion of Loss that is covered under this Policy and that portion of Loss thatis not covered under this Policy Additionally the Insured and the Insurer agree that in determining a fair and

appropriate allocation of Loss the parties will take into account the relative legal and financial exposures of

and relative benefits obtained in connection with the defense andor settlement of the Claim by the Insured

and others

In the event that an agreement cannot be reached between the insurer and the Insured as to an allocation of

Loss as described in D above then the Insurer shall advance that portion of Loss which the Insured and

the Insurer agree is not in dispute until a final amount is agreed upon or determined pursuant to the provisions

of this Policy and applicable law

VI GENERAL CONDITIONS

A NOTICE

1 As a condition precedent to any right to payment under this Policy with respect to any Claim the

Insured shall give written notice to the Insurer of any Claim as soon as practicable after it is first

made

2 If during the Policy Period the Insured first becomes aware of a specific Wrongful Act Company

Wrongful Act or Employment Practices Wrongful Act and

if during the Policy Period the Insured

a provides the Insurer with written notice of the specific Wrongful Act Company Wrongful Act

or Employment Practices Wrongful Act the consequences which have resulted or may

result therefrom including but not limited to actual or potential damages the identities of the

potential claimants the circumstances by which the Insured first became aware of such

Wrongful Act Company Wrongful Act or Employment Practices Wrongful Act and

3

b requests coverage under this Policy for any subsequently resulting Claim for such Wrongful

Act Company Wrongful Act or Employment Practices Wrongful Act

then any Claim subsequently made arising out of such Wrongful Act Company Wrongful Act or

Employment Practices Wrongful Act will be treated as if it had been first made during the Policy

Period

All notices under GENERAL CONDITIONS A1 and 2 must be sent by certified mail or the

equivalent to the address set forth in ITEM 7 of the Declarations Attention Claim Department

B INTERRELATED CLAIMS

All Claims arising from the same Interrelated Wrongful Acts shall be deemed to constitute a single Claim

and shall be deemed to have been made at the earliest of the time at which the earliest such Claim is made or

deemed to have been made pursuant to GENERAL CONDITIONS A1 above or GENERAL CONDITIONS

A2 if applicable

C OTHER INSURANCE AND SERVICE IN CONNECTION WITH NONPROFIT ENTITIES AND JOINT

VENTURES

1 All Loss payable under this Policy will be specifically excess of and will not contribute with any other

insurance including but not limited to any insurance under which there is a duty to defend unless such

other insurance is specifically excess of this Policy This Policy will not be subject to the terms of any

other insurance policy

D0 71 00 09 99 Page 7 of 11

HIGHLY CONFIDENTIAL



DO 71 00 09 99

D

2 All coverage under this Policy for Loss from Claims made againstthe Insured Persons while acting

in

their capacity as a director officer trustee regent or governorof a NonProfit Entity or persons

occupying elected or appointed positions having fiduciary supervisory or managerial duties and

responsibilities comparable to those of the Insured Persons of the Company regardless of the name

or title by which such position is designated of a Joint Venture will be specifically excess of and will

not contribute with any other insurance or indemnification available to such Insured Person from such

NonProfit Entity or Joint Venture by reason of their service as such

MERGERS AND ACQUISITIONS CHANGES IN EXPOSURE OR CONTROL

1 If during the Policy Period the Company acquires any assets acquires a Subsidiary or acquires

any entity by merger consolidation or otherwise or assumes any liability of another entity coverage

shall be provided for any Loss involving a Claim for a Wrongful Act Company Wrongful Act or

Employment Practices Wrongful Act occurring after the consummation of the transaction

2 If however by reason of the transaction or series of transactions described in D1 above the

entity assets Subsidiary or liabilities so acquired or so assumed exceed thirty five percent 35 of

the total assets or liabilities of the Company as represented in

the Companys most recent audited

consolidated financial statements coverage under this Policy shall be provided for a period of ninety

90 days for any Loss involving a Claim for a Wrongful Act Company Wrongful Act or

Employment Practices Wrongful Act that occurred after the transaction has been consummated

Coverage beyond the ninety 90 day period will be provided only if

a the Insurer receives written notice containing full details of the transactions and

b the Insurer at its sole discretion agrees to provide such additional coverage upon such terms

conditions limitations and additional premium that it deems appropriate

3 With respectto the acquisition assumption merger consolidation or otherwise of any entity asset

Subsidiary or liability as described in D1 and 2 above there will be no coverage available under

this Policy for Claims made against the acquired assumed merged or consolidated entity asset

Subsidiary liability or Insured Person for a Wrongful Act Company Wrongful Act or Employment

Practices Wrongful Act committed any time during which such entity asset liability or Subsidiary is

not an Insured

4 If during the Policy Period any entity ceases to be a Subsidiary the coverage provided under this

Policy shall continue to apply to the Insured Persons who because of their service with such

Subsidiary were covered under this Policy but only with respect to a Claim for a Wrongful Act

Company Wrongful Act or Employment Practices Wrongful Act that occurred or allegedly occurred

prior to the time such Subsidiary ceased to be a Subsidiary of the Company

5 If during the Policy Period there is a Change In Control the coverage provided under this Policy

shall continue to apply but only with respect to a Claim against an Insured for a Wrongful Act

Company Wrongful Act or Employment Practices Wrongful Act committed or allegedly committed

up to the time of the Change In Control and

a coverage will cease with respect to any Claim for a Wrongful Act Company Wrongful Act or

Employment Practices Wrongful Act committed subsequent to the Change In Control and

b the entire premium for the Policy will be deemed to be fully earned immediately upon the

consummation of a Change In Control

Page 8 of 11DO71000999

HIGHLY CONFIDENTIAL


0 MANAGEMENT LIABILITY

DO 71 00 09 99

E CANCELLATION AND RENEWAL OF COVERAGE

1 Except for the nonpayment of premium as set forth in E2 below the Parent Company has the

exclusive right to cancel this Policy Cancellation may be effected by mailing to the Insurer written

notice when such cancellation shall be effective provided the date of cancellation is not later than the

Expiration Date set forth in ITEM 2 of the Declarations In such event the Insurer shall retain the

customary short rate portion of the earned premium Return or tender of the unearned premium is not

a condition of cancellation

2 The Insurer may only cancel this Policy for nonpayment of premium The Insurer will provide not less

than twenty 20 days written notice stating the reason for cancellation and when the Policy will be

canceled Notice of cancellation will be sent to the Parent Company and the agent of record for the

Insured if applicable

3 The Insurer is under no obligation to renew this Policy upon its expiration Once the Insurer chooses to

nonrenew this Policy the Insurer will deliver or mail to the Parent Company written notice stating

such at least sixty 60 days before the Expiration Date set forth in ITEM 2 of the Declarations

F OPTIONAL EXTENSION PERIOD

1 If either the Parent Company or the Insurer does not renew this Policy the Parent Company shall

have the right upon payment of an additional premium set forth in ITEM 5 of the Declarations to an

extension of the coverage provided by this Policy with respect only to any Claim first made during the

period of time set forth in ITEM 5 of the Declarations after the Policy Expiration Date but only with

respect to a Wrongful Act Company Wrongful Act or Employment Practices Wrongful Act

occurring prior to the Policy Expiration Date

2 As a condition precedent to the right to purchase the Optional Extension Period the total premium for

this Policy must have been paid in full The right of the Parent Company to purchase the Optional

Extension Period will be immediately terminated if the Insurer does not receive written notice by the

Parent Company advising it wishes to purchase the Optional Extension Period together with full

payment of the premium for the Optional Extension Period within thirty 30 days after the Policy

Expiration Date

3 If the Parent Company elects to purchase the Optional Extension Period as set forth in F1 and 2

above the entire premium for the Optional Extension Period will be deemed to be fully earned at the

Inception Date for the Optional Extension Period

4 The purchase of the Optional Extension Period will not in any way increase the Limit Of Liability set

forth in ITEM 3 of the Declarations and the Limit of Liability with respect to Claims made during the

Optional Extension Period shall be part of and not in addition to the Limit of Liability for all Claims

made during the Policy Period

G ASSISTANCE COOPERATION AND SUBROGATION

1 The Insured agrees to provide the Insurer with all information assistance and cooperation that the

Insurer may reasonably request and further agree that they will do nothing which in any way increases

the Insurers exposure under this Policy or in any way prejudices the Insurers potential or actual rights

of recovery

2 In the event of any payment under this Policy the Insurer shall be subrogated to all of the potential or

actual rights of recovery of the Insured The Insured shall execute all papers required and will do

everything necessary to secure such rights including but not limited to the execution of such

documents as are necessary to enable the Insurer to effectively bring suit in their name and will

provide all other assistance and cooperation which the Insurer may reasonably require

DO 71 00 09 99 Page 9 of 11

HIGHLY CONFIDENTIAL



DO 71 00 09 99

H EXHAUSTION

If the Insurers Limit of Liability as set forth in ITEM 3 of the Declarations is exhausted by the payment of Loss

the premium as set forth in ITEM 8 of the Declarations will be fully earned all obligations of the Insurer under

this Policy will be completely fulfilled and exhausted and the Insurer will have no further obligations of any kind

whatsoever under this Policy

1

J

REPRESENTATION CLAUSE

The Insured represents that the statements and particulars contained in the Application as well as any prior

application submitted to the Insurer are true accurate and complete and agree that this Policy is issued in

reliance on the truth of that representation and that such particulars and statements which are deemed to be

incorporated into and constitute a part of this Policy are material to the risk assumed and form the basis of this

Policy No knowledge or information possessed by any Insured will be imputed to any other Insured except

for material facts or information known to the persons who signed the Application In the event that any of

the particulars or statements in the Application are untrue this Policy will be void with respect to any Insured

who knew of such untruth or to whom such knowledge is imputed

ACTION AGAINST THE INSURER ASSIGNMENT AND CHANGES TO THE POLICY

1 No action may be taken against the Insurer unless as a condition precedent thereto

a

b

there has been full compliance with all of the terms and conditions of this Policy and

the amount of the obligation of the Insured has been finally determined either by judgment

against the Insured after actual trial or by written agreement of the Insured the claimant and

the Insurer

2 Nothing contained herein shall give any person or entity any right to join the Insurer as a party to any

Claim against the Insurer to determine their liability nor may the Insured implead the Insurer in any

Claim

3 Assignment of interest under this Policy shall not bind the Insurer unless its consent is endorsed

hereon

4 Notice to any agent or knowledge possessed by any agent or other person acting on behalf of the

Insurer will not cause a waiver or change in any part of this Policy or prevent the Insurer from asserting

any right under the terms conditions and limitations of this Policy The terms conditions and limitations

may only be waived or changed by written endorsement

K AUTHORIZATION AND NOTICES

It is understood and agreed that the Parent Company will act on behalf of the Company and the Insured

Persons with respect to

the payment of the premiums

the receiving of any return premiums that may become due under this Policy

the giving of

all notices to the Insurer as provided herein and

the receiving of all notices from the Insurer

D07100 09 99 Page 10 of 11

HIGHLY CONFIDENTIAL



DO 71 00 09 99

L ENTIRE AGREEMENT

The Insured agrees that the Declarations Policy including the endorsements attachments and the

Application shall constitute the entire agreement between the Insurer or any of its agents and the Insured

relating to this insurance

D© 7100 09 99 Page 11 of 11

HIGHLY CONFIDENTIAL


(L) ENTIRE AGREEMENT

MANAGEMENT LIABILITY 0071000999

The Insured agrees that the Declarations, Policy, including the endorsements, attachments and the Application shall constitute the entire agreement between the Insurer or any of its agents and the Insured relating to this insurance.

DO 71 0009 99 Page 11 of 11

HIGHLY CONFIDENTIAL

Scottsdale Indemnity Company A STOCK COMPANY

Homo Oae Nationwide Plaza • Columbus, Ohio 43215 Administrative Officil: 8877 North Gainey Center Drive • Scottsdale, Arizona 85258

1-800-423-7675

EXCESS INSURANCE POLICY

UNLESS OTHERWISE PROVIDED IN THE FOLLOWED POLICY, THIS POLICY APPLIES ONLY TO CLAIMS FIRST MADE AGAINST TI IE INSURED DURING THE POLICY PERIOD OR EXTENDED REPORTING PERIOD. THE LIMIT OF LIABILITY SHALL 131:1i REDUCED BY PAYMENT OF DEFENSE COSTS.

DECLARATIONS

Item 1 Named ;:1-11N !:.:r -:11TD , . Policy No.: H)000039 Insured & " , , IA: R i Agent No.: 01 _

Mailing ,T'LE, '!'ii-101 I Renewal No.: :,IF;:./ Address: —1

Item 2 Aggregate Limit of Liability: $ 0,0 0 0, '2 1 10 all Claims (inclusive of Defense Costs)

Item 3 Policy Period: 05/01/7' '.i. " to 05/01/2009 12:01 A.M. local time at Named Insured's Mailing Address

, Item 4 Followed Policy:

Issuing Insure'. , :— ' .''' ' Limit of Liability : -,, , .rc Policy No.: 287127641 Deductible(s)/Retention(s): N/A

|^a 5 Schedule of Underlying Policies:Dechictible(a)1

IssuincLInsurer Policy No. Limits of Liability Retbsntion(s)

Primary . .: ELU1O1:' - $25,000,000 $0/ •".; , nn0,000/

Policy: $50, occ, 000

Underlying Excess Policies: Issuina Insurer POilGi No. Lroits of Liability Attachment

1 sI Excess ,70RM LIT1-358 (12-07)

2' d Excess 3 th Excess 41h Excess oh s., Excess 6 th Excess 7 th Excess ,,, ___. Ei th Excess

Item 6 Premium: $ Terrorism Premium: $ Total Premium: $ _

m 7 Endorsements Effective at Inception: SEE SC.i-IE,L 05 FORMS AND ENDORSEMENTS

Item 8 Notices to Company Notice of Claim to: Other Notices to: .., . - -;[;;',1.,' I ' 11TY COMPANY ' ' • v ' • II'," - CO:.!PANY

'; 7,7D R- .) _ :La SUITE 33A 7 ;A.••:_,T,T,D . .,_ ... : : !'F. '' _ 33A

Nu'..! '1. _,_ ')07 NEW YORK, NY 10001 ,

These Declarat ons/Policy, together with the Application and any written endorsements attached thereto, shall constitute the contract between the Insured Persons and the Company.

XMLON (8-07)

Restricted For Use in Connection with Plan Confirmation Only WMI PC 000701359829.00001

a5258

"-"""-""----""" """"""""""""-"---""- ""-""-" """--""-"-"--""-""""""""-""""-"-----

1

hassettm

REDACTED

hassettm

REDACTED

hassettm

REDACTED

ADDITIONAL FORMS

7

Iii 0

I ;1 P01 I: 1 . 4 .1:1113

‘1,‘; 1 1 In,.:.e r 17 i.

LCi

. .

8 1 9 2 Ci

HIGHLY CONFIDENTIAL

Policytlo:

1't11(...! I lideilltItlit\i/&n1-1p Iy

W.D1113 .-. OF FORIVIS AND ENIDOW-3E1V0.-:NITS

N1011,1') Effective Date 0E, 12:01 A,M,, :il:ii.jard 1 Inci

Named Insur,-1 TM('

Agent No. 31407

INSURED a


H

•

0

HIGHLY CONFIDENTIAL

Scow,c ale Indemnity Company iunie OffiGe:

Cile Nationwide riaza Columbus, Ohio 43215 Oitir;e:

3877 North Gainey Centc;r Drive • Scottsdale, Arizonp 1-800-423-7675

A STOCK COMPANY

In Witness Whereof, the Company has caused this policy to be executed and at _ ed.

Secretary President

The information contained herein replaces any similar information contained elsewhere in !tin poiicy,

ri-covp6 NSIJREL)


H

In

in

HIGHLY CONFIDENTIAL

Scotidale.npany A Stoi;lc Insiira Conip;iiiy. Conipany

I-:XCESS INSURANCE POLICY

UNLESS OTHERVVISE PROVIDED IN THE FOLLOWED POLICY, THIS POLICY APPLIES ONLY TO CLAIMS FIRST MADE AGAINST Till: INSUi T;L:D DURING THE POLICY PERIOD OR EXTENDED REPORTING PERIOD. THE LIMIT OF LIARILITY lALL 13E REDUCED AND MAY BE EXHAHSHED BY PAYMENT OF DEFENSE COSTS.

imnsideratieil tile payment of ni p preinilini arid reknit-1J upon the statements ie the Application, which is made at:Art henJefrtivi subject to I Po Conlarafinen, ',onus :aid tondilsais or this Policy, h J ii ci-imoney indicated in th,, 8"n^ o "the Company) the Insured agree follows:

I. INSURING AGREEMENT

Tno Company provide the Insureds: with insurance coverage excess of the Underlying Policies. This Policy is sub-ject to tha line representations J-it, itre contained in the applications for the Underlying Policies and, en j j i pt with

respect to the premium, the of liability and as otherwise provided be.rein, the insurance coverage pftivirILJd hy this Policy J:inall ;ipply in accordance with the same terms, definitions, conditions, exclusions and limitations as are contnined in the Followed Policy and, to the extent coverage is further limited or restricted thereby, in any other of the Underlying Policies. dills Policy shall not grant broader coverage than the most restrietive of the Underlying Policies.

U. DEFINITIONS

Application means all signed applications and any information submitted therewith for this poUuy.

B. Claim has the same meaning in this Policy as in the Followed Policy.

C. Insured means any persons or entities entitled to coverage under the Followed Policy.

D. Named Insured means the entity named in Item 1. of the Declarations.

E. Policy Period means the period from the ni J,..tive date to the expiration date of this P y as set forth in Ite of the Declarations, or any earlier termination &Jt,e,

F. Followed Policy means the policy, as constituted at its inception, named in Item 4. of the Declarations.

G. Underlying Policies mean all policies, as constituted at their inception, listed in Item 5. of the Declarations,

H. Underlying Limits means an amount equal to the total of all aggregate limits of liability for all Underlying Policies, plus the uninsured retention or deductible applicable to the primary policy named in Item 5. of the Declarations.

N. LIMIT OF LIABILITY

The amount stated in Item 2. of the Declarations shall be the maximum amount payable by the Company under this Pol-icy with respect to all Claims first made during the Policy Period.

N. REDUCTION OR EXHAUSTION OF UNDERLYING LIMITS

A. In the event the Underlying Limits are partially reduced by reason of actual payment by the insurers of the Underly-ing Policies, then subject to the Limit of Liability this Policy shall continue to apply as excess over the reduced Underlying Limits.

B. In the it the Underlying Limits we wholly exhausted by reason of actual payment by the insurers of the Under-Pnlirins (and the Insured has pid the full amount of any applicable deductible or uninsured retention under

the l''-.)110,!! n H Policy), then subject to the Limit of Liability this Policy shall continue to apply as primary insurance;

Xr, (8 07)

Page 1 of 2

-INSURED


H

INSURANCE POLICY

I.

II. DEFINITIONS

A,

Policy.

in 3.

F.

G.

LIMIT OF LIABiliTY

IV, OF UNDERLYING

in

HIGHLY CONFIDENTIAL

provided that this Policy shall only pay ex-i of such applicable deductible or, pmn8on. which shall be applied to ary L;!),14u f,:ot Claim in the same manner ns f;pecified in the Followed Policy.

C. This Policy shall oniy pay in the event of the reduction or istien of the Underlying Policies by reason of actual payment by the insurers of the Underlying Limits as cie;criiied atave and shall not drop down for any other reason, including but not limited to existence of any sub-limit in any li!iderlying Policy or the uncollectibility (in whole or in i:, :irt) cf. any of the Underlying Limits; provided, however, this Policy will recognize erosion of any of the Underlying

dne to the existence of a sub-limit.

The Insureds expressly retain the risk of any gap in coverage or uncollectibility and the Company does not in any way insure or assume such risk.

V. CONDITIONS OF COVERAGE

A. As a condition precedent to this Policy's coverage, the Insureds agree to maintain the Underlying Policies in full effect with solvent insurers during the Policy Period except for any reduction or exhaustion of the Underlying Limits y reason of actual payments thereunder. If the Underlying Policies are not so maintained, the Company shall

rot he liable under this Policy to a greater extent than it would have been had such Underlying Policies been maintained:

B. ; a condition precedent to this Policy's coverage, the Insureds shall notify the Company in writing of any of the fol-lowing events as soon as practicable thereafter, with full particulars:

(1) the reduction or exhaustion of any of the Underlying Limits;

(2) the cancellation or termination of, or failure to maintain in full effect, any of the Underlying Policies;

(3) any change to any of the Underlying Policies; or

(4) i Le insurer of any of the Underlying Policies becoming subject to a receivership, li ui ation, dissolution, re-1 or similar proceeding or being ti-lkeit over by any regulatory authority.

C. It du , ,rj the Policy Period or any discovery or extended reporting period, any terms of any of the Underlying Pol-icies are changed in any manner, this Policy shall not ho subject to such change unless the Company consents to such change by written endorsement to this Policy. Unless the Company so consents to such change, the Com-pany shall not be liable to a greater extent than it would have been absent such change to any of the Underlying Policies.

XMI-P-1 (8-07) Page 2 of 2


C""PC,,,,P or in

v.

notify in the

(1) Limits;

the Underlying

Underlying Pollcias; or

re·

2

in

Agent No.:

N115928555

358 - 0734

14-MG-08-A9106

500090A027908

C009436/001

287127641

BONN 713043/01/200

AS . IEHICAN INS:iPANCE DOX G21669994 005 'LITE

7 -q EXCESS: Oii) iNSURANCE 2-.1100027001-00

•.:•:.t4PANY

9TH LLOYDL;

• D. ASSURANCE

Limits of Liability Attachment

$25,000,000 $25,000,000

$25,000,000 $50,000,000

$25,000,000 $75,000,000

$30,000,000 $100,000,000

$15,000,000 $130,000,000

$20,000,000 $145,000,000

$25,000,000 $105,000,000

$20,000,000 $190,000,000

$10,000,000 $210,000,000

$20, 000, 000 $220,000,000

Named

Issuing lii!-offor iulicy Ntiint)(?r

463

HIGHLY CONFIDENTIAL

tt:Atate inde in ity Company :ICI IEDULE OF UNULIV_YING POLICIES

Policy No:: TI 0000 9

;)ate:83, Slanci;Ard Time

911 - 353(12-07) INSURM)


ul

H

UNDERLYING

nY r.N1)0i NO. Scotts( ndemnity

HIGHLY CONFIDENTIAL

Al rii.ci ice io :tiio i - C:1,1Mt; A FAlfi OF

FOLli:Y NUMIIF it

i:N peesi:mrrir 1:IFFE-CliVli CAlF I r2:,)1 A.fit STANDP;.031.•,,:F•i NArid- 0 H" n :!11,EU) AGENT NO.

XMIOB0003.9 05/01/2008 N AS IIIIIC_I'ON MUTUAL 'INC. 31407

[HXCI.ESS POLICY - FOLLOWED POLICY ENDORSEMENT (DIFFERENCE IN CONDITIONS)

In consideration of the premiiiiii pi:id, it is hereby understood and agreed that:

I. Section I. INSURING AGREEMENT is deleted in its entirety and replaced with the following:

INSURING AGREEMENT

The Company shall provide the Insureds with insurance coverage excess of all the Underlying Pol-icies. This Policy is subject to the same representations as are contained in the applications for the Underlying Policies and, except with respect to the premium, the Limit of Liability and as other-, ,isc o-nvided her , .iii, the insurance coverage provided by this Policy shall apply in accordance with

terns, I . :11 , iitions. conditions, exclusions and limitations as are contnined in the Followed Policy and, to the tent coverage is further limited or restricted thereby, in any other of the Under-lying Policies excess of the Followed Policy. This Policy shall not grant broader coverage than the Followed Policy or the most restrictive of any Underlying Policies that are excess of the Followed Policy.

II. Section IV. REDUCTION OR EXHAUSTION OF UNDERLYING LIMITS is deleted in its entirety and re-placed with the following:

A. It is expressly agreed that liability for any . I attach to the Company only after:

(1) the amount of the Underlying Limits is paid, whether by the insurers of the Underlying Policies or by the Insured(s)ho the extent that any insurer of any of the Underlying Policies has not paid the full amount of such insurer's liability due to that insurer's financial insolvency: or

(2) the Followed Policy and ali Underlying Policies excess of the Followed Policy are exhausted prior to the occurrence of (1) above due to difference in conditions that require the Fol-lowed Policy and such Underlying Policies ex , v[ mm Followed Policy to pay loss covered under the Followed Policy.

The Company shall then be liable to pay only up to the Limit of Liability set forth in Item 2. of the Declarations, which shall be the iniixiintim amount payable by the Company under this Policy with respect to all Claims first mauodo,vq the Policy Period.

B. In the event the Underlying Limits ;/v) r.o-tially reduced by naiason of actual payment by thc insurers of the Underlying Policies, then siilijeet to the Limit of Liability this Policy shall continue to apply as excess over the reduced Urn lerlying Limits.

C. In the event the Underlying L i mit-, are wholly exhausted by reri-,on of actual payment by the insur-ers of the Underlying Pol,cies :he Insured has paid the iinount of any applicable deducti-ble or uninsured retention u: ti,e Followed Policy), to the Limit of Liability this Policy shall continue to apply as primary insurance in accordar n -e with the terms arid conditions of the Followed Policy and to the terms, conditions and exclusions of this Policy; provided always

VAI-57 (1-08)

1 of 2 ' )


AGENT NO

I

In

to Company

in

HIGHLY CONFIDENTIAL

dull Polii:v ;:;!,If 1LIl Refmitton, which shall be ap

pto ,a t o any kIit Claim in W i11 inannor Hiocifiod in the Followed Policy,

If itio Primary Policy GOI 4 6i)6L;vIit.; grant of 'rage that is !,l)ject to sublimit of liaoility, (boo covou:-.cie under this Policy shall not •lopy Io any claim which is subject to such sublimit of

I , this l',31ioy iill recognize erosion of any of the Underlying Policies, including the Followed Policy, due to the existence of a sublimit.

Section V, CONDITIONS OF COVERAGE, Section A. doloted in its entirety and replaced ' t4th the following:

A. i!;;) condition precedent to this Policy's covorsoo, Iho insurods agree to mile-11:w Policies full nitnut ClU11 1 19 the Policy Period is,,capt. for any reduction or oxlini.;zion of IC' Under-lying Limits y reason of actual oayments theraunder. provilid, however, if Inc: Followed Policy cuma-vios to afford coverage a:!qardle! :.:s of the maintenance of other Underlying

ill also continue to afford na y If the Underlying Policies arc not so maintainet, f.?./,1:ord by the Followed Policy the Company shaii not Hi liable under this Policy to a groHter

• :itont it would have been had such Underlying Policies been maintained.

All other terms and conditions of this Policy remain unchanged.

It :i0121ZED REPRESENTATIVE DATE

(NOW P:!.,:e2of2


H

conditions this

I

in

HIGHLY CONFIDENTIAL

Sco daIndemnity CompanyENFI NO.

4 FrACHED 10 ANID FORMING A PART OF

POLICY NDMBER:•NDoRSEMENT EFFECTIVE DATE

(1'..,01 A M. STANDARD TIME) NAMED INSURED AGENT NO.

XNT0800039 05/01/2003 :1 1 ' ::: ' : ' CTI: MUTUAL '11NC , 31407

THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.

EXCESS POLICY - EXHAUSTION/RFDUCTION OF UNDERLYING LIMITS

.n consideration of the premium paid, it is hereby understood and agreed that Section IV. REDUCTION OR EXHAUSTION OF UNDERLYING LIMITS, Section C. is deleted in its entirety and replaced with the following:

C. This Policy shall only pay covered loss in the event of the reduction or exhaustion of the Underlying Policies by reason of actual payment by the insurers of the Underlying Limits for covered loss; pro-vided, however, if the Insured shall pay any covered loss, then the Company agrees to recognize that the Underlying Limits are reduced or exhausted to the extent of such payments by the Insured. In no way shall such payment by the Insured constitute a waiver of any terms, conditions or exclusions of the Underlying Policies or this Policy. This Policy shall not drop down for any other reason. including but not limited to the existence of any sublimit in any Underlying Policy or the uncollectibility (in whole or in part) of any of the Underlying Limits; provided, however, this policy will recognize erosion of any of the Underlying Policies due to the existence of a sublimit.

The Insureds expressly retain the risk of any gap in coverage or uncollectibility and the Company does not in any way insure or assume such risk.


; REPRESENTAIIVk DATE

X(.11-58 (1-08)

P co 1 of I


INSURED AGENT

c.

in not

other terms and Policy unchanged.

in

EiqD01 NO coatIttLeTrit irnnity Cortipany

HIGHLY CONFIDENTIAL

, i 1 AUiL( ' P7' D

I EDLICY NUmiiii R

i `JIP,ICi +.11• '`i i ITH C. I NI' DATE il2 01 ,', `,1 `:TANDAHDTV1E)

tt.m.u.i) INSURED AGENT No.

Xt410800039 it ' 008 .:-:: ili NLit tt. t .;:t tan . . :, TiEIC . 31407

THIS ENDOSI M r.: NT CHANGES THE POLICY PLEASE READ IT CAREFULLY.

EXCESS POLICY - PRIOR OR PENDING LITIGATION EXCLUSION

In cum :Adoration nl the inemiurn paid, it is he_, , i:iby undorslo riLl nod .-4rurfil that the Company shall not be liable to pay any ..-.1inolint from any Claim nL:..,ide a.cjairist ;iny Insured kirind upon, arising out of, or in any way !elated to (1) Any or pending litigation, !Haim, mid,scii or pinceeding Against any Insured as of the Prior or Peneiri ILLi-Liton Date stated below or (2) any art, oinisLon, cilcuinstance or situation underlying or alleged in negation, claim, demand, suit or proceeding or any substantially similar act,

CII-CLIGIStailrite, or situation,

Prior or Pending Litigation Date: 04101/20nr,


AUTHORIZED REPRECRE rATIt is DA I Ei

Pi q ;',, 1 Of 1


other terms

in o




BOARD OF DIRECTORS MINUTES

The Board of Directors of Washington Mutual Inc the Company held its February

meeting on Tuesday February 21 2006 in Seattle Washington Present were Farrell Frank

Killinger Leppert Lillis Matthews Murphy Osmer McQuade Pugh Reed Smith Stever and

Wood Mr Killinger presided Also present were Casey Chapman David Horvath Kido

Porter Rotella Saunders Schneider and Lynch secretary Messrs Leppert and Saunders

attended by means of a conference telephone that enabled all participants to hear one

another The Board of the Company met in joint session with the Board of Directors of

Washington Mutual Bank which is the primary banking institution subsidiary of the

Company

Approval of Januay 17 2006 Meeting Minutes

Mr Killinger submitted the minutes of the January 17 2006 meeting On motion duly

made and seconded the Board approved the minutes

Financial Updates

Mr Casey reported that net income

in January 2006 was greater than planned as a

result of favorable developments in

the Card Services group The economic environment was

adverse as the spread between the interest rate on the ten year interest rate swaps and the

three month London InterBank Offer Rate became smaller in January The net interest margin

shrank in January The cost of hedging mortgage servicing rights S s continues to be

high and gain on the sale of loans is relatively low Customer interest in adjustable rate

mortgage loans ARMS has declined as a result of the small difference between short term

and long term rates Offsetting these factors the Card Services group produced results that

were significantly greater than planned in January in part as a result of a securitization

Mr Casey submitted a written report on six key factors affecting 2006 earnings average

asset growth retail banking fee growth the net interest margin I noninterest income

credit provisioning and noninterest expense He noted that the annualized run rate of growth in

retail banking fees in January was greater than the plan for 2006 He discussed prospects for a

reduction in the NIM and in noninterest income In response to a question by Mr Lillis Mr

Casey reported on the Companys average or normalized NI M and Mr Killinger provided

information with regard to high points of the NIM in the past The results of managing MS Rs inJanuary were worse than planned reflecting high hedging expenses Total assets were less

than planned for the month Mr Casey noted the possibilityof repurchasing shares of the

Companys stock He also reported that aggregate deposit balances were less than planned

Income for the month was increased by the receipt of a $134 million judgment for the HFAhmanson I Home Savings Goodwill lawsuit

Mr Rotella noted that all secured lending businesses are under pressure He

emphasized the importance of maintaining strong controls on lending at this time

Mr Kido reported on the Retail Banking and Financial Services group The growth in

the total number of retail and business checking accounts was greater than planned for

January As a result of a shortfall in the growth of time deposits and certain other accounts

however deposit growth in January was not as great as planned First lien home equity loan

originations and second lien home equity loan originations also were less than planned Growth

in the number of retail banking households served was greater than planned as a result of an

increase in

the number of checking accounts

131168 1 WM Confidential Limited Access

APPROVED BY THE BOARD OF DIRECTORS APRIL 18 2006


HIGHLY CONFIDENTIAL



The net interest income of Retail Banking and Financial Services for January 2006 was

more than million greater than planned Noninterest income was less than planned and

noninterest expense was greater than planned Net income after tax was greater than planned

Mr Kido reported that the new u Free Checking product would be launched on

March 13 He also noted initiatives to coordinate with the Card Services group to introduce

credit cards

in

all retail banking and financial services stores by the end of April Mr Rotella

reported on a pilot program to preapprove credit cards at the time deposit accounts are

opened He assured the Board that crosssales will be tracked carefully In response to a

question by Mr Frank Mr Kido reported on financial modeling for the monthly analysis of new

checking accounts and Mr Rotella indicated that the planning has been conservative including

analysis of a worstcase scenario Mr Kido submitted an estimate of the percentage growth in

fee income expected as a result of the addition of the new account to Retail Bankings array of

products At Mr Killingers request Mr Rotella described plans for the introduction of the new

account including advertising and executive visits to retail banking and financial services

stores In response to questions by Messers Frank Lillis and Matthews Mr Killinger and r

Rotella reported on the features and marketing title of the new account

Mr Rotella submitted a report on improvement in account and household growth in the

geographic market that had been the subject of a special report to the Board in September

2005 Subsequent reports to the Board will aggregate information on new markets Mr Rotella

noted that new stores are contributing a majority of account growth Mr Kido noted that the

innovative practices developed in the test market had been adopted in other markets In

response to a question by Mr Smith Mr Kido identified factors that are important to success in

attracting new households and accounts

Mr Saunders reported on the results of the Card Services group in January The group

built on its momentum from the fourth quarter of 2005 and is substantially ahead of the plan for

income in January Net credit losses were lower than planned for the month New accounts

were substantially more numerous than planned due to continued strong performance in the

retail channel and other factors Net income was more than $111 million greater than planned

resulting in an operating efficiency ratio of 255 percent The number of employees in the

group was greater than planned due to delays in the relocation of backoffice facilities and the

sale of branch facilities

Mr Schneider reported on the Home Loans group The environment continues to be

challenging as the relatively flat yield curve induces customers to seek hybrid and fixed rate

loans The cost per loan funded was greater than planned due to a smaller number of funded

loans The group has taken several actions to reduce costs including the elimination of

temporary help and reducing the number of loan fulfillment centers The integration of Long

Beach Mortgage Company into the Home Loans group is expected to result in further savings

MS Rs continue to be very expensive to hedge With regard to early payment default

repurchase reserves at Long each Mortgage Company however Mr Schneider reported that

reserves are aropriate In response to a question by Mr Matthews Mr Casey commented

on the prospects for the first quarter of 2006 Mr Rotella noted the effect of repurchases and

restructuring by Long each Mortgage Company Mr Schneider reported that mortgage

banking competitors are encountering difficulties and Mr Killinger noted the challenging

environment for the Home Loans group

Mr Rotella reported that the Commercial groups multifamily loan originations in January

2006 were greater than any preceding January although they were less than the aggressive

plan The amount of multifamily loans and securities on the balance sheet at the end of




HIGHLY CONFIDENTIAL

WIVI Confidential Limited Access


January based on a sub segment view was close to the planned level Commercial Mortgage

Lending which offers a standardized process with relatively low fees for smaller commercial

real estate loans also had substantially greater originations in January 2006 than in December

2005 Net interest income was less than planned primarily due to a shortfall in net interest

spreads in multifamily lending and commercial real estate lending

Written Financial Report

r Killinger also submitted Mr Caseys written Financial Report with regard to the

Companys financial performance in the month of January 2006 This written report included

the following sections Management Comment Comparison of January 2006 to December

2005 Financial Highlights including Interest Income Interest Expense Net Income

Profitability Asset Quality Capital Adequacy and Key Business Indicators Consolidated

Statements of Financial Condition and Net Interest Spread and Margin

R2g2rt on Cost Reduction Initiatives

Mr Rotella noted the importance of reductions in sts Ms Horvath and Mr Porter

submitted a report on initiatives for this purpose Mr Porter specified the current forecasted

expense run rate He noted the challenging interest rate environment the anticipated effect of

restructuring and issues related to the complexity of certain businesses Ms Horvath

submitted an action plan for reducing costs

in

this environment including a new process for

hiring employees who do not serve customers directly restrictions on the use of consultants

reductions in signing limits on expense approvals prioritization of current projects to eliminate

projects with a lower payback the alignment of operational excellence resources to the highest

value projects and the use of alternative sources In response to a question by Mr Stever MsHorvath noted issues relating to customer facing positions and back office positions Mr Casey

noted that the response differs according to business unit and Mr Rotella noted the

importance of preserving the effectiveness of Retail Banking stores

In response to a question

by Mr Lillis Mr Casey reported on personnel costs as a percentage of personnel cost

reductions and Mr Killinger noted the importance of reducing low priority programs with low

estimated payoffs

Mr Porter reported on next steps including assigning the highest priorities to projects

that are expected to provide the greatest benefit in 2006 He noted the importance of

preserving significant revenue opportunities Progress will be monitored against objectives

Ms Horvath and Messrs Porter and Rotella then left the meeting

Voice of the Customer Rego

Mr Killinger submitted Mr RostasVoice of the Customer Report The report described

the results of initiatives to improve customer loyaltyand reduce the number of customer

complaints In response to a question by Mr Stever Messers David and Killinger reported on

changes in the targets under the Leadership Bonus Program for customer satisfaction in the

Home Loans group and the Commercial group as a result of the transfer of Long Beach

Mortgage to the former group from the latter group

Economic CommenjM

Mr Killinger submitted Mr Longbrakes economic outlook commentary for February

The written commentary included a summary of recent developments analysis and projection

of trends

131168 Confidential Limited Access



HIGHLY CONFIDENTIAL



Investor Relations R2port

Mr Killinger submitted the Investor Relations report He also reported on receipt of a

letter from a large institutional investor In response to a question by Mr Reed Mr Killinger

assured the Board that the information to be provided to this investor in response to this letter

would be the same as is

available to all investors

In response to a question by Mr Matthews

Mr Casey reported on the differing approaches of various investment analysts and Mr Killinger

commented in changes in the composition of the ranks of analysts on the sell side In

response to a question by Mr Frank Mr Casey reported on developments relating to analysts

In response to a question by Mr Lillis Mr Reed and Mr Casey commented on the percentage

of the Companys stock held by institutional investors In response to a question by Mr

Matthews Mr Casey reported that certain shareholders tend to be long term investors

RegulatoEy

Mr Killinger submitted Mr Robinsons report on regulatory matters The report included

information about matters requiring oard attention and the current examination

Audit Committee Rep2rt

Mr Frank reported on the meeting of the Companys Audit Committee The Committee

met in joint session with the Audit Committee of WMB

The Committee reviewed a report on compliance with Section 404 of theSarbanesxleyAct The Chief Financial Officer assured the Committee that appropriate remedial

measures will be taken to rectify deficiencies

In addition the Home Loans Group President

updated the Committee on the need to repurchase certain loans that had been sold by Long

Beach Mortgage Company

Mr Frank reported that the Committee had reviewed a report from the Division

Executive for Corporate Tax about reconciliation of accounts and related issues At this point in

Mr Franks report to the Board in response to a question by Ms Pugh Mr Casey reported to

the Board with regard to work to reconcile the accounts In response to a question byMr Lillis

Mr Casey identified the years that may be subject to reconciliation


by Mr Frank Mr Casey assured the Board that conservative estimates were used for loan fees

and accounting

Mr Frank resumed his report on the Audit Committee meeting The Committee

reviewed the management report and attestation process required by the Federal Deposit

Insurance Corporation Improvement Act of 1991 F ICIAfor depository institutions WMBand the Companys smaller federal savings bank subsidiary are in compliance The FDICIA

process has been merged with the management report and attestation process required by the

similar and more recent Sarbanes xley Act for the Company

The Committee reviewed audit and non audit services provided by the independent

auditor The Controller described the proposed fees for the 2006 audit which are estimated to

be essentially unchanged from the previous year The audit engagement partner discussed

expectations with regard to anticipated assistance from Internal Audit Subsequently the

Committee reviewed the Independent Auditors qualifications to serve in 2006 Thereafter in

an executive session the Committee approved the selection of the Independent Auditor




HIGHLY CONFIDENTIAL



Identification of it Committee Financial e

The Audit Committee also reviewed information with regard to the expertise of its

members and recommended a Board determination of Mr Franks qualifications to serve as an

Audit Committee financial expert Mr Frank recused himself from voting with regard to this

determination On motion duly made and seconded the Board determined that Mr Frank

satisfies the requirements for an audit committee financial expert under rules established by

the Securities and Exchange Commission

Audit Committee Review Actions on Reports

The Committee reviewed the Controllers report on proposed changes in the policy on

audit and non audit services to comply with recent federal rules The Committee approved

these changes The Controller also reported on critical accounting policies to be included in the

annual report These included policies relating to fair value measurement the allowance for

loan and lease losses accounting for derivatives and hedge accounting

The Committee approved certain statements to be included in the proxy statement for

the 2006 annual meeting These statements included the description of fees for the services of

Deloitte Touche LLP the statement relating to the ratification of the selection of the

independent auditor and the draft report of the Audit Committee in the proxy statement

The Committee reviewed a report from the General Counsel with regard to the hiring of

former employees ofD

eloitte All such hirings were in plian with the policy

The independent auditor submitted draft reports on the financial statements to the

Committee including determinations under Section 404 of the Sar anes xley Act The final

reports will be issued on March 8th No material weaknesses are expected

f Auc Committee Charter

Mr Frank reported that the Committee considered and recommended Board approval of

an amended version of the Committees charter The amendments provided for delegation of

responsibility to a member of the Committee and clarified responsibilities with respect to the

annual evaluation and succession planning subject to such changes as the Governance

Committee may recommend On motion duly made and seconded the Board approved the

charter amendments

Audit Committee Action Board Correspondence is

Mr Frank reported that the Committee had performed its annual review of the policy

regarding the handling of correspondence addressed to the Board of Directors Exercising its

delegated authority under the terms of this policy the Committee adapted certain amendments

to the policy

Changes in Code of Ethics for Senior Financial Officers

Mr Frank reported that the Audit Committee had reviewed and recommended that the Board

approve changes to the Code of Ethics for Senior Financial Officers including a transfer of authority

for the annual review of the Code to the Committee On motion duly made and seconded the

Board approved the changes

131168Confidential Limited Access



HIGHLY CONFIDENTIAL



Other it Committee Matters

Mr Frank reported that the Committee had reviewed and approved the 2006 Service

Plan for the Internal Audit Department The Committee also reviewed Internal Audits approach

for audits of foreign outsourcing and reviewed an update on the renewal of directors and

officers liability insurance Mr Frank advised that coverage would be approximately the same

The Committee also held an executive session with management The Home Loans

Group President reported on improvements in controls for certain lending operations

The Committee met in executive sessions with the independent auditor and the internal

auditor Subsequently in another executive session the Committee approved the appointment

of Deloitte and Touche LLP as the independent auditor as noted above

Governance Committee o

Mr Reed reported on the meeting of the companys Governance Committee The

Committee met in joint session with the Governance Committee of B

Amendment of Committee Charters

Mr Reed reported that the Governance Committee recommended changes A in its

charter to clarify matters relating to oversight of the strategic planning process Directors

resignations and compensation and B in its charter and the charters of the Audit Committee

Corporate Development Committee Corporate Relations Committee Finance Committee and

Human Resources Committee to clarify responsibilities with respect to the annual evaluation

and succession planning On motion duly made and seconded the Board approved these

changes in the charters as recommended by the Committee

Changes in Corporate Governance Guidelines

Mr Reed reported that the Governance Committee had reviewed and recommended

Board approval of certain changes in the Corporate Governance Guidelines and a change in

the Guidelines for Determining Director Independence as set forth in Appendix A On motion

duly made and seconded the Board approved these changes

Determination Director Independence

Mr Reed reported that the Governance Committee reviewed information necessary for

determination of each Directors independence under the Washington Mutual Guidelines for

Determining Director Independence The Committee recommended that the Board determine

that all directors with the exception of Mr Killinger Ms Pugh and Mrs Farrell are

independent On motion duly made and seconded the Board made this determination A copy

of the resolutions adopted by the Board in making this determination will be kept in the minute

book as an appendix to these minutes

Declassification of tBoard and Related Actions

Mr Reed also reported that the Governance Committee recommended amendments of

the Companys Articles of Incorporation and bylaws to declassify the Companys Board of

Directors and establish annual director elections beginning in 2007 On motion duly made and

seconded the Board resolved to approve the amendment of the Articles for submission to the

Companys shareholders and to amend the bylaws effective upon the filing of the amendment

of the Articles A copy of the resolutions adopted by the Board will be kept in

the minute book




HIGHLY CONFIDENTIAL



as an appendix to these minutes

Human Resources Committee

Mr Stever submitted the report of the Companys Human Resources Committee The

Committee met telephonically on Friday February 17 2006 in joint session with the Human

Resources Committee of WMB

Amendment of Resources Committee Charter

Mr Stever submitted the Committees recommendations for changes in the Committees

charter subject to further changes recommended by the Governance Committee On motion

duly made and seconded the Board resolved to approve these changes A copy of the

resolutions adopted by the Board will be kept in the minute book as an appendix to these

minutes

Other Human Resources Committee Matters

Mr Stever reported that the Committee had reviewed the draft report of the Committee

for the proxy statement to be sent to shareholders The Committee directed certain changes in

this report prior to its incorporation into the proxy statement

Amended and Restated i Incentive Plan

Mr Stever reported that the Committee recommended the Boards approval of the

Amended and Restated 2003 Equity Incentive Plan for submission to shareholders Among

other things the amendments would increase the number of shares available for grant under

this plan Mr Stever noted a difference between option grants and restdcted stock or

performance share grants On motion duly made and seconded the Board resolved to approve

this plan and directed management to submit this plan for approval by shareholders at the April

2006 annual meeting Mr Killinger recused himself from deliberations and voting of the Board

with regard to this matter A copy of the resolutions adopted by the Board will be kept in

the

minute book as an appendix to these minutes

Executive Incentive Compensation Plan

Mr Stever reported that the Committee had approved the Executive Incentive

Compensation Plan and directed management to submit this plan for approval by shareholders

at the April 2006 annual meeting This new umbrella plan imposes an aggregate limit on

incentive compensation for executives In response to a comment by Mr Lillis Mr Stever

noted that 05 percent of a companys net income is a common percentage limit and reported

on the purpose of the limitation In response to a question by Mr Reed Mr Stever described

the scope of coverage of the limitation In response to a question by Mr Murphy Mr Stever

described the nature of the limitation

Preparations for Annual Shareholder Meeting

Mr Killinger requested that the Board approve certain actions in preparation for the

submission of matters to the shareholders at the 2006 annual meeting He noted procedures

for further comments by Directors on the draft proxy statement On motion duly made and

seconded the Board resolved to approve the preparations for this annual meeting A copy of

the resolutions adopted by the Board will be kept in

the minute book as an appendix to these

minutes

i31168 7 WIVI Confidential Limited Access



HIGHLY CONFIDENTIAL



Long Beach y Reorganization

Mr Killin er submitted a comprehensive set of resolutions to approve all phases of the

corporate reorganization involving Long Beach Mortgage Company On motion duly made and

seconded the Board resolved to approve this reorganization A copy of these resolutions will

be kept in the minute book as an appendix to these minutes

Clarification of Support for Capital Raising Transaction by WMB

Mr Klllin er submitted a proposal for clarifying amendments of the resolutions adopted

by the Board at its January meeting in connection with the planned issuance of securities the

LLC Preferred Securities by a Delaware limited liability company that would be organized as

an operating subsidiary under WMBs indirect subsidiary University Street Inc Investors

would purchase certain other securities the SPE Securities from two special purpose

entities each of which will use the proceeds of its issuance of SPE Securities to finance the

purchase of one of the two classes of LLC Preferred Securities The Company will serve as a

source of strength for WMB as the SPE Securities will automatically be exchangeable into one

share of a new class of preferred stock of the Company WMI Preferred or a share of

depositary stock representing a fractional interest in I Preferred upon the occurrence of a

Supervisory Event as defined in the materials submitted to the Board In response to

questions by Mr Matthews r Casey confirmed that executives do not have any personal

interest

in

the special purpose entities being used to effectuate this transaction On motion duly

made and seconded the Board unanimously adopted the clarifying resolutions A copy of

these resolutions will be kept in the minute book as an appendix to these minutes

Officer Elections Promotions and Transfers

On motion duly made and seconded the Board approved certain officer elections

promotions transfers and other changes A copy of a schedule of all such changes as

submitted to the Board will be kept in

the minute book as an appendix to these minutes

Executive Session with CEO

Ms Chapman and Messrs David and Lynch left the meeting The members of the

Board including Mr Killinger discussed such matters as the Board deemed to be appropriate

for its discussion

Nominees r Election to Board by Shareholders

Mr Reed reported on the Governance Committees recommendations of candidates to

be nominated by the Board for election as Directors by the shareholders at the Companys

2006 annual meeting On motion duly made and seconded the Board resolved to nominate

these candidates for election A copy of the resolution adopted by the Board regarding

nominees for Directors will be kept in


Mr Reed submitted the report of the Governance Committee relating to Regina Montoya

motion duly made and seconded the Board directed management to complete certain checks of

references and contingent on the completion of this process with no negative references approved

the nomination of s Montoya as a candidate for election by the shareholders at the Companys

2006 annual meeting for a term to expire in 2007 in addition to the candidates whose names are

set forth

in

the resolutions adopted by the Board regarding nominees for Directors and in the




HIGHLY CONFIDENTIAL



resolutions adopted by the Board regarding matters to be submitted to the shareholders at the 2006

annual meeting

Remainder Executive Session

Mr David and Mr Killin er then left the meeting The Board then discussed matters

that were deemed appropriate for discussion by the Board in its discretion

There being no further business the meeting was adjourned

Appendices

Approval Director Independence Determinations

Approval Declassification of Board of Directors

Approval of Human Resources Committee Charter

D Approval of Amended Restated 2003 Equity Incentive Plan

Approval Comprehensive Preparations for 2006 Annual Meeting

F Approve Action Relating to Long Beach e Company Reorganization

G University Street Inc Issuance Preferred Securities

Schedule of Officer Elections Promotions Transfers and r Changes

I Approval of Nominees for Election tote Board by Shareholders




HIGHLY CONFIDENTIAL

ConfidentialWM Limited


I Director lgdependence Determinations

VED that the Board hereby finds that all of tcurrent Company directors other than

r Mrs Farrell and s Pugh are independent directors pursuant to the Washington

Director Independence Guidelines

RESOLVED FURTHER that the Board hereby finds that all of the current members of the

Corporations Audit Committee are independent directors pursuant to the applicable rules and

regulations of the Securities Exchange Commission and the New fork Stock Exchange

131168 10 Confidential Limited Access



HIGHLY CONFIDENTIAL



Appendix B Approval of Declassification of Board of Directors

WHEREAS based on the recommendation of the Governance Committee the Board of

Directors deems it in the best interests of the Company to change the terms of all Companydirectors from three year terms to one year terms effective as of the annual meeting of

Company shareholders in 2007

NOW THEREFORE IT RESOLVED that ARTICLE IV of the Companys Amended

Articles of Incorporation be amended and replaced in its entirety with the following

ARTICLE I

BOARD OF DIRECTORS

The Company shall be managed by a Board of Directors The number of directors shall

be stated in the Companys Bylaws provided however that such number shall not be less than

five 5 The directors elected at any annual meeting of shareholders prior to the 2007 annual

meeting of the Companys shareholders shall be classified into three classes of elected

directors designated as Class 1 Class 2 and Class 3 directors Each class shall containonethirdof the total number of directors as near as may be The terms of the Class 1 directors

shall expire at the first annual shareholders meeting after their election The terms of the Class

2 directors shall expire at the second annual shareholders meeting after their election The

terms of the Class 3 directors shall expire at the third annual shareholders meeting after their

election At each annual meeting of the Companys shareholders from and after the

Companys annual meeting of shareholders to be held in 2007 the directors shall be elected for

terms lasting until the next annual meeting of shareholders following their election and until

their successors are elected and qualified subject to their earlier death resignation or removal

A vacancy on the Board of Directors may be filled by the Board

in

accordance with the

applicable provisions of the Companys Bylaws A director elected to fill a vacancy shall be

elected for a term of office continuing only until the next election of directors by shareholders

RESOLVED FURTHER that any Senior Executive Vice President any Senior Vice

President and Associate General Counsel the Secretary or any Assistant Secretary any of the

foregoing an Authodzed Officer are hereby authorized and directed to submit a proposal

and resolution to the Companys shareholders for approval of the foregoing amendment to

Article IV of the Companys articles of incorporation at the 2006 annual meeting of

shareholders

RESOLVED FURTHER that the Authorized Officers are hereby authorized and directed

to take any actions that are aropriate in the discretion of any of them to effect the forgoing

resolutions

RESOLVED FURTHER that effective upon the filing of Articles of Amendment with the

Washington Secretary of State to amend the Companys Articles of Incorporation pursuant to

the foregoing resolutions Section 42 of the Companys Amended Bylaws shall be amended

and replaced in its entirety with the following

Section 42 Number Tenure Qualification The number of directors set

forth in Article Ii of these bylaws may be increased or decreased from time to time by

amendment to or in the manner provided in these bylaws No decrease however




HIGHLY CONFIDENTIAL



shall have the effect of shortening the term of any incumbent director unless such

director resigns or is removed in accordance with the provisions of these bylaws The

directors shall hold such terms as set forth in the articles of incorporation In all cases

directors shall serve until their successors are duly elected and qualified or until their

earlier resignation removal from office or death Directors need not be residents of

the state of Washington or shareholders of the corporation

RESOLVED FURTHER that any Authorized Officer is hereby authorized and directed to

take any actions that are appropriate in the discretion of any of them to effect the forgoing

resolution




HIGHLY CONFIDENTIAL

WM I Limited Access


f al

of Human Resources Committee Charter

HEREAS the Board of Directors previously adopted the Human Resources Committee

Charter the uC rtr and

HEREAS the Committee deems

it

advisable to amend the Charter and

WHEREAS the amended Charter must approved by the Board or Directors

NOW THEREFORE IT IS HEREBY RESOVED that the Committee hereby

recommends that the Board of Directors approve the attached revised Human Resources

Committee Charter




HIGHLY CONFIDENTIAL



ix Approval of Amended Restated 2003 Equity Incentive Plan

WHEREAS the Company previously adopted the 2003 Equity Incentive Plan the Plan to

provide for awards of stock options restricted stock performance shares and other types of

equity vehicles Equity Awards and

WHEREAS the Board of Directors deems

it

advisable to amend and restate the Plan to amongother things increase the number of shares that may be issued or subject to an award under

the Plan and

WHEREAS the Plan must be approved by the Board of Directors and the Companys

shareholders

NOW THEREFORE IT IS RESOLVED that the Board of Directors hereby approves the

attached Amended and Restated 2003 Equity Incentive Plan the New Plan substantially in

the form attached and

FURTHER RESOLVED that Board of Directors hereby authorizes and directs the Companyssenior executive officers to make any amendments to the New Plan they deem necessary to

secure the approval of a majority of the Companys shareholders or to clarify provisions of the

New Plan provided that such amendments do not materially increase the Companys liability

under the New Plan and

FURTHER RESOLVED that the Board hereby directs management to submit the New Plan as

amended

in

accordance with the preceding paragraph to the shareholders

in

the 2006 Proxy




HIGHLY CONFIDENTIAL



Appendix E Approval of Comprehensive Preparations for 2006 Annual etin

RESOLVED FURTHER that any Senior Executive Vice President any Senior Vice President

and Associate General Counsel the Secretary or any Assistant Secretary any of the foregoing

an Authorized Officer or any one of them acting alone is hereby authorized and directed to

take any action that is appropriate in the discretion of any of them to submit proposals for

election of the Kerry K Killinger Thomas C Leppert Charles M Lillis Michael K Murphy and

Orin C Smith the Nomineesn

ratification of the Auditor Appointment to the shareholders the

approval of the Washington Mutual Executive Incentive Compensation Plan the approval of a

Company Amended and Restated Equity Incentive Plan and the approval of a management

proposal to declassify the Board of Directors and establish annual director elections as items of

business the items at the Annual Meeting and to oppose a shareholder proposal regarding

disclosure of the Corporations political contributions if it is brought at the Annual Meeting theShareholder Proposal

RESOLVED FURTHER that the Board of Directors recommends that the shareholders vote

FOR all of the Items and AGAINST the Shareholder Proposal

RESOLVED FURTHER that pursuant to Article lll Sections 31 and 33 of the bylaws of the

Corporation the Board of Directors hereby declares that the Annual Meeting shall be held in

Seattle Washington on Tuesday April 18 2006 at 130 pm at the S Mark Taper Foundation

Auditorium at Benaroya all 200 University Street Seattle Washington

RESOLVED FURTHER that the purposes of the Annual Meeting shall be to act on the Items

and Proposal and to transact such other business as may properly come before the meeting or

any adjournments thereof

RESOLVED FURTHER that pursuant to Article III Section 34 of the Corporations bylaws the

Board of Directors hereby sets February 24 2006 as the record date for determination of the

shareholders entitled to notice of and to vote at the Annual Meeting

LV FURTHER that the Board of Directors hereby approves the Proxy Statement in

the form presented to the Board and that the Authorized Officers are hereby authorized

empowered and directed to finalize the Proxy Statement with such changes as shall be

appropriate with the advice of counsel and to incorporate in such Proxy Statement 1 a Report

of the Human Resources Committee in such form as the Human Resources Committee shall

approve and ii a Report of the Audit Committee in such form as the Audit Committee shall

approve

RESOLVED FURTHER that the Authorized Officers and each of them acting alone is hereby

authorized empowered and directed to make or to designate any person to make any

necessary filings with the Securities and Exchange Commission The New York Stock

Exchange and any other appropriate Federal or State governmental entities or regulatory

authorities in connection with the preparation and distribution of the Notice Proxy Statement

and Form of Proxy

LVED FURTHER that the Authorized Officers and each of them acting alone is hereby

authorized empowered and directed to cause to be mailed at least 20 days prior to the Annual

Meeting to all shareholders eligible to vote at the Annual Meeting copies of the Notice Proxy

Statement Form of Proxy and Annual Report and if necessary to secure a quorum of

shareholders a Reminder Notice all pursuant to the Corporations bylaws and applicable

regulations

131168 15 WIVI Confidential Limited Access



HIGHLY CONFIDENTIAL



RESOLVED FURTHER that William L Lynch and Fay L Chapman are hereby appointed as

proxies of the Board of Directors to vote and act with respect to the shares of common stock of

this Corporation for which proxies will be solicited for use in connection with the Annual

Meeting

RESOLVED FURTHER that the Board of Directors hereby authorize Automated Data

Processing Inc to act as Inspector of Elections for the Annual Meeting




HIGHLY CONFIDENTIAL



Appendix Approve Action Relating to Long Beach e Company Reorganization

WHEREAS the Board deems it in the best interests of the Bank to effect together with certain

affiliates a reorganization the Reorganization the first phase of which would occur on or

about arch 1 2006 and would result in Long Beach Mortgage Company Long Beachbecoming a firsttier wholly owned subsidiary of the Bank and the second phase of which would

occur on or about July 1 2006 and would result in the assets of Long Beach becoming vested

in the Bank

WHEREAS in connection with the Reorganization the Bank desires to enter into a plan of

reorganization substantially in the form presented at this meeting the Plan of Reorganization

WHEREAS following the formation of an interim federal savings association Interim

Association by Washington Mutual Inc WMI the contribution by I of all of the stock of

Long each to Interim Association and the contribution by I of all of the stock of Interim

Association to New American Capital Inc the Bank desires to engage in a merger transaction

the Bank Merger with Interim Association in which Interim Association will merge with and

into the Bank pursuant to an agreement for merger and a plan of merger substantially in

the

forms presented at this meeting the Agreement for Merger and the Plan of Merger

respectively

WHEREAS the Plan of Reorganization contemplates that following the Bank Merger Long

Beach will be converted the Conversion from a Delaware corporation to a Delaware limited

liability company the LLCWHEREAS the Plan of Reorganization contemplates the establishment following the

Conversion of a Delaware common trust the Trust having the Bank as the sole beneficiary

and trustee and having a thirdparty administrative trustee the ThirdParty Trustee as the

sole administrative trustee of the Trust

WHEREAS the Plan of Reorganization contemplates that following the establishment of the

Trust the LLC will be merged with and into the Trust the Trust Merger pursuant to an

agreement and plan of merger substantially in the form presented at this meeting the Trust

Merger Agreement and

WHEREAS the Plan of Reorganization contemplates that following the Trust Merger the

ThirdParty Trustee will resign resulting in the assets of the Trust being vested in the Bank

THEREFORE IT IS RESOLVED that the Reorganization and the Plan of Reorganization are

hereby approved and each of the Authorized Officers is hereby authorized to execute and

deliver the Plan of Reorganization on behalf of the Bank

RESOLVED FURTHER that the Merger the Agreement for Merger and the Plan of Merger are

hereby approved and adopted and each of the Authorized Officers is hereby authorized to

execute and deliver the Agreement for Merger and the Plan of Merger on behalf of the Board

RESOLVED FURTHER that the Trust Agreement and establishment of the Trust are hereby

approved and each of the Authorized Officers is hereby authorized to execute and deliver the

Trust Agreement on behalf of the Company

RESOLVED FURTHER that the Trust Merger and the Trust Merger Agreement are hereby

approved and adopted and each of the Authorized Officers is hereby authorized to execute and

deliver the Trust Merger Agreement on behalf of the Company




HIGHLY CONFIDENTIAL

WM ti I Limited Access


RESOLVED FURTHER that for the purposes of these resolutions each of the following

persons shall be an Authorized Officer the Chief Executive Officer the President and Chief

Operating r the Chief Financial Officer the Senior Executive Vice President and any

Executive Vice President

RESOLVED FURTHER that each of the Authorized Officers is hereby authorized on behalf of

the Bank to execute and deliver any consents of the Bank as shareholder or member of any

entity involved in the Reorganization to execute and deliver any other documents or writings as

may be necessary or appropriate in such Authorized Officers judgment in connection with or to

effect the Reorganization or the transactions contemplated by these resolutions and to take any

other actions including without limitation the selection of the ThirdParty Trustee as may be

necessary or appropriate in such Authorized Officers judgment in connection with or to effect

the Reorganization or the transactions contemplated by these resolutions and

RESOLVED FURTHER that the Chief Executive Officer is authorized on the advice and

consent of the General Counsel on behalf of the Bank to make such changes with regard to

the Reorganization including without limitation changes in the Plan of Reorganization the

Agreement for Merger and the Plan of Merger as may be necessary or appropriate in their joint

judgment to conform to all applicable Federal regulatory guidance in connection with the

Reorganization or the transactions contemplated by these resolutions or to effect the

Reorganization or such transactions in compliance with all applicable Federal regulatory

requirements




HIGHLY CONFIDENTIAL



fix G University Street inc Issuance of Preferred Securities

WHEREAS Washington Mutual Inc the Company indirectly owns all of the issued and

outstanding common stock of University Street Inc University Street

WHEREAS University Street proposes to cause the formation of a Delaware limited liability

company the LLC and in connection therewith University Street and Washington Mutual

Bank will contribute to the LLC assets of approximately 54 billion in the aggregate

WHEREAS it is proposed that the LLC will issue common interests substantially all of which

will be issued to University Street

WHEREAS it is proposed that the LLC will issue to WMB or its designee two series or classes

of preferred interests the LLC Preferred Interests which LLC Preferred Interests in the

aggregate will not exceed 20 billion

WHEREAS it is proposed that one class of the LLC Preferred Interests will have a fixed

dividend rate and the other class will have a dividend rate which

is

fixed for approximately 5

years and thereafter is variable

WHEREAS it is proposed that the LLC Preferred Interests will be transferred to two special

purpose entities which in turn will issue substantially similar securities the SPE Securities to

investors

WHEREAS under specified circumstances each class of SPE Securities will automatically be

exchanged for preferred stock of the Company or for depositary shares representing fractional

interests in preferred stock of the Company

WHEREAS in a set of resolutions adopted at its January 17 2006 meeting the Prior

Resolutions the Board previously authorized the issuance of two series of such preferred

stock of the Company established substantive terms of each series delegated authority to

appropriate officers of the Company to determine within the limits specifically prescribed in the

Prior Resolutions the designation and relative rights preferences and limitations of each series

and provided for other matters relating to the preferred stock and the LLC preferred interests

and

WHEREAS the Board now desires to amend and supplement certain of the terms of each of

the series of preferred stock of the Company and certain of the provisions in the Prior

Resolutions

THEREFORE IT IS HEREBY RESOLVED that the two series of preferred stock authorized by

the Prior Resolutions shall be designated as the Series I Perpetual NoncumulativeFixedtoFloatingRate Preferred Stock the Series l Preferred Stock and the Series J PerpetualNoncumulativeFixed Rate Preferred Stock the Series J Preferred Stock respectively

RESOLVED FURTHER that notwithstanding the Prior Resolutions the Series I Preferred Stock

and the Series J Preferred Stock collectively the Preferred Stock shall each have rights

preferences and limitations which are set forth in the respective designations for each series

presented at this meeting subject to the completion and any modification by Authorized Officers

as herein provided the Designations

RESOLVED FURTHER that the Board hereby authorizes and delegates the authority to any

two of the Authorized Officers as defined in the Prior Resolutions to designate finalize

determine and complete the rights preferences privileges restrictions and other matters and

to

take such other actions relating to the Preferred Stock subject to the limits

in

the Prior




HIGHLY CONFIDENTIAL



Resolutions relating to the number of shares in each series liquidation amount maturity

holders redemption rights sinking fund and convertibility and to the following limits

i the Series I Preferred Stock will be at a fixed rate from issuance not to exceed 750per annum until March 15 2011 or another date in March 2011 as provided in the completed

Designation and thereafter will be at a floating rate for each dividend period at a rate equal to

the 3month LIBOR applicable to such period or in circumstances set forth in the Designation

475 per annum if higher plus a spread which will not exceed 275 basis points

ii the Series J Preferred Stock will be at a fixed rate not to exceed 80 per annum

iii the Company will be able to redeem the Preferred Stock any time on or after March 15

2011 or another date in March 2011 as provided in the completed Designation and

iv the holders of the Preferred Stock will have no voting rights except 1 to the extent if

any required by Washington law and ii in the event that dividends are not declared and paid

on a series of the Preferred or on certain other classes or series as described in the completed

Designation then holders of the Preferred Stock together with any other classes or series

described in the completed Designation will have the right to elect two directors of the

Company at the next annual meeting

RESOLVED FURTHER that the authorization and delegation in the immediately preceding

resolution shall subject to the limits therein include without limitation the authority to

determine the number of shares of each series of Preferred Stock to be authorized to

determine the dividend rates to specify additional redemption rights of the Company to specify

limits on the Companys rights to pay dividends on other equity securities if dividends have not

been paid on the Preferred Stock to approve the form of any stock certificate and to prepare

and authorize the filing of articles of amendment for each series of Preferred Stock with the

Secretary of State of the State of Washington

RESOLVED FURTHER that the number of shares authorized in the Designations as

completed by the Authorized Officers as provided herein shall upon filing of the articles of

amendment for each series be fully reserved for issuance

RESOLVED FURTHER that the declaration of covenants or other agreements referred to in

clause iii of the last resolution

in

the Prior Resolutions may also include such other provisions

or items as any Authorized Officer deems necessary or advisable including without limitation

restrictions on dividends and distributions on the Companys other equity securities if dividends

are not paid on the Preferred Stock after its issuance and restrictions on the sources of funds

for any redemptions

RESOLVED FURTHER that except as hereby amended and supplemented the Prior

Resolutions remain in full force and effect and

RESOLVED FURTHER that any Authorized Officer together with other proper officers of the

Company including without limitation those authorized from time to time pursuant to the

Companys Asset and Liability Management Policy and the standards and procedures from time

to time

in

effect thereunder is hereby authorized to negotiate enter into execute and deliver

any and all additional agreements any undertakings or other documents or supplemental

agreements on behalf of the Company including without limitation filings or applications with

banking regulators securities regulators or stock exchanges domestic or foreign and to take

any other actions in each case as such Authorized Officer or other proper officer deems to be

necessary or advisable in connection with the issuance of the Preferred Stock the LLC

Preferred Interests or the SPE Securities or to further the intent of these resolutions or the Prior

Resolutions subject to the limits set forth in these resolutions




HIGHLY CONFIDENTIAL



Appendix Schedule of Officer Elections Promotions Transfers and Other Changes

Dual Officer Elections

Bellavla Christopher J from none to First Vice President effective

February 21 2006

Officer Terminations flncl i Resignations

Chapman Craig J Group President to none effective January 31 2006

Vanasek James Executive Vice President to none effective January 3 2006

Dual OfFicer Terminations including Resignations

Grady Kevin J Assistant Secretary to none effective January 18 2006

MerylSeely K Assistant Secretary to none effective January 31 2006




HIGHLY CONFIDENTIAL



ix I Approval of Nominees for Election the Board by Shareholders

OLVED that the Governance Committee hereby recommends to the Washington Mutual

Inc Board of Directors the Board that the Board shall propose to the holders of the

Corporations Common Stock at the 2006 Annual Meeting of the Corporations shareholders

the election of the following persons to serve as directors of the Corporation for a threeyear

term expiring at the Corporations Annual Meeting of Shareholders

in

2009

Kerry illi er

Michael MurphyThomas C Leppert

Charles Lillis

Orin C Smith

131168 22 WM Confidential Limited AccessAPPROVED BY THE BOARD OF DIRECTORS APRIL 18 2006


HIGHLY CONFIDENTIAL


AttorneyClient Communications

WASHINGTON MUTUAL INCDIRECTORSBOARD OF MINUTES

The Board of Directors of Washington Mutual Inc the Company held its regular

December meeting on Monday December 17 2007 and Tuesday December 18 2007 in

Seattle Washington Present were Farrell Frank Killinger Leppert Matthews Montoya

Murphy Osmer McQuade Pugh Reed Smith and Stever Mr Killinger presided Also

present at the beginning of the meeting on Monday evening were Messrs David and

Landefeld of the Company and arc Gamson a management consultant

Executive Session Talent Review and Managemen

At Mr Killingers request Mr Landefeld reviewed the process leading up to the

Boards decision at its special meeting in December He distributed a document setting

forth a chronology of events After a thorough and active discussion r Landefeld le the

meeting

Mr Killinger submitted a report with regard to assessment of capabilities and the

potential development or succession of the Executives of the Company other than the Chief

Executive Officer CEO Messrs Killinger David and Gamson left the meeting and the

Board discussed succession planning for the CEO position Thereafter the Board recessed

the meeting until the following day

Liti ation and Investigation

Mr Lillis participating telephonically by means of a conference telephone enabling

all participants to hear one another joined the meeting at the beginning of the Tuesday

session and all other Directors continued to attend Also present at the beginning of the

Tuesday session were Messrs Landefeld and Rotella of the Company and Lee Meyersonand Barry Ostrager of Simpson Thacher Bartlett LLP The Companys Board of Directors

met

in joint session with the Board of Directors of Washington Mutual Bank WMB which

is the Companys primary banking institution subsidiary

Mr Landefeld introduced Messrs Meyerson and Ostrager for an update of the legal

advice that they had given at the Boards December 10 2007 and November 19 2007

meetings Mr Ostrager reported on This material has been redacted

Following an extensive discussion Messrs Landefeld

Rotella Meyerson and Ostrager le

the meeting and the Board went into executive session

Subsequently at the Boards request Mr Landefeld joined the executive session and the

Board continued its thorough discussion of the subjects of Mr Ostragers report

Mr Landefeld This material has been redacted

Approval of December 10 Corrected November 1 Meeting Minutes

Mr Kllli er submitted the minutes of the December 10 2007 meeting and a

proposed revision of the minutes of the November 19 2007 meeting to show correctly that

the Board continued in executive session after Messrs Meyerson and Ostrager ceased to

attend On motion duly made and seconded the Board approved the minutes of the

November 19 2007 as corrected and the minutes of the December 10 2007 meeting

166507 WM Confidential Limited Access

APPROVED BY THE BOARD OF DIRECTORS JANUARY 15 2008


HIGHLY CONFIDENTIAL



Financial Reports and Plans

Messrs Casey Cathcart David Rotella and Lynch of the Company joined the

meeting along with John McMurray of WMB The materials submitted to the Board included

Mr Caseys written Financial Review for November 2007 reporting on the Companys

environment income statement overview balance sheet overview segment summary

specific information for the Retail Bank Card Services Home Loans Commercial groups

and an Appendix of information with regard to direct expenses and headcount and the

delinquency and net chargeoff trend The Board also received Mr Caseys written

Financial Report with regard to the Companys financial performance in November 2007

which included the following sections Financial Highlights eg Interest Income Interest

Expense Net Income Profitability Asset Quality Capital Adequacy and Key Business

Indicators Noninterest Income f Noninterest Expense comparing November 2007 with

October 2007 Consolidated Statements of Financial Condition and Net Interest Spread

and Margin and his similar report with regard to the financial performance of the Companys

principal banking subsidiary WMB in this period

As background for the Boards review of the financial and operating plan for 2008

Mr Casey submitted an updated projection of earnings in the form of a waterfall chart

showing factors that may cause the Companys earnings for the fourth quarter of 2007 to

differ from earnings for the third quarter of 2007 including a larger average amount of

earning assets for the fourth quarter of 2007 In addition gain on sale OS and Retail

Banking fees are expected to be larger for the fourth quarter of 2007 than for the third

quarter Card Services income may be reduced by a larger loan loss provision for the fourth

quarter than for the third quarter Expenses are expected to increase in the fourth quarter

due to a onetime charge for business resizing costs Net chargeoffs of assets may be

significantly larger for the fourth quarter than for the third quarter Earnings are now

expected to be reduced by an impairment of the value of intangible assets arising from prior

mortgage business acquisitions In response to a question by Mr Frank Mr Casey

reported on possible negative events that are incorporated into the assumptions underlying

the forecast for the fourth quarter Mr Casey also described the indices for adjustments of

interest rates on certain assets In response to a question by Mr Reed Mr Casey reported

that management had been aware of the possibility of a widening of the interest rate spread

between the Fed Funds rate and the 3month London InterBank Offered Rate LIBORbut had considered this possible widening to be improbable Mr Killinger noted that the

current spread between the Fed Funds rate and LIBOR is more than two standard

deviations from the statistical norm

With regard to the planning environment Mr Casey noted that the 2008 plan

assumes sluggish growth in the gross domestic product that the Companys annual loan

loss provision in 2008 will be much larger than in 2007 and that the Companys loan

chargeoffs will increase to more than $38 billion in 2008 The plan assumes the Fed

Funds interest rate will decline but that the full benefit of this decline will be delayed due to

a wider spread between the Fed Funds rate and the 3month LIBOR The mortgage market

is projected to contract and home prices are expected to decline Home Loans production is

projected to decline from $122 billion for 2007 to $72 billion for 2008 and production of

conforming loans is projected to be approximately 50 percent lower for 2008 than for 2007

Accordingly the Home Loans group has further reduced its number of employees GOS is

expected to be limited

Mr Casey described interest rate and home price assumptions underlying the

current plan for 2008 In the base case the Fed Funds rate would decrease to 400 percent

171285 2



HIGHLY CONFIDENTIAL



by March 2008 and then rise In the base case the assumption with regard to the yield

curve between the 3month LIBOR and longterm interestrate exchange agreements will

conform to the forward interest rate curve in the financial markets Home prices are

projected to decline In response to questions by Mr Leppert Mr Casey reported that the

assumptions in the plan reflect expected trends in housing prices in each metropolitan

statistical area SA instead of each state and that management may consider more

specific information with regard to the prices of individual homes within a SA Mr Cathcart

noted that loan vintage and the borrowers credit scores are better indicators of loan

performance Mr Rotella reported on the practice of checking the value of the subject

property for each loan as loans move through foreclosure and Mr Casey reported on the

consideration of a stress scenario assuming larger depreciation in home prices and noted

that the general loan loss provision cannot be determined as the sum of projections for

individual loans

Mr Casey submitted a waterfall chart showing the anticipated effects of certain

factors that are expected to cause a difference between the 2007 forecast and the current

2008 plan These factors for 2008 include an expansion of 23 basis points in the net

interest margin I an increase of more than $2 billion in the Companys average

earnings assets the expected absence of certain losses on trading securities compared to

2007 a decline in the riskadjusted rate of return in the Card Services group an increase in

GOS and Retail Banking fees a decrease in expenses and an increase in the loan loss

provision for 2008 In response to a question by Mr Murphy Mr Casey reported that the

Company has written off 100 percent of the value of intangible assets arising from prior

mortgage business acquisitions Mr Rotella reported on plans for the closure of certain

Retail Banking stores in January In response to questions by Mr Smith Mr Rotella

reported on the number of Retail Banking stores that continue to receive special attention

from Executives and reported on plans to open stores for the Retail Banking group inside

existing loan offices of the Home Loans group In response to a question by Mr MurphyMr Rotella reported on the number of Retail Banking stores that will continue to be open in

one market after the closures

in January In response to questions by Ms Pugh Mr Caseysubmitted an updated forecast of the amount of the loan loss provision the portion of this

amount projected for Card Services and the projected effect of securitizations

In responseto a question b

y Mr Reed Messrs Casey and McMurray reported on issues relating to the

loan loss provision for the Card Services group

Mr Casey submitted a report on highlights of the current 2008 plan In response to a

question by Mr Leppert Mr Casey noted a projected result of decreasing expenses while

increasing total revenue Mr Killinger noted the magnitude of the projected increase in

Retail Banking fees In response to a question by Mr Reed Mr Rotella reported on the

reliability of the projection for Retail Banking fees Mr Casey noted the possibility of

quarterbyquarter variations in loan loss provisions In response to a question by Mr ReedMr Casey reported on the effect of replenishing the loan loss provision for loans charged

off In response to questions by Mr Matthews Messrs Casey Rotella and Killinger

reported on issues relating to alternative scenarios that may affect loan loss provisions

Retail Banking fees and earnings of the Card Services group Mr Casey also submitted a

waterfall chart showing factors responsible for the increase in tangible equity since the end

of the third quarter of 2007 and projected small changes in

2008

With regard to housing cycles Mr McMurray submitted information on home price

trends in

the United States as a whole in one state and in a smaller municipal area since

1980

In response to a question by Mr Leppert Mr McMurray reported that the information

171285 3



HIGHLY CONFIDENTIAL

WIW Confidential Limited Access


with regard to home prices in his report was expressed in terms of nominal values He also

submitted pie chart showing that three categories of loans amounting to only 16 percent

of the total dollar amount of loans generated 51 percent of the dollar volume of loanchargeoffsin the third quarter of 2007 He submitted a graph comparing loan delinquencies for the

Company with industry averages for singlefamily loans paymentoption adjustable rate

loans home equity loans and subprime loans originated in each month from January 2005

to September 2007 In

most categories delinquencies on the Companys loans are lower

than industry averages

Mr McMurray submitted information on remaining residential mortgage loss

sensitivity Management applied a credit loss model developed by Standard Poors

SW to the Companys loans In response to questions by Ms Pugh r McMurray

reported that the SP model depends more heavily on aggregate data whereas the

Companys model uses more particularized data Mr Casey identified other factors affecting

loan losses and reported on stress tests and Mr Killinger noted investment bankers advice

that the Company has set a new standard for stresstesting In response to questions by

Mr Matthews Mr Casey agreed to monitor and report on the relationship between capital

and loans loss provisions and distinguished the loan loss provision in each quarter from the

total amount of loss expected to be experienced over the life of a loan portfolio Mr Casey

also noted the significance of changes in consumer behavior and Mr Cathcart noted a

possible effect of a rapid deterioration in credit quality Messrs Rotella and Cathcart

reported on the monitoring of nonperforming assets and chargeoffs and Mr Casey agreed

to provide further information to the Board about these items and the loan loss provision In

response to a request by Mr Leppert Mr Cathcart agreed to provide information regularly

with regard to total delinquencies and chargeoffs In response to questions by Mr Lillis

Messrs McMurray and Casey reported on the incorporation of yield curve assumptions into

the optionadjusted spread model and into the projections of the NIM and the value of

residuals remaining from loan sales as opposed to projections of changes in the allowance

for loan and lease losses home equity loan delinquencies or net chargeoffs and MrRotella noted the effect of a lack of liquidity in the secondary markets In response to a

question by Ms Pugh Mr McMurray noted initiatives to restrict exposure to certain lines of

credit and to use workouts and modifications to mitigate losses Mr Rotella noted research

into the possibility of selling certain assets and Mr McMurray further noted a leading

banking competitors discontinuation of certain lending operations

Mr Casey submitted information with regard to the NI M The 3month LIBOR

continues to be disconnected from the Fed Funds rate notwithstanding European

governments attempts to increase liquidity The deposit pricing market is highly

competitive Nonaccrual loans put pressure on the NIM Management initiatives include

lengthening the maturities on liabilities

Mr Casey submitted a waterfall chart indicating that direct expenses in the 2008 plan

will be lower than in the 2007 forecast Direct expenses in the 2007 forecast include

charges for impairment of the value of intangible assets arising from prior mortgage

business acquisitions and restructuring charges for which there are no counterparts in

the

2008 plan The 2008 plan includes increases in direct expenses for Retail Banking stores

but incorporates projected decreases in Home Loans expenses and the expenses of central

corporate operations in 2008 as a benefit of restructuring in December 2007

At Mr Lepperts request Mr Casey returned to the subject of direct expenses and

headcount as set forth in his November 2007 Financial Review In response to a question

by Mr Leppert Mr Casey noted that this November 2007 Financial Review did not show

171285 4



HIGHLY CONFIDENTIAL



the most recent reduction in the number of Home Loans employees in December 2007 and

reported on the contemporary need to hire additional loan servicing personnel Mr Casey

noted an increase in the expenses of administering real estate acquired as a result of

foreclosure or receipt of a deed in lieu of foreclosure and Mr Rotella reported on the

conformity with the accounting standard for loan origination costs Mr Casey submitted a

waterfall chart showing the anticipated effects of actions to accomplish further reductions in

expenses which are to be evaluated These actions include organizational rationalizations

and consolidations and the use of centers of excellence The Companys efficiency ratio is

projected to improve to 50 percent by the end of 2008

Mr Casey submitted information on housing and interest rate scenarios Earnings

are expected to improve from a loss

in

2008 to a profit in 2009 and a significantly larger

profit in 2010 The annual loan loss provision in this base case is projected to decline

significantly in 2009 and more significantly in 2010 In an alternative recessionary scenario

the Fed Funds rate is projected to be significantly lower

in 2008 2009 and 2010 but the

annual loan loss provision is projected to be significantly higher in 2008 to decline only

slightly in 2009 to decline in 2010 to a level that is twice as high as in the base case for

2010 and not to normalize until 2011

In response to questions by Mr Stever Mr Casey reported on the incorporation of

information for each business segment and on targets for 2008 r Killinger noted a

possibility of reassigning the responsibility for a portfolio if

the plan for a business groupwere revised to exclude the costs of servicing and managing the portfolio and Mr Casey

suggested that management may return to the Board with regard to this issue Mr Rotella

indicated that management also will provide information related to the sensitivities of

earnings drivers for certain business segments In response to a question by Mr Matthews

Mr Casey reported that the plan assumed continuation of the $015 cent per share quarterly

dividend in the adverse recessionary scenario and Mr Killinger committed to provide certain

information with regard to business segment projections On motion duly made and

seconded the Board approved the 2008 plan for the Company as a whole subject to

adjustment in projections for individual business segments and finalization of the

assumption with regard to the yield curve between the 3month LIBOR and longterm

interestrate exchange agreements in the base case to conform to the forward interest rate

curve in

the financial markets on the date when the business segment plans are finalized

Voice of the Customer Report

Mr Killinger submitted the Voice of the Customer Report The report described the

results of initiatives to improve customer loyalty and reduce the number of customer

complaints In response to a comment by Ms Osmer McQuade Mr Rotella committed to

follow up on issues relating to the performance of Small Business Banking

Economic Cornmenta

Mr Killinger submitted Mr Lon brakes economic outlook commentary for

December The written commentary included a summary of recent developments analysis

and projection of trends Mr Killinger noted that more negative scenarios include lower

interest rates In response to a comment by Mr Leppert r Killinger noted that the

commentary focuses on matters of concern to consumers and noted the significance of

strong exports Mr McMurray left the meeting

171285 5



HIGHLY CONFIDENTIAL



RegulatoEy to

Mr Killinger submitted Mr Robinsons report on regulatory matters The report

included information about matters requiring Board attention and the regulatory

examinations Ms Osmer McQuade noted an emerging issue relating to Small Business

lending

Investor Relation

Mr Killinger submitted the monthly report by the Investor Relations Department The

report reflected trading activity ownership Investor Relations events and analyst

commentary

Media I ics o

Mr Killinger submitted a Media Analytics Report The report summarized press and

other media coverage of the Company inOctober 2007 and compared the frequency of

coverage with five competitors

Finance Committee Rego

Ms Pugh submitted the report of the Finance Committee In addition to all Directors

who are members of the Committee all but two of the other Directors also attended this

meeting of the Committee as observers The Committee met in joint session with the

Finance Committee of WMB

The Committee reviewed an update on capital including the results of the offering of

$30 billion

in

Series R 775 NonCumulative Perpetual Convertible Preferred Stock As a

result of the offering the Company has excess capital to withstand a wide range of

scenarios The Committee reviewed an update on liquidity including actions with regard to

escrow deposits and the results

in

the covered bond markets of recent downgrades in the

ratings for WMB and the Company The Committee reviewed an update on credit the

substance of which was subsequently provided to the full Board by Messrs McMurray and

Cathcart as described above

The Committee completed its annual review and approval of the Asset and Liability

Management Policy

Governance

CommitteeMrReed submitted the report of the Governance Committee The Committee met in

joint session with the Governance Committee of WMB The Committee reviewed matters

related to Director development in preparation for the retirement of Mrs Farrell

Preparations are underway for other members of the Committee to meet with a candidate

with whom r Reed already had a preliminary interview Mr Reed noted some of the

qualifications of this candidate

The Committee reviewed a proposal by a former director of a small savings and loan

institution in Utah who had requested that he be considered as a candidate for nomination

to the Companys Board of Directors Having reviewed the letter from this proponent the

Committees consultant Heidrick Struggles International Inc advised the Committee that

the proponent is not among the most qualified candidates currently being considered The

Committee also found that the proponent is

not among the most qualified candidates

currently being considered and directed that a response be sent to him In response to a

171285 6



HIGHLY CONFIDENTIAL



question by Mr Stever Mr Reed reported that the qualifications of other potential

candidates are also being reviewed

Appointment of Committee Members and Presiding Director

Mr Reed reported that the Governance Committee reviewed the assignment of

committee members and chairs and the designation of a presiding Director The

Committee recommended the appointment of Directors to committees and the appointment

of a presiding Director without change from the current assignments and designation except

for the appointment of Mr Leppert as Chair of the Corporate Relations Committee effective

as of January 1 2008 To assist Mr Leppert with this transition Mrs Farrell has indicated

that for an additional period of up to six months after the expiration of her current term in

April 2008 she

is

available to serve on the Board

if necessary and

if she is reelected at the

2008 annual meeting Thus the Corporate Relations Committee would consist of Mr

Leppert Chair Mrs Farrell Ms Montoya Ms Pugh and Messrs Murphy and Stever the

Audit Committee would continue to consist of Mr Frank Chair and Messrs Leppert

Matthews Murphy Reed and Smith the Corporate Development Committee would

continue to consist of Mr KiUin er Chair and Messrs Frank Lillis Matthews and Stever

the Finance Committee would continue to consist of s Pugh Chair Mrs Farrell MsMontoya Ms Osmer McQuade and Messrs Frank Lillis Murphy and Reed the

Governance Committee would continue to consist of Mr Reed Chair Mrs Farrell MsOsmer McQuade and Messrs Leppert Matthews Smith and Stever the Human

Resources Committee would continue to consist of Mr Stever Chair Ms Osmer

McQuade and Messrs Frank Lillis and Matthews and Mr Frank would continue to serve

as the Presiding Director Mr Killinger recused himself from voting or consideration of the

appointment of a Presiding Director On motion duly made and seconded the Board

appointed its members to committees and appointed a Presiding Director effective as of

January 1 2008 as recommended by the Committee

Approval of Compensation for Board Committee Members and Presiding Director

Mr Reed reported that the Governance Committee reviewed the report of Towers

Perrin with regard to the compensation of Directors in comparison with the compensation of

Directors of 14 other large banking companies The Committee recommended an increase

of $5000 in the compensation of the Chair of the Audit Committee and 20000 in the

compensation of the Presiding Director Thus the annual cash retainer would continue to

be $60000 the annual restricted stock grant to be granted on January 22 2008 with

restrictions to released after one year would continue to be 70000 for a number of shares

to be determined according to the closing price on January 22 2008 the economic value of

the annual stock option grant to be granted on January 22 2008 and to vest after one

year would continue to be $30000 for a number of shares determined

in accordance with

the Companys policies and practices for granting of stock options the fee for attendance at

a purely telephonic Board or Committee meeting other than a meeting of the Corporate

Development Committee would continue to be $750 per meeting the fee for attendance at

other Board or Committee meetings other than meetings of the Corporate Development

Committee would continue to be $1500 per meetin the additional annual retainers would

be $20000 for the Chair of the Audit Committee 7500 for the Vice Chair of the Audit

Committee $10000 each for the Chairs of the Finance Committee the Governance

Committee and the Human Resources Committee $7500 for the Chair of the Corporate

Relations Committee $6000 for members of the Corporate Development Committee in lieu

of meeting fees and $25000 for the Presiding Director Mr Frank left the meeting during

171285 7



HIGHLY CONFIDENTIAL



the voting on this matter On motion duly made and seconded the Board approved this

compensation schedule Mr Frank rejoined the meeting

Remainder vi ri omn ort

Mr Reed reported that the Governance Committee reviewed report on four

shareholder proposals This material has been redacted

The Committee its checklist and determined to reschedule certain items

The Committee also reviewed plans for providing additional education for Directors and

gave preliminary consideration to certain changes

Clarification Officer t ri

Mr Killinger submitted resolutions reflecting changes in the composition of the group

of officers who have authority to perform significant policymaking functions of the Companyand the group of officers who participate in major policymaking functions within the

meaning of Federal Reserve Regulation motion duly made and seconded the Board

adopted these resolutions A copy of the resolutions will be kept in the minute book as an

appendix to ts minutes

Officer Elections Promotions Transfers

motion duly made and seconded the Board approved an officer promotion A

copy of schedule of this change as submitted to the Board will be kept in the minute book


Executive Session with Committee

Messrs Casey Cathcart Rotella Lynch and left the meeting Mr Stever

submitted the report of the Human Resources Committee The Committee met in joint

session with the Human Resources Committee of WMB

The Committee reviewed an update on changeincontrol agreements and

employment contract changes and on plans for related public filings The Committee

reviewed the status of investments held by the Cash Balance Pension fund and determined

that these investments are satisfactory The Committee approved the terms of an

agreement relating to the retirement of the former Chief Legal Officer and the terms of

employment for the interim Chief Legal Officer The Committee discussed potential

compensation strategies for 2008 in light of the dramatic loss of retention value in the

Companys stock vehicles for executives Mr David left the meeting Board continued

a discussion which it had commenced on Monday of the assessment of capabilities and

potential development or succession of the Executives of the Company other than the CEO

Remainder Executive Session of Boa

Mr Killinger left the meeting The Board discussed the succession planning for the

CEO position The Board also determined to require management to submit reports at the

Boards January 15 meeting with regard to whether the performance of the Retail Banking

and Card Services group may deteriorate The Board also determined to require enhanced

171283 8

APPROVED BY THE BOARD OF DIRECTORS JANUARY 152008


HIGHLY CONFIDENTIAL



regular reporting with regard to housing price appreciation credit losses capital and the

cumulative loss expectation for loans held for investment

There being no further business the meeting was adjourned

Appendices

Designation of Section 16Reg Officers

Schedule of Officer Elections Promotions Transfers and they Changes

171285 9



HIGHLY CONFIDENTIAL



Appendix Designation of Section 16Reg 0 Officers

ecification of Authority of Officers

WHEREAS the securities of Washington Mutual Inc the Company are subject to the

Securities Exchange Act of 1934 as amended the 1934 Act and the regulations promulgated

thereunder

WHEREAS under Section 16 of the 1934 Act officers of the Company are subject to

certain limitations on transactions in securities

WHEREAS the Company also is the holding company of a federal savings association

chartered and regulated by the Office of Thrift Supervision OTS and of a bank chartered

under the laws of the State of Washington with deposit insurance provided by the Federal

Deposit Insurance Corporation FDICWHEREAS OS regulations as codified at 12 CF Section 56342 and IC

regulations codified at 12 CRR Section 3373 and Part 349 place certain limitations on loans

to executive officers of the Company and its affiliates

WHEREAS officers of the Company and its affiliates who do not participate in the major

policymaking functions of the Company and who are expressly excluded from participating in

such functions by resolution of the boards of directors of the Company and of each such affiliate

are not considered executive officers for these purposes

WHEREAS this Board has specified the authority of its officers in the Bylaws of the

Company and

WHEREAS this Board intends further to clarify the authority of certain officers

NOW THEREFORE IT RESOLVED pursuant to a review of the duties and functions

performed by senior officers that the following persons are deemed

by the Board to meet the

definition of o rcersfor purposes of Section 16 of the 1934 Act and the regulations promulgated

thereunder

Todd Baker James B Corcoran Stephen J Rotella

Melissa J Ballenger Daryl D David David C Schneider

Alfred R Brooks Debora D Horvath Anthony F Vuoto

Thomas W Casey Kerry K Killinger

Ronald J Cathcart Stewart M Landefeld

RESOLVED FURTHER that i no officer of the Company other than the individuals

listed below shall have authority to participate in the major policymaking functions of the

Company and ii no officer of any subsidiary of the Company other than the individuals listed

below shall have authority to participate in the major policymaking functions of the Company

Washington Mutua Inc

Todd Baker James B Corcoran Stephen J Rotella

Melissa J Ballenger Daryl D David David C Schneider

Alfred R Brooks Debora Horvath Anthony F Vuoto

Thomas W Casey Kerry K Killinger Robert J Williams

Ronald J Cathcart Stewart M Landefeld

Subsidiaries of Washington Mutual Inc

No officers except persons who are also the Companys officers as specified above

171285 10



HIGHLY CONFIDENTIAL



Appendix B Schedule of Officer Elections PromotLoons Transfers Other Changes

Officer Changes Promotions or Transfers

Scully James Vice President to First Vice President effective November 1 2007

17128511



HIGHLY CONFIDENTIAL



WASHINGTON MUTUAL INCBOARD OF DIRECTORS MINUTES

The Board of

Directors of Washington Mutual Inc the Company began its regular

February meeting at 604 PM on Monday February 25 2008 in Seattle Washington

Present at the beginning of the Monday session were Farrell Frank Killinger Leppert

Lillis Montoya Murphy Osmer McQuade Pugh Reed Smith and Stever Mr Killinger

presided Also present were Messrs Baker Casey Cathcart Landefeld Rotella Schneider

and Lynch secretary of the Company John McMurray of Washington Mutual Bank

WMB and Stephen Chazen The Board of

the Company met in joint session with the

Board of Directors of WMB which is the Companys primary banking institution subsidiary

Report on Credit

Mr Killingerexplained the decision to provide updated information on developments

in the housing and credit environment and on systems to monitor and manage credit

conditions in lieu of previously scheduled sessions on other subjects Credit conditions in

the housing market are of critical importance in the current financial environment Credit

costs continue to rise The normal annual amount of such costs for the Company is in the

$2 billion $25 billion range The Companys actual costs were less than this level until

mid2007 and the Company continues to earn a pretax income of approximately $6 billion

$65 billion in

the absence of such costs It now appears however that credit costs in 2008

might rise further than previously expected and erode earnings As of

September 2007 the

expectation was that credit costs would amount to only $45 billion in 2008 Higher credit

costs consume capital and might result in changes to regulatory or other ratings To guard

against these risks the Companys management decelerated mortgage lending in

anticipation of a slowdown in the housing market despite the fact that mortgage loans

normally are relatively lowrisk assets The key open issues now relate to the extent and

duration of the housing market downturn and whether to raise additional capital

Management is pursuing the possibility of segregating some mortgages to minimize the

dilution of current shareholders stake in the enterprise

Mr McMurray reported on the background of current developments on geographic

variations and on portfolio performance and provisions Credit risk is associated with

investing and deposittaking as well as lending The basic terms of the lending business

may include either riskbased or average pricing Reasons for taking credit risk include the

fact that historically lenders generally earn an expected return and diversification can be

beneficial because credit risk generally is not highly correlated with interest rate risk To

limit the extent of credit risk portfoliolevel measures supplement operational controls and

procedures at the loan transaction level leaving the portfolio of loans held for investment as

the most important retained position Factors affecting credit risk include the market

environment collateral characteristics and quality and borrower characteristics

Mr McMurray noted the predominant importance of residential mortgage loans in the

Companys current situation but reported also on credit factors affecting the performance of

credit cards commercial real estate loans and small business loans Losses on credit

cards are very sensitive to unemployment and are expected to increase from the levels of

recent years which have been very low The Companys commercial real estate loans are

performing well and losses though increasing are within expectations Delinquencies and

losses on small business loans are in excess of expected levels but balances are relatively

low only $14 billion in outstanding balances and another $14 billion in lines of credit not

yet drawn down and multiple actions are underway to address performance issues


APPROVED BY THE BOARD OF DIRECTORS MARCH 17 2008


HIGHLY CONFIDENTIAL

W Confidential Limited Access


With regard to the performance of residential mortgage loans Mr McMurray

submitted a chart showing trends since 1977 in housing prices measured by First American

Real Estate Solutions FARES for metropolitan statistical areas MSAs and indicating

that the national average housing price never suffered a yearoveryear decline during that

period until 2007 Individual groups of

five MSAs outperformed or underperformed the

national average and sometimes certain underperforming groups of MSAs experienced

yearoveryear declines in housing prices but very few MSAs after 1999 suffered such

declines until 2006 In response to a question by Mr Leppert Mr McMurray reported that

2007 was probably the first year of a national average housing price decline since the Great

Depression

Mr McMurray submitted a map showing the locations of properties securing the

Companys aggregate real estate loan portfolio including prime singlefamily residential

mortgage loans loans originated through a subprime mortgage channel SMC loanscommercial loans and home equity loans More than 30 percent of this aggregate portfolio

now is in seven counties Mr McMurray submitted another map showing that the credit card

portfolio is more geographically diversified and two additional maps showing areas that

have experienced certain percentages of cumulative housing price depreciation according to

FARES data for the period from the peak in each area to January 2008 This data indicates

that housing prices are declining significantly in most of the seven counties where more than

30 percent of the Companys real estate loan aggregate portfolio is located

In response to

questions by Mr Leppert Mr McMurray reported that the peak generally was in 2005 or

2006 and noted continued rises in housing prices in

certain other areas

Mr McMurray submitted a chart comparing and contrasting yearoveryear trends in

housing prices as measured by FARES and alternatively by the Office of Federal Housing

Enterprise Oversight OFHEO since 1977 and

by Standard Poors CaseShillerCaseShillersince 1988 in the Southern California MSA that is the location of the largest single

concentration of loans in the Companys aggregate real estate loan portfolio He reported

on OFHEOs data sources In response to aquestion by Mr Leppert Mr McMurray

reported that FARES data is updated frequently In response to a question by Mr Frank

however Mr McMurray reported that there are shortcomings in each of the FARESOFHEO and CaseShiller indices and that an update of OFHEO data is pending Inresponse to a question by Mr Killinger Mr McMurray reported on the anticipated timing o

f

the update of OFHEO data and noted that the OFHEO and FARES indices areunitweighted

in that each valuation pair is given the same weight all else being equal

whereas the CaseShiller index is valueweighted in that a given transaction pair is given a

weight proportional to the value of the home Most institutions have historically used the

index published by the official U S government source OFHEO In response to a question

by Ms Pugh Mr McMurray reported that FARES now has data for all categories of

mortgage loans In response to a question by Mr Killinger Mr McMurray reported on the

number of years for which a chart provided information In response to

a question by MsPugh Mr McMurray reported that of the three indices the OFHEO index has the best

geographic and historical data coverage In response to a question by Mr Rotella Mr

McMurray reported on the validity of one index In response to a question by Mr Killinger

Mr McMurray noted a historical weakness

in the FARES information and advised that

based on the frequency of revision the statistical base

is less rigorous for FARES than for

OFHEO or CaseShiller Mr Rotella noted the relatively small data set of this index in past

years In response to a question by Mr Frank Mr McMurray noted the number of years

that may pass prior to a return to home price appreciation and submitted information about

the most recent yearoveryear change in prices In response to a comment by Mr Chazen




HIGHLY CONFIDENTIAL



Mr McMurray reported that OFHEOs reports lag as much as four months behindCaseShillerreports

Mr McMurray submitted a chart comparing and contrasting cumulative changes in

housing prices as measured by FARES and OFHEO since 1976 and by CaseShiller since

1987 in this Southern California MSA Historically there have been relatively long intervals

of time between troughs and peaks in the housing market Credit cycles have affected the

quality of data

Mr McMurray submitted additional information about this Southern California MSAincluding unemployment not seasonally adjusted and housing inventory since 1990 net

migration since 2001 and quarterly fluctuations in yearoveryear housing price changes

since the beginning of 2006 as measured by OFHEO through a date in 2007 and as

subsequently forecast at Moodys Economycom MECOM and

in the base case and the

creditstressed scenario of the Companys 2008 financial plan Unemployment is especially

relevant to Card Services In response to questions by Mr Reed Mr McMurray reported on

past emigration from this MSA reported that the housing price forecasts are new and

cautioned that trends are likely to follow forecasts in general direction but not in exact timing

Mr Cathcart reported that there are adjustments in the Companys forecasts andnoted the

utility of the OFHEO index In response to a question by Mr Leppert Mr McMurray noted

that unemployment appears to be moderating in this MSA but both he and Mr Caseycautioned that unemployment may worsen in this MSA Mr Rotella reported on a large and

abrupt negative change in the MECOM forecast of housing price depreciation for this MSAMr Killingernoted the possibility that the trend in many MSAs toward such housing price

depreciation might reflect an asset price revaluation which would be relatively unlikely to be

related to unemployment In response to comments by Messrs Leppert and Frank

however Mr Killinger noted the significance of the linkage between home equity lendin

and consumer spending in the broader economy and Mr Casey noted possible future

trends

For purposes of comparison Mr McMurray submitted a chart comparing and

contrasting yearoveryear trends in housing prices as measured by FARES and OFHEOsince 1977 and by CaseShiller since 1988 in a Pacific Northwest MSA where the Companyhas a concentration of such real estate loans eg prime singlefamily residential mortgage

loans SMC loans commercial loans and home equity loans This market

is relatively

stable currently In response to a question by Mr Reed Mr McMurray noted that the

average longterm trend in housing prices from 1976 to 2008 according to FARES data for

this Pacific Northwest MSA is the same as for the Southern California MSA where as noted

above the Company has its largest single concentration of such real estate loans For

this Pacific Northwest MSA Mr McMurray also submitted charts comparing and contrasting

cumulative change in housing prices as measured by FARES and OFHEO since 1976 and

by CaseShiller since 1990 and showing additional other information including

unemployment not seasonally adjusted since 1990 net migration since 2001 and

quarterly fluctuations in yearoveryear housing price changes since the beginning of 2006

as measured by OFHEO through a date in 2007 and as subsequently forecast at MECOMand in the base case and the creditstressed scenario of the Companys 2008 financial plan

He noted the lack of information about housing inventory prior to 2006 in this Pacific

Northwest MSA

Also for purposes of comparison Mr McMurray submitted a chart comparing and

contrasting yearoveryear trends

in housing prices as measured by FARES since 1977 and

by OFHEO since 1978 in a Central California MSA in which the Company has another

concentration of such real estate loans He noted the lack of any CaseShiller data for this




HIGHLY CONFIDENTIAL



Central California MSA For this MSA he also submitted charts comparing and contrasting

cumulative change in housing prices as measured by FARES since 1976 and by OFHEOsince 1977 and showing other information including unemployment not seasonally

adjusted since 1990 housing inventory since 1997 net migration since 2001 and quarterly

fluctuations in yearoveryear housing price changes since the beginning of 2006 as

measured by OFHEO through a date in 2007 and as subsequently forecast at MECOM and

in

the base case and the creditstressed scenario of the Companys 2008 financial plan He

noted that immigration into this Central California MSA continues in part as a result of the

attraction of its relatively low median home price

Mr McMurray submitted his opinion of the prerequisites for a peak inmortgagerelatedlosses including liquidity improvement a rise in prepayments a slowing of the rate

of

housing price declines and improvements in the economic outlook He outlined federal

policy initiatives to increase liquidity especially for housing and submitted his opinion of the

expected impact of those initiatives Investors increased demand for US Treasury

securities has decreased the interest rates on such securities to which the rates on

adjustable rate mortgage loans ARMS are indexed This decrease thus is reducing the

risk of default on such ARMs

With regard to initiatives to increase liquidity through governmentsponsored

enterprises GSEs Mr Killinger noted that the housing GSEs are facing high credit

losses and Mr Rotella noted increases in the fees charged by these GSEs Mr Leppert

noted possible changes in federal bankruptcy laws that may adversely affect the supply of

liquidity for housing

Mr McMurray submitted a portfolio summary showing composition and delinquency

rates as of January 2007 and January 2008 for prime singlefamily residential mortgages

SMC loans home equity loans the managed balance of creditcard receivables multifamily

residential and commercial real estate loans and other commercial and retail small business

loans He also submitted information on mortgage concentration at major banking

institutions among which the Company has the highest mortgage loan portfolio

concentration He noted that mortgage loans had typically been one of the safest assets in

the market over the years Mr Killinger noted that traditional thrift institutions have

disappeared In response to a question by Mr Frank Mr Killinger noted that Mr

McMurrays information on mortgage loan portfolio concentration did not include mortgage

servicing rights MSRs or residuals resulting from the sale of residential mortgage loans

and Mr Casey noted the importance of

mortgagebacked securities investments at some

banking institutions

Mr McMurray submitted his assessment of the effect on portfolio credit

performance of certain factors in the financial environment including lending industry

guidelines and housing price trends in past years and the unprecedented lack of liquidity

He also noted concentrations

in

certain products and geographic markets and noted past

actions by management to contain risk including tightening lending guidelines earlier than

many competitors in the industry In response to a question by Mr Reed Mr Casey noted

expenses that would have been incurred as a result of increased reliance on credit

enhancements In response to a comment by Mr Baker Mr McMurray noted that credit

enhancements can be provided by monoline mortgage insurance companies whose

securities have recently been downgraded by investment rating agencies In response to a

comment by Mr Killinger Messrs Casey and McMurray noted issues associated with a

strategy of betting against an ABX index Mr McMurray also reported on the application of

standards for lending and stressed the importance of the quality of data about loans




HIGHLY CONFIDENTIAL



Mr McMurray submitted timelines for responses to delinquencies on residential

mortgage loans and credit card accounts He noted that state laws may delay the timing of

remedies for default on a residential loan agreement He noted that January loanchargeoffswere greater than forecast In response to a question by Mr Casey Mr McMurray

reported that the Home Loans forecast had been made in November 2007 on the basis of

information from earlier in 2007

In response to a question by Mr Frank Mr McMurray noted the need to estimate the

proceeds of the sale of real estate acquired through foreclosure or receipt of a deed in lieu

of foreclosure REO and to reevaluate on the basis of the actual results of foreclosure

Mr McMurray noted that historically many home equity loans are paid off and Mr Caseynoted a delay in updating indices In response to a question by Ms Pugh Mr McMurray

noted an investment banking firms use of the OFHEO index and Mr Casey noted an issue

to be covered at the Tuesday session of the meeting In response to a question by Mr Lillis

Mr McMurray provided an assessment of the research work that would be necessary to

build an independent index and noted that many mortgage lenders are confronted

by

similar data challenges and Mr Cathcart noted that more recent data will not ensure

accurate predictions of future events Mr Schneider reported that management uses the

most recent data available Mr Casey noted the importance of a consistent application of

data and the role of the unallocated reserve in preparing for future contingencies MrRotella noted an increase

in

the number of units ofREO for sale In response to a question

by Mr Leppert Mr Rotella agreed to provide further information about REO In response to

a question by Ms Montoya Mr McMurray noted the importance of countybycounty

variations in trends in home prices and Mr Lillis noted the importance of seven counties In

response to a question by Ms Pugh Mr McMurray noted a scarcity of investors taking a

long position on certain futures investments

Mr McMurray submitted information illustrating the inverse relationship between

loan prepayments and loan losses In response to a question by Mr Baker Mr McMurray

noted the direct relationship between such prepayments and liquidity Mr McMurray

submitted information onprepayments trends and loss trends for 51 prime hybrid ARMsand paymentoption ARMs in the period from 2004 through 2007 showing that such trends

have varied among loans that are current or30 60 or 90 days past due He also submitted

a description of the process for determining and forecasting the allowance for loan and

lease losses the ALLL net chargeoffs and the quarterly loan loss provision and

submitted historical information about these and other items including the reserve coverage

ratio in

2006 and 2007 the last previous forecast for 2008 and an updated forecast for

2008 In response to a question by Mr Reed Mr McMurray noted that accounting firms

can object to high reserve coverage ratios

at some times In response to questions by

Mr Stever Messrs Casey and Rotella noted a potential transaction and Mr Casey

reported that trends in the economic environment are not clear and assured the Board that

the Companys annual report will provide marktomarket information for the loan portfolio

Mr Baker indicated that he is monitoring information for planning purposes Mr McMurraysubmitted a list of factors that are expected to contribute to volatility in the provision

Mr Casey noted difficulties in introducing any new approach at this time Messrs Caseyand McMurray noted predictions that would be reflected

in

a provision of a particular

amount In response to a question by Mr Frank Mr Casey assured the Board that any

proposal to change the reserving methodology shall be submitted to the Audit Committee for

review in advance and Mr Cathcart noted the need for careful deliberation

Mr McMurray reported on the application of a widely used external benchmarking

tool the credit loss model developed by Standard Poors to generate a spectrum of




HIGHLY CONFIDENTIAL



cumulative loss forecasts This model which depends more heavily on aggregate data

whereas the Companys model uses more particularized data was the subject of a detailed

report to the Board at its December 18 2007 Board meeting He submitted an update of a

report thus generated which had been submitted to the Finance Committee He noted that

an unusually large portion of the Companys home equity loan portfolio consists offirstmortgageloans In response to a question by Mr Rotella Mr Baker reported on the basis

of an investment banking firms forecast

Mr McMurray reported on actions that are underway or that are to be considered to

implement further limits on credit risk Mr Killinger noted the difficulty of making a precise

forecast of the timing of developments relating to credit in the current unusual environment

The duration of the current credit slump cannot be foreseen at this time In response to a

question by Mr Lillis Mr Killinger noted that some selfstyled financial advisors are

advocating defaults on mortgage loans and Mr Rotella noted the legislative proposal to

amend federal bankruptcy laws in a manner that may adversely affect the supply of

liquidity

for housing Mr Killinger noted the probability of continued government initiatives to provide

economic stimulus

in

the housing markets The Monday session of the Boards meeting

ended at 818 PM

Bylaw Amendment Election of Director and Appointment to Committees

The Board reconvened at 1201 PM on Tuesday February 26 2008 in Seattle

Present at the beginning of the Tuesday session were Farrell Frank Killinger Leppert

Lillis Matthews Montoya Murphy Osmer McQuade Pugh Reed Smith and Stever

Mr Killinger presided Also present were Messrs Baker Casey Cathcart David

Landefeld Rotella Schneider and Lynch secretary The Board reviewed a candidate

report with regard to Stephen Chazen whom the Governance Committee recommended to

serve on the Board and certain committees as an independent Director On motion duly

made and seconded the Board resolved to amend the bylaws to

increase the number of

Directors from 13 to 14 to find that Steve Chazen would be an independent Director to

elect him as a Director and to appoint him to serve on the Audit and Finance Committees

A copy of these resolutions will be kept in

the Secretarys file as an appendix to these

minutes Mr Chazen then joined the meeting

Approval of Minutes of January 15 2008 and January 24 2008 Meetings

Mr Killinger submitted the minutes of the January 15 2008 meeting and the

January 24 2008 special meeting On motion duly made and seconded the Board

approved the minutes

Financial Report and Submission of Updated 2008 Financial Plan

Mr Casey noted factors in the economic environment including thecombination of

gross domestic product growth and a housing recession a decrease in the unemployment

rate for January and home inventory The 3month London InterBank Offered Rate is

declining in line with expectations

Mr Casey submitted an income statement overview To show the underlying

profitability of operations he provided a bar chart showing pretax operating income

excluding the onetime restructuring charge for business resizing and the impairment of the

value of intangible assets arising from prior mortgage business acquisitions in December

2007 the noncard provision and REQ expenses for the months of December 2007 and

January 2008 and the plan for February 2008 March 2008 and the first quarter of 2008




HIGHLY CONFIDENTIAL



Even including the noncard provision and RE® expenses for the month of January 2008net income was positive The net interest margin NIM of 292 percent for January 2008

was 5 basis points greater than for December 2007 The loan loss provision was $53 million

greater for January than for December Gain on sale GOS was greater for January than

for December as a result of lower repurchase reserves and a required accounting changeto recognize gains on the date when mortgage loan interest rates are locked rather than

when the loans are sold Approximately $28 billion in prime residential mortgage loans

were sold in January The results of the management of MSRs in January were not as

strong as in December when results had been increased as a result of an adjustment in

prepayment speeds In summary as a result of Retail Banking fees and the sale of

assets

actual results in January were favorable

Mr Casey submitted a balance sheet overview showing actual total assets for

December 2007 and January 2008 Single family residential loans on the balance sheet

declined In response to a question by Mr Stever Mr Rotella reported that conforming

loans which are originated in refinancing transactions are sold to the housing USES As a

result of promotional activity in January 2008 average retail deposits for the month were

greater than for December 2007 The Companys ratio of tangible equity to tangible assets

increased to 692 percent in January as a result of the decrease in assets on the balance

sheet

Mr Casey submitted information on net chargeoffs of prime residential loans

subprime residential loans and home equity loans in the portfolio including a revised

forecast He provided a bar chart showing such net chargeoffs for each month from

January 2007 to January 2008 and forecasts for each month through December 2008 with

a range of possible variance around the forecast numbers In response to a question by MrLeppert Messrs Rotella and Casey submitted information about the severity of losses

resulting from loan defaults default rates the cure rate for loans that become delinquent

and the percentage of delinquent loans that become more delinquent In response to

questions by Mr Reed Messrs Rotella and Casey reported on factors contributing to the

deterioration of loan performance In response to a question by Mr Murphy Messrs Rotella

and Casey reported on factors related to the management of home equity loan performance

With regard to net chargeoffs in January 2008 Mr Casey submitted information

comparing the frequency of defaults and severity of

losses for each of prime residential

loans subprime residential loans and home equity loans in the portfolio Increased loss

severities caused net chargeoffs to increase Severe declines in home prices are affecting

the portfolio as forecasts are updated Mr Cathcart noted recurring chargeoffs as the value

of REQ inventory is

reduced

Mr Casey submitted information on metrics related to credit performance including

aggregate loan balances 60day delinquencies net chargeoffs and nonperforming assets

that were prime residential loans subprime residential loans and home equity loans in the

portfolio for January and December 2007 and for January 2008 Mr Killinger emphasized

the importance of creditat this point in the business cycle and noted that some borrowers

who can afford to pay their loans are refusing to do so He reported that the performance of

loans

in

the Companys portfolio is better than industry averages Current credit conditions

however are two standard deviations away from the historical norm The absolute dollar

magnitude of the decrease in home prices is the greatest in history

Mr Rotella submitted the Segment Summary showing net income directnoninterestexpenses and the efficiency ratio of each business group for January 2008 in

comparison with December of 2007 and to show the underlying profitability of their




HIGHLY CONFIDENTIAL



respective operations for the same two months each business groups pretax operating

income excluding the effect of the noncard provision REO expenses and for December

2007 the onetime restructuring charge for business resizing and the impairment of the

value of

intangible assets arising from prior mortgage business acquisitions direct

operating expenses excluding REO expenses and the onetime December 2007

restructuring charge and impairment and operating efficiency also excluding REO

expenses and the onetime December 2007 restructuring charge and impairment Card

Services net income and pretax operating income improved Home Loans loss in January

2008 was much smaller than

in

December 2008 when it

had been enlarged by the

impairment of

the value of

intangible assets arisingfrom prior mortgage business

acquisitions Expenses are wellmanaged

Mr Rotella reported in more detail on the financial performance of the Retail Banking

group Depositor fees for January 2008 were the same as for December 2007 as

consumers used debit cards less in January than

in

December The net increase in the

number of retail checking accounts for January 2008 was greater than for December 2007

The volume

of home equity loans originated in January was lower than in December due to

a tightening of

underwriting standardsIn response to a question by Mr Leppert Mr Rotella

reported thatWMBs lending standards are tighter than most competitors Productivity

remains good in Retail Banking In response to questions by Mr Reed Mr Rotella noted

growth in deposits Mr Casey reported that the growth was mostly in retail time deposits

and Mr Rotella noted the relatively low costof such funds

Mr Rotella reported in more detail on the financial performance of the Card Services

group Net income for January 2008 was greater than for December 2007 due to decreased

funding costs discount rates and lower expenses Managed receivables were slightly

lower as consumers used their credit cards for a lower volume of purchases in January than

in December The riskadjusted margin decreased As forecast the net credit loss

percentage was more negative for January 2008 than for December 2007 Initiatives to

manage asset quality include tight standards for new accounts and factoring in the possible

effects of the reduction in liquidity from home equitybased financing In response to a

question by Mr Leppert Mr Rotella reported that current information does not show a shift

to reliance on credit cards and from reliance on home equity loans and lines of credit and

Mr Casey noted the recent decline in debit and credit card usage With regard to regional

variations Mr Cathcart noted that theProvidian cardholder base was geographically

diversified In response to questions by Mr Leppert Mr Rotella noted that many holders of

cards originated through the Retail Banking group reside in Florida and some California

markets where housing prices are decreasing but many Card Services customers reside in

rental housing Mr Casey noted that Card Services credit performance is more closely

related to unemployment than to housing prices Mr Killinger noted a change in the

significance of holding mortgages on multiple properties Mr Rotella reported that

geographic concentration is less pronounced for Card Services than for Home Loans

Mr Rotella provided additional details on the financial performance of the Home

Loans group Operating income was lower for January 2008 than for December 2007

MSR management results in January were weaker than in December due to issues relating

to prepayment speeds and hedging costs Noninterest expense was lower in January than

in

December Currently a relatively high proportion of mortgage volume consists of

conforming loans which are sold to the housing GSEs The volume of

paymentoption

ARMs is relatively low Hybrid 5year ARMs remain relatively popular The mortgage

portfolio is running off due to prepayments Loans originated to refinance existing loans are

a source of COS Management is committed to controlling expenses in response to




HIGHLY CONFIDENTIAL



questions by Mr Frank Messrs Rotella and Casey reported on aspects of the relationship

between asset size and noninterest expenses Mr Rotella noted the significant importanceo

f

having a competitive advantage to stay in the mortgage business in the long run and the

utility of the mortgage business as a source of revenue inthe short run and Mr Casey

reported that management is carefully monitoring the volume of refinancing In response to

questions by Mr Stever Mr Rotella reported on plans for increased home loan originations

through Retail Banking stores noted the importance of jumbo loan volumes and reported

on the ability of other business groups to generate assets Mr Baker assured the Board

that management will seek to avoid dilution of earnings per share Mr Rotella noted that

overall Home Loans performance in January 2008 was better than

in December 2007

Mr Rotella reported on the financial performance of the Commercial group Both net

income and operating income were lower for January 2008 than for December 2007

Deposit spreads compressed Loan production declined as did total deposits

With regard to the updated 2008 financial plan Mr Casey submitted a new waterfall

chart showing the incremental extent of

revisions in the forecasts for net interest incomenoninterest income and expenses affecting 2008 pretax operating earnings excluding a

total $76 billion loan loss provision the amount of which was forecast in the version of the

plan that was submitted to the Board in January This new waterfall chart separately

showed the incremental extent of additional credit costs in

the updated forecast and the

resulting total pretax 2008 plan earnings Key assumptions included an updated forecast of

the Fed Funds rate in the base case which

is projected to decline to 225 percent by July

2008 The plan for GCS in 2008 is $52 million higher but an additional decrease in MBRs

is

now anticipated In response to a question by Mr Leppert Mr Casey reported on

projections of aftertax earnings

As background for the updated 2008 plan Mr Casey submitted a graph showingalternative credit scenarios for 2008 2009 and 2010 superimposed on the graph that he

had submitted at the January 2008 Board meeting to show a base case and recessionary

case for housing and interest rates After declining in 2008 the Fed Funds rate in the

updated base scenario would rise in 2009 and 2010 The NIM would be 322 percent in

2008 but would decrease in

2009 and 2010 Under these circumstances the ratio of

tangible equity to tangible assets is projected to increase from 610 percent in 2008 to 771

percent in 2010 In response to a question by Mr Frank Mr Casey advised on valuation of

earnings and Mr Killinger noted the possibility that if tangible equity rises so high the

Company may repurchase its stock

In the alternative scenario of higher credit costs the Fed Funds rate would remain at

225 percent in 2009 and 2010 thus contributing to an increase in the NiM In response to

questions by Ms Pugh Mr Casey reported on the differing assumed percentages of

housing price depreciation in the updated base scenario and

in the alternative scenario of

higher credit costs and Mr Cathcart reported that these are percentages of annual

depreciation In response to a question by Mr Killinger Mr Casey reported that both of the

scenarios assume that housing price depreciation may be higher in

some locales balanced

by lower depreciation in other locales In response to a question by Ms Pugh Mr Casey

explained that these percentages of housing price depreciation are cumulative over the life

of the loan from peak to trough and Mr Cathcart noted the importance of regional

variations In response to a question by Mr Murphy Mr Casey advised that the provision in

some years after 2010 is expected to be lower than the normalized level of $2 billion per

year In response to questions by Ms Pugh Mr Casey reported on the possibility of

multiple scenarios the uncertainty of the timing of a reduction of credit costs the repricing of

assets and the importance of earnings Mr Cathcart spoke in favor of planning for a specific


APPROVED BY THE BOARD OF DIRECTORS MARCH 17>2008


HIGHLY CONFIDENTIAL



annual provision for 2008 and Mr Rotella noted trends in recent OFHEO and CaseShiller

data revealing a credit environment that is far worse than at the time when WMB tightened

its lending standards in 2006 In response to a question by Mr Frank Mr Casey reported

on the maximum cumulative depreciation and possible effect on capital in response to

a

question by Mr Lillis Mr Casey noted the information conveyed by the updated base

scenario

Mr Casey submitted a bar chart showing for each quarter of 2008 alternative

quarterly earnings per share three capital percentages tangible equity as a percentage of

tangible assets Tier I capital and total riskbased capital dollar amount of excess capital

and annual earnings per share for each of the two credit scenarios the updated base

scenario and the alternative scenario of higher credit costs He noted the influence of

investment ratings on institutional depositors and counterparties In response to questions

by Mr Leppert Mr Casey reported on plans for meetings with ratings agencies and

estimated the amount of a possible incremental increase in capital In response to

questions by Mr Lillis Mr Rotella noted the significant past reduction in Home Loans

operating expenses and the possibility of further reduction Mr Casey noted the breadth of

initiatives under consideration and Mr Cathcart reported on his confidence in past and

upcoming measurements

Written Financial Report

The Board received Mr Caseys additional written Financial Report with regard to the

Companys financial performance in January 2008 which included the following sections

Financial Highlights eg Interest Income Interest Expense Net Income Profitability Asset

Quality Capital Adequacy and Key Business Indicators Noninterest Income Noninterest

Expense comparing January 2008 with December 2007 Consolidated Statements of

Financial Condition and Net Interest Spread and Margin and his similar report with regard

to the financial performance of the Companys principal banking subsidiary WMB in this

period

Corporate Development Report on Possible Capital Issuance

Mr Baker submitted a report on the statusof work on alternative initiatives to

strengthen the Company John Mahoney Huntley Garriott and Scott Romanoff of Goldman

Sachs joined the meeting to report on the alternatives with particular attention to a possible

issuance of a new kind of

equity security to segregate certain mortgage assets from the rest

of the Companys assets the segment equity Mr Mahoney reported that the current

mortgage market continues to be challenging with unprecedented credit and liquidity issues

related to home price depreciation Market deterioration has contributed to uncertainty

about the magnitude and volatility of losses on subprime mortgages mortgages with high

loan to value ratios and secondlien credit The Companys share price has been

negatively affected by the market dynamics Mr Mahoney stated that There are reasons

to believe that the market overstates potential losses on such mortgage assets and hence

undervalues the Companys franchise The goals of the project include creating

transparency for equity investors and generating additional core capital He submitted

information indicating that the Companys core franchise is undervalued In response to

questions by Ms Pugh and Mr Killinger he explained the basis of this assessment

Mr Romanoff reported on alternative initiatives He noted the limited market appetite

for a sale ofassets and the technical issues associated with a transfer of mortgage assets

to a new legal entity with securitization and with the possible issuance of a segment equity

to track the performance of a new business segment towhich would be allocated the


PROVED BY THE BOARD OF DIRECTORS MARCH 17 2008


HIGHLY CONFIDENTIAL



mortgage assets about which some current investors are uncertain In response to

questions by Messrs Frank and Matthews Messrs Mahoney and Romanoff compared and

contrasted the segment equity with tracking stocks and with transactions that could be used

to segregate liabilities Mr Garriott identified categories of assets that could be tracked by

the segment equity In response to questions by Messrs Casey and Killinger Mr Garriott

reported on components of this pool of assets and the status of work on financial modeling

In response to questions by Messrs Killinger and Rotella Messrs Casey and Baker

reported on categories of assets that might be included and on the challenges of volatility

In response to questions by Ms Pugh Mr Romanoff commented on the use of tracking

stocks in the past and reported that the new equity would be fundamentally different In

response to a question by Mr Matthews Mr Romanoff reported that the new equity would

have its own earnings per share metric and Mr Baker clarified that the earnings on the

assets would be included in the Company consolidated earnings but that the new business

segment holding the assets would have segregated earnings per share In response to

questions by Mr Lillis Mr Romanoff noted a regulatory requirement for core capital

treatment and noted a possibility of reintegrating the segment and Mr Mahoney noted the

goal of returning to a stable bank In response to questions by Mr Stever Messrs

Mahoney and Casey projected the nearterm performance of the segment equity In

response to a question by Mr Matthews Mr Casey noted that retention of a particular

category of asset might delay the differentiation of the Companys common stock and the

segment equity In response to a question by Mr Lillis Mr Romanoff reported that

reintegration of the segment might be accomplished by a marktomarket liquidation

mechanism In response to a question by Mr Frank Mr Mahoney noted the importance of

comprehensive due diligence

Mr Mahoney submitted a comparison of the earnings impacts of alternative $3 billion

issuances of the segment equity and of

the Companys common stock In response to a

question by Mr Lillis Mr Mahoney explained the reason for a convergence of earnings

projected to occur in 2013 Mr Casey reported that the independent auditor is reviewing the

segment equity proposal In response to a question by Mr Lillis Mr Casey noted an

unresolved issue with regard to the accounting effect of the conversion feature of the

segment equity Following a comment by Mr Chazen Mr Casey noted another issue to be

resolved In response to a question by Mr Lillis Mr Garriott reported on the possibility that

purchasers of

the segment equity would want certain assets to be contributed at a discount

In response to a question by Mr Killinger Mr Mahoney reported on the kinds of investors

that would be interested in

the segment equity and identified three key issues with regard to

this segment equity In response to a question by Mr Matthews Mr Casey reported on the

timeframe for the resolution of issues related to the segment equity issuance and other

alternatives In response to a question by Mr Killinger Mr Romanoff reported on the

results of his firms preliminary inquiry to the Board of Governors of the Federal Reserve

System about capital treatment In response to a question by Ms Pugh Mr Mahoney

reported on factors affecting the probability of successful issuance of the segment equity

and Mr Casey noted the very short timeframe for a decision whether to pursue the issuance

of this new kind of equity Messrs Mahoney Garriott and Romanoff left the meeting

Review of Strategic Alternatives

Mr Baker submitted a report on strategic alternatives beginning with a copy of the

bar chart that Mr Casey had submitted as part of the updated financial plan showing

alternative quarterly earnings per share three capital percentages tangible equity as a

percentage of tangible assets Tier 1 capital and total riskbased capital dollar amount of

excess capital and annual earnings per share for each of

the two credit scenarios the


APPROVED BY THE BOARD OF DIRECTORS MARCH 172008


HIGHLY CONFIDENTIAL



updated base scenario and the alternative scenario of higher credit costs for each quarter

of 2008 Messrs Casey and Cathcart reported on the possibility that as a result of such

changes in financial condition and prospects the OTS may downgrade WMBs assets

earnings and liquidity In response to a question by Mr Reed Messrs Casey and Baker

outlined possible consequences of the downgrades Mr Casey reported that he expects the

ratings of securities issued by WMB to stay above investment grade In response to a

question by Mr Frank Mr Casey reported on issues related to institutional deposits and

Federal Home Loan Bank requirements for collateralization of advances In response to a

question by Mr Matthews Mr Casey reported that the changes in ratings were driven by

creditrelated developments and Mr Rotella reported that the ratings agencies are

updating their assessments of other banks Mr Casey reported on the results of a stress

test of liquidity and noted the importance of collateral

Mr Casey reported in greater detail on the consequences of various strategic

alternatives He noted the differing amounts of dilution that would result from pursuing

different alternatives In response to questions by Mr Lillis Mr Casey reported in greater

detail on the consequences of a sale of assets He also reported on a possible private

equity issuance and noted the short time for due diligence In response to a question by

Mr Lillis Mr Casey noted the relatively low dilution that would result from a successful

issuance of segment equity and Mr Killinger noted the rights of the holders of a segment

equity security to elect two Directors of the Company by a class vote in the event of

sustained nonpayment of dividends

In response to a question by Mr Reed Mr Baker

reported that these dividends would be paid out of the cash flows from the mortgage assets

In response to a question by Mr Lillis Mr Baker reported on the rate of

return that

purchasers of segment equity would be likely to demand In response to questions by MrChazen Mr Casey noted the importance of successfully segregating the mortgage assets

about which many current investors are uncertain and advised on the size of the offering

and Mr Baker noted the exposure of the segment equity to risk


by Mr Leppert Mr Casey noted the possibility of a larger issuance ofthe segment equity

and Mr Chazen noted the possibility of a supplemental issuance of a different equity

security to a private investor In response to a question by Mr Matthews Mr Casey

reported on a possible consequence of a larger issuance of the segment equity Inresponse to questions by Messrs Frank and Stever Messrs Killinger and Baker reported

on advice from Lehman Brothers about certain matters and Mr Baker noted the importance

of satisfactory earnings

Mr Killinger summarized the challenge facing the Company by noting that valuations

are unusually low because the housing market is two standard deviations below historical

norms The Company would be worth a much higher price in a more normal environment

In response to a question by Mr Lillis Mr Casey noted the significance of current

uncertainty about the future and advised about the likely conversion price Mr Killinger

reported that management would pursue the issuance of segment equity and would further

research other alternatives He advised on plans for a special Board meeting in March

Approval of Updated 2008 Financial Plan

Having reviewed strategic alternatives and considered the additional information with

regard to the financial environment the Board resumed its consideration of the updated

2008 financial plan that Mr Casey had submitted earlier in the meeting On motion duly

made and seconded the Board approved the updated plan




HIGHLY CONFIDENTIAL



Loan Modification Initiatives

At Mr Schneiders request John Berens WMBs Division ExecutiveLoan Servicing

joined the meeting participating by means of a conference telephone enabling all

participants to hear one another Mr Rotella described Mr Berens background and noted

the premier ranking achieved by Loan Servicing under Mr Berens leadership MessrsBerens and Schneider submitted a report on the implementation of Home Loans

commitment to homeownership preservation Mr Schneider explained that WaMu views

foreclosure as a last resort He described the categories of current customers to whomcertain initiatives are directed and noted the use of a prepayment model in the outbound

mail and telephone calls for a customer retention program The rate reset campaign

includes notification refinance offers and modification offers to eligible ARM borrowers The

program for subprime borrower assistance includes a commitment of up to $2 billion and

more than $800 million has been funded In response to a question by Ms Osmer

McQuade Mr Schneider reported on initiatives to contact customers In response to a

question by Mr Leppert Mr Schneider reported on the scope of the program

Mr Berens submitted an update on the subprime borrower assistance program

including a scorecard showing the volume of applications and fundings for 2007 and for

January 2008 categorized by type of new loan or modification and showing that cumulative

fundings thus far have achieved 442 percent of the $2 billion commitment He also

reported on outreach initiatives to avert borrower defaults The emphasis is on outbound

telephone calls In response to a question by Mr Leppert Mr Berens reported that 100000borrowers have been called Mr Berens stated the number of loans that are 60 days or less

past due In response to a question by Mr Leppert Mr Schneider reported on the numberof REO properties for loans in portfolio and for loans serviced for others In response to a

question by Mr Rotella Mr Berens reported on the number of pending foreclosures

In

response to a question by Mr Matthews Mr Berens compared the current number of

pending foreclosures with the number pending as of a previous date and Mr Schneider

provided a similar comparison with regard to the number of REO properties In response to

a question by Mr Rotella Mr Berens reported on some borrowers reactions to home price

depreciation In response to a question by Mr Stever Mr Berens reported on targets for

loss mitigation and assured the Board that WMB meets the loss mitigation goals of the

housing GSEs Approximately 80 percent of borrowers to whom WMB offers workout

solutions retain their homes whereas approximately 20 percentof such borrowers ultimately

engage in a short sale of their home or grant a deedinlieu of foreclosure Mr Schneider

noted that to be eligible for a repayment plan borrowers must provide detailed financial

information with regard to the ability to make payments according to this new plan

Mr Berens reported on the WaMu Cares program including hiring counselors to

reach out to borrowers directly and through nonprofit organizations in areas with large

numbers of troubled loans The WaMu Cares inbound team responds to customers facing

imminent default Other initiatives include door knock representatives visiting borrowers

who have not contacted WMB mailing thousands of educational DVDs and CDsenhancements of home equity credit strategies to assist borrowers interest rate

modifications and the provision of a dedicated email box for nonprofit organizations In

response to a question by Mr Leppert Mr Berens reported that a majority of

the WaMuCares counselors were hired since mid2007

Mr Schneider reported on participation in the HOPE Now Alliance including morethan 40000 letters sent to customers in 2007 The Community and External Affairs

Department supplements these efforts The Company supports the HOPE Now Project

Lifeline program to offer a 30day pause in foreclosure proceedings to allow more time for


APPROVED BY THE BOARDOF DIRECTORS MARCH 17 2008


HIGHLY CONFIDENTIAL



loans modifications

Mr Schneider submitted an update on the loan workout program which helped

nearly 50000 borrowers in 2007 The Company has joined forces with a number of

organizations including the NeighborWorks® Center for Foreclosure Solutions and the

Homeownership Preservation Foundation to launch a national effort to avert foreclosures

In response to a question by Mr Killinger Mr Berens also reported on issues

relating to loan loss experience including RED sales percentages and prices In response

to a question by Mr Leppert Messrs Berens and Schneider reported on the extent to which

RED sales prices may be below original valuations and on the prospects for stabilization of

values In response to a question by Mr Schneider Mr Berens noted the transition of loans

into more seriously delinquent categories Messrs Schneider and Cathcart discussed

issues relating to the possible extent of loan losses in the first quarter of 2008 In response

to a question by Mr Leppert Messrs Schneider and Berens reported on a difference

between loss percentages on prime first mortgage loans and subprime loans In responseto a question by Mr Smith Mr Berens reported on the metric for calculation of a breakeven

point In response to questions by Mr Leppert Mr Schneider discussed the effect of a

possible systematic reduction in loan principal due Mr Rotella stated that management will

continue to look at alternatives including such a reduction and Mr Casey noted how certain

assets affect the amount of the ALLL Mr Rotellanoted the importance of timely action in

the current housing market environment In response to questions by Mr Murphy MrSchneider reported that the term BPD in this context refers to a broker price opinion and

described the nature and use of a BPD Mr Berens subsequently discontinued his

attendance of the meeting by disconnecting from the conference telephone

Voice of the Customer Report

Mr Killinger submitted the Voice of the Customer Report The report described the

results of initiatives to improve customer loyalty and reduce the number of customer

complaints He noted that the Company is now tied with its leading competitor in customer

satisfaction Ms Montoya noted issues related to service

Business Process Outsourcing

Mr Killingersubmitted the Business Process Outsourcing Report The report

provided highlights and a summary of status and results of this program for 2007

Economic Commentary

Mr Killinger submitted Mr Longbrakes economic outlook commentary for February

The written commentary included a summary of recent developments analysis and

projection of trends

Regulatory Update

Mr Killinger submitted a February 2008 regulatory update The report included

information about the results of past regulatory examinations and the status of ongoing

examinations

Investor Relations Report

Mr Killinger submitted the monthly report by the Investor Relations Department

This report reflected trading activity ownership Investor Relations events and analyst




HIGHLY CONFIDENTIAL

AVM Confidential Limited Access


commentary during the period from January 7 2008 to February 13 2008

Media Analytics Report

Mr Killinger submitted a Media Analytics Report which summarized press and other

media coverage of the Company in December 2007 and compared the frequency and tone

of coverage with five competitors

Audit Committee Report and Approval of Inclusion of Financial Statements

Mr Frank submitted the report of the Companys Audit Committee The Committee

met in joint session with the Audit Committee of WMB

The Committee reviewed lists of action items The Committee reviewed the financial

statements for the Companys annual report on Form 10K including changes in the

discussion of the ALLL reflecting comments from the Securities and Exchange Commission

The Committee also reviewed the Controllers description of the summary of

unadjusted

differences in the fourth quarter of 2007 and for the year 2007 There were no significant

differences The Committee reviewed a report on pending certifications for the Form 10K

Having received the Committees report with regard to these financial statements

the Board on motion duly made and seconded approved the inclusion of financial

statements in the Form 10K Any material changes that occur prior to filing will be

submitted to Mr Frank as chair of the Committee

Audit Committee Review and Actions on Other Reports

Redacted




HIGHLY CONFIDENTIAL



Redacted

The Committee reviewed a report on the status of work relating to the renewal of

directors and officers insurance The goal is to maintain the current amount of coverage

The Committee also heard a report on the status of work on parallel reporting under the

Basel II capital accords

The Committee reviewed a report on losses suffered by a nonaffiliated company as

a result of the conduct of a rogue trader and was informed that there are preventative

controls at the Company The Committee also reviewed a report on a new process for

tracking and escalating certain issues and a report on whistleblower reports including

enhancements in the program

Identification of Audit Committee Financial Experts

Mr Frank reported that the Audit Committee reviewed information with regard to the

expertise of its members and recommended a Board determination of Mr Franks Mr

Smiths and Mr Chazens qualifications to serve as an Audit Committee financial expert

Messrs Frank Smith and Chazen recused themselves from voting with regard to this

determination On motion duly made and seconded the Board determined that Messrs

Frank Smith and Chazen satisfy the requirements for an audit committee financial expert

under rules established by the Securities and Exchange Commission

Amendment of Audit Committee Charter and Board Correspondence Policy

Mr Frank reported that the Audit Committee had performed an annual review of the

Committees charter Mr Frank reported on the Committees recommendation in favor of all

changes including changes that he had proposed after the Board mailing and which were

submitted to the Board as a written supplement at this Board meeting On motion duly

made and seconded the Board approved this charter including all the changes

Mr Frank reported that the Committee reviewed the Board Correspondence Policy

He described changes to the policy to provide for posting changes onBoardVantage and

notifying Directors of the changes by email The Committee recommended approval of the

changes On motion duly made and seconded the Board approved these changes in the

Policy

Other Audit Committee Matters

Mr Frank reported that the Committee reviewed the hiring policy The Committee

also reviewed the results of its selfevaluation The Committee met in executive sessions

with the independent auditor and the internal auditor During an executive session the

Committee approved the engagement of Deloitte Touche as independent auditor and

approved the inclusion ofthe Committees report in the proxy statement for the Companysannual shareholder meeting

Human Resources Committee Report

Mr Stever submitted the report of the Companys Human Resources Committee

The Committee met in joint session with the Human Resources Committee of WMBThe Committee reviewed performance of the investment plans for employees Two

largecap funds are on a watch list Current assets in the plan amount to $22 billion

whereas current obligations are only 16 billion Some assets may be moved to fixed

income investments




HIGHLY CONFIDENTIAL



The Committee reviewed a change approved by the Plan Investment Committee in

the core lineup of investments in the 401k plan This change will allow employees to better

select individual funds and should reduce fees paid to investment advisors The Committee

reviewed a report on the WaMu Savings Plan and the WaMu Pension Plan including

amendments implemented to comply with recent legislation

Amendments to Employee Stock Purchase Plan

Mr Stever reported that the Human Resources Committee had reviewed and

recommended approval of amendments to the Employee Stock Purchase Plan the

ESPP In response to a question by Mr Reed Mr Stever informed the Board of the

number of shares that were available for the ESPP prior to

this amendment In response to

a question by Ms Pugh Mr Stever noted the Committees discussion of the possibility that

employees may choose to direct investment in the Companys stock within the 401k plan

as well as the ESPP Mr Frank informed the Board that the lawsuits relating to the 401plan do not include claims relating to the ESPP On motion duly made and seconded the

Board resolved to approve the amendments to the ESPP A copy of the resolutions adopted

by the Board will be kept in the Secretarys file as an appendix to these minutes

Human Resources Committee Review and Actions on Other Reports

Mr Stever reported that the Human Resources Committee had reviewed and

approved inclusion of a proposed Compensation Discussion and Analysis section and report

of the Committee in the proxy statement for the Companys annual shareholder meeting

The Committee also reviewed the survey results relating to the Committee and discussed

changes including a possible additional report to the Board The Committee reviewed a

report on the status of a response to an inquiry from the House Committee on Oversightand

Government Reform and approved the response

Amendment of Human Resources Committee Charter relating to Contract Authority

The Committee reviewed relationships between the Towers Perrin firm the

Committee and the Company The Committee previously had authority only over work

related to executive compensation Mr Stever has authority to approve such workManagement had authority to enter into contracts for Towers Perrin to perform other work

for the Company under the Contracts Policy of the Company without approval by the

Committee Under a new policy adopted by the Committee in

the future the Committees

approval shall be required for any contracts with any such firm The Committee

recommended that its charter also be amended to reflect the Committees authority in this

regard On motion duly made and seconded the Board directed that such a change be

made in the Committees charter

Governance Committee Report and Determination of Director Independence

Mr Reed submitted the report of the Companys Governance Committee The

Committee met in joint session with the Governance Committee of WMB

Mr Reed reported that the Committee reviewed information necessary for

determination of each Directors independence under the Guidelines for Determining

Director Independence The Committee recommended a determination that all directors

with the exception of Mr Killinger and Ms Pugh are independent On motion duly made

and seconded the Board made this determination A copy of the resolutions adopted by the

Board

in making this determination will be kept in the minute book as an appendix to these




HIGHLY CONFIDENTIAL



minutes Mr Reed also noted that the Committee had discussed a response to a proposal

from Change to Win CtW which represents certain labor unions

Nominees for Election to the Board by Shareholders

Mr Reed reported on the Governance Committees recommendations to nominate

candidates for election to the Board

by the shareholders at the Companys annual meeting

On motion duly made and seconded the Board resolved

to nominate these candidates for

election A copy of the resolution adopted by the Board regarding nominees for Directors

will be kept in the minute book as an appendix to these minutes

Governance Matters relating to Shareholder Proposal and Communications

Mr Reed reported on the Governance Committees recommendation in favor of the

retention at this time of the current provisions with regard to majority voting including the

requirement for submission of a resignation by any Director nominee who has received

fewer for votes than withholds in an uncontested election Accordingly at this time the

Committee recommends against the shareholder proposal for initiation of a process to

amend the Companys articles of

incorporation to provide that director nominees must be

elected by the affirmative vote of the majority of votes cast at an annual meeting of

shareholders Accordingly a recommendation by the Board against this shareholder

proposal will be included in the resolutions in preparation for the 2008 annual meetingwhich will be submitted at a later point in

the Board meeting Management will

communicate with the shareholder proponent prior to this 2008 annual meeting The

Committee plans to revisit the relevant issues at a subsequent Committee meeting

In response to a question by Ms Osmer McQuade Mr Reed reported on plans for

communications also with Institutional Shareholder Services and CtW In response to a

question by Mr Matthews Mr Reed reported on the subject of a letter In response to a

question by Mr Reed Mr Killinger noted plans for a meeting

Lead Independent Director

Mr Reed reported on the Governance Committees recommendation that in lieu of

supporting an alternative proposal relating to

the Chairman of the Board the Corporate

Governance Guidelines be amended to provided for the Board to appoint in lieu of a

Presiding Director a Lead Independent Director having authority to call meetings ofnonmanagementor independent Directors in the discretion of the Lead Independent Director

and that Mr Frank be appointed as Lead Independent Director On motion duly made and

seconded the Board resolved to approve this change in the Guidelines and the appointment

of Mr Frank Ms Pugh and Mr Killinger recused themselves from voting A copy of the

resolutions adopted by the Board including the substitution of a reference tononmanagementDirectors instead o

f independent Directors will be kept in the Secretarys file


Other Changes in Corporate Governance Guidelines

Mr Reed reported that the Governance Committee had considered and

recommended Board approval of

certain other changes to update the Corporate

Governance Guidelines On motion duly made and seconded the Board approved these

changes




HIGHLY CONFIDENTIAL



Governance Committee Review and Actions on Other Reports

Mr Reed reported that the Governance Committee reviewed the 2007 Board goals

He outlined modifications of the goals for 2008

Mr Reed noted the Committees receipt of the completed surveys with regard to the

Board and its committees The Committee will review the survey responses to ensure all

recommendations are properly considered The Committee also reviewed a proposal for

Director education about the Basel II accords and reviewed the schedule of Board

meetings The Committee also held an executive session in which the Committee reviewed

issues relating to attendance and succession planning for the chairs of the committees of

the Board

Amendment of Committee Charters

Mr Reed reported that the Governance Committee recommended changes in its

charter and certain governance related changes to the Finance Corporate Relations

Human Resources and Corporate Development Committees charters On motion duly

made and seconded the Board approved these changes in the charters as recommended

by the Committee

Preparations for Annual Shareholder Meeting

Mr Killinger requested that the Board approve certain actions in preparation for the

submission of matters to the shareholders at the 2008 annual meeting In response to a

question by Mr Reed Mr Landefeld reported that the proxy statement will go to press in the

following week In response to a question by Mr Stever Mr Landefeld reported on certain

revisions relating to the Human Resources Committee On motion duly made and

seconded the Board resolved

to approve these preparations for this annual meeting A

copy of the resolutions adopted by the Board will be kept in

the minute book as an appendix

to these minutes

Registration of Employee Stock Purchase Plan

Mr Killinger submitted a proposal for the registration of stock to be issued in the

Employee Stock Purchase Plan On motion duly made and seconded the Board resolved

to approve the filing of the Form S8 registration statement A copy of the resolutions will be

kept in


Officer Elections Promotions and Transfers

On motion duly made and seconded the Board approved officer elections and

another change A copy of a schedule of all such changes as submitted to the Board will

be kept in


Executive Session to Discuss Management Response to Appraisal Investigation

Messrs Casey Cathcart David and Lynch left the meeting

Redacte 01




HIGHLY CONFIDENTIAL



Executive Session including CEO

Messrs Landefeld and Rotella left the meeting The remainder of the Board meeting

was in executive session The Board continued its discussion of strategic issues

Executive Session without CEO

Mr Killinger left the meeting The Board continued the discussion of strategic

issues and determined that additional insight into the Companys credit outlook including

further information with regard to the forecasting models and their inputs would be

appropriate for the next meeting of the Board In addition promptly after each meeting of

the Corporate Development Committee the Board shall have the opportunity for a

discussion of the issues that were reviewed by this Committee

There being no further business the meeting was adjourned at 730 PM

Appendices

A Approval of Bylaw Amendment Independence of Potential Director Election of

Director and Appointment to Committees

B Approval of Amendments to the ESPP

C Approval of Director Independence Determinations

D Approval of Nominees for Election to the Board by Shareholders

E Approval of Lead Independent Director

F Approval of Comprehensive Preparations for 2007 Annual Meeting

G Approval of Filing of S8 Form

H Schedule of Officer Elections




HIGHLY CONFIDENTIAL



Appendix A Approval of Bylaw Amendment Independence of Potential Director

Election of Director and Appointment to Committees

Bylaw Amendment

RESOLVED that Article II of the Bylaws of the Company are amended to provide

The board of directors of this corporation shall consist of fourteen 14 directors

Independence of Potential Director

RESOLVED that the Board of Directors hereby finds that if elected Stephen I

Chazen would be an independent director pursuant to the Washington Mutual Inc

Guidelines for Determining Director Independence

RESOLVED FURTHER that the Board of Directors hereby finds that if elected

Stephen I Chazen would be an independent director pursuant to the applicable

rules and regulations of the Securities and Exchange Commission and the New York

Stock Exchange

Election as Director

RESOLVED that the Board of Directors hereby elects Stephen 1 Chazen to serve

as a director of the Corporation for an initial term to expire as of the next annual

meeting of the Companys shareholders

Appointment to Committees

RESOLVED that the Board of Directors the Board hereby appoints Stephen I

Chazen to serve as a member of the Boards Audit Compliance and Finance

Committees effective February 26 2008




HIGHLY CONFIDENTIAL



Appendix BApproval of Amendments to the ESPP

APPROVAL OF AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN

WHEREAS Washington Mutual Inc the Corporation maintains the 2002

Employee Stock Purchase Plan the ESPP

WHEREAS Section 16a of the ESPP authorizes the Board of Directors of the

Corporation the Board to amend the ESPP from time to time

WHEREAS it

has been proposed that the Corporation increase the number of shares

of common stock of the Corporation that may be issued pursuant to awards granted under

the ESPP by 4000000 shares of the Corporations common stock

WHEREAS the Board believes that

it is in the best interest of the Corporation to

amend the ESPP to increase the number of shares of common stock that may be issued

under the plan and

WHEREAS the ESPP requires approval by the shareholders of the Corporation to

increase the number of authorized shares

Now THEREFORE BE

IT

RESOLVED that subject to approval by the shareholders of

the Corporation the ESPP be and hereby is

amended by deleting the existing Section 4 of

ESPP in its entirety and replacing it with the following

Subject to adjustment from time to time as provided in Section 19 1 a maximum of

8863590 shares shall be available for issuance under the Plan Shares issued under the

Plan shall be drawn from authorized and unissued shares or from shares subsequently

acquired by the Company

RESOLVED FURTHER that the foregoing amendment to increase the number of

shares of common stock of the Corporation that may be issued pursuant to the ESPP be

submitted to the shareholders of the Corporation for a vote in accordance with the ESPP at

the next regular meeting of the shareholders of the Corporation

RESOLVED FURTHER that subject to the approval of the foregoing amendment by th

Corporations shareholders the Corporation hereby i reserves an additional 4000000shares of the Corporations common stock for issuance pursuant to the terms of the ESPPas amended which shares may be authorized but unissued shares o

f common stock or

shares of common stock held by the Corporation as treasury stock and ii authorizes the

issuance of such 4000000 shares of the Corporations common stock under the terms of

the ESPP as amended and that such shares of the Corporations common stock shall

when issued in accordance with the provisions of the ESPP as amended constitute validly

issued fully paid and nonassessable shares of common stock

AUTHORIZE FILING OF FORM S8

WHEREAS the Board has deemed

it

to be

in

the best interests of the Corporation and

its shareholders to register the additional 4000000 shares of the Corporations common

stock that may be issued pursuant to the ESPP under the Securities Act of 1933 as

amended the Securities Act




HIGHLY CONFIDENTIAL



Now THEREFORE BE IT RESOLVED that subject to the approval of the foregoing

amendments by the Corporations shareholders any officer of the Corporation and each a

them severally hereby is authorized and directed on behalf of the Corporation and in its

name to prepare execute and cause to be filed with the Securities and Exchange

Commission SEC one or more Registration Statements on Form S8 the 8Registration Statements for the additional shares available for issuance under the ESPPas amended all amendments and supplements and any and all certificates documents

letters and other instruments to be filed with the SEC andor any other governmental

agency pertaining thereto including without limitation if necessary appropriate exhibits

and supplemental documents for the purpose of registering the offer and issuance of the

Corporations common stock pursuant to

the ESPP as amended under the Securities Act

RESOLVED FURTHER that any officer of the Corporation and each of them severally

is authorized to be appointed the agent for service of process of the Corporation under the

Securities Act

in

connection with the S8 Registration Statements

RESOLVED FURTHER that the Corporations common stock to be issued pursuant to

the ESPP as amended be qualified or registered for sale in various states that the officers

of the Corporation and each of them severally are authorized to determine the states in

which appropriate action shall be taken to qualify or register for sale such the Corporations

common stock as such officers deem advisable that such officers are hereby authorized to

perform on behalf of the Corporation any and all acts that they may deem necessary or

advisable in order to comply with the applicable law of any such states and in connection

therewith to execute and file all requisite documents

RESOLVED FURTHER that the officers of the Corporation be and each of them hereby

is

authorized and directed by and on behalf of the Corporation and in its name to take all

action necessary to comply with any and all federal and state securities laws

in respect of

the above described issuances of the Corporations common stock and to take such other

action as he or she may deem necessary or appropriate to carry out the issuance of such

the Corporations common stock and the intent of the foregoing resolutions

RESOLVED FURTHER that any officer of the Corporation be and each of them hereby

is authorized and directed in the name and on behalf of the Corporation to prepare or cause

to be prepared and to distribute one or more prospectuses for offers andor issuances of the

Corporations common stock under the ESPP as amended

APPROVAL OF APPLICATION FOR NYSE LISTING

WHEREAS the Board has determined that it is in the best interests of the Corporation

to apply to list on the NYSE the additional shares of the Corporations common stock

authorized for issuance under the ESPP the Listing Application

Now THEREFORE BE IT RESOLVED that subject to the approval of the foregoing

amendments by the Corporations shareholders any officer of the Corporation be and each

of them hereby is authorized and directed on behalf of the Corporation and

in

its name to

prepare and cause to be filed with the NYSE the Listing Application


is authorized and directed on behalf of the Corporation and in its name to prepare and

cause

to

be filed as exhibits to said Listing Application such documents as may be required

171023 23 WM confidential Limited Access



HIGHLY CONFIDENTIAL



or appropriate for filing as exhibits to such Listing Application or any supplements or

amendments thereto

RESOLVED FURTHER that any officer of the Corporation be and each of them her

is named as a representative of the Corporation to represent the Corporation before the

NYSE with all authority to make changes in the application and execute all documents

including without limitation any agreement required by the NYSErequiring the Corporation

to perform all acts required or reasonably requested by the NYSE

in connection with such

application and


is appointed as the Corporations agent for service of process of the Corporation in

connection with the Listing Application

GENERAL

RESOLVED that the officers of the Corporation be and each of them individually

hereby is authorized directed and empowered to take all actions and do all things

necessary and appropriate to effectuate the preceding resolutions including makingexecution and delivery of all documents exhibits agreements waivers papers

undertakings instruments and certificates filing with the Securities and Exchange

Commission such notices documents or other items andor performing such other acts as

each officer of the Corporation may from time to time deem necessary desirable or

appropriate in order to carry out the intent and purpose of the foregoing resolutions and

RESOLVED FURTHER that the acts and deeds heretofore done by any of the officers

of the Corporation and by any other officer employee or agent of the Corporation acting on

behalf of an Authorized Officer to effect the purpose and intent of the foregoing resolutions

be and hereby are adopted ratified confirmed and approved in

all respects




HIGHLY CONFIDENTIAL



Appendix C Approval of Director Independence Determinations

RESOLVED that the Board finds that the following current Company directors are

independent directors pursuant to the Washington Mutual Director Independence

Guidelines

Stephen E Frank Anne V Farrell

Charles M Lillis Thomas C Leppert

Regina T Montoya Phillip D Matthews

Margaret Osmer McQuade Michael K Murphy

William G Reed Jr Orin C Smith

James H Stever

RESOLVED FURTHER that the Board finds that all of the current members of the

Companys Audit Committee are independent directors pursuant to the applicable rules and

regulations of the Securities and Exchange Commission and the New York Stock Exchange




HIGHLY CONFIDENTIAL



Appendix D Approval of Nominees for Election to the Board by Shareholders

Nominees for Directors

RESOLVED that the following persons are hereby nominated for election to serve as

directors of the Corporation for a oneyear term expiring at the Corporations Annual

Meeting of Shareholders in 2009 or until his or her successor

is duly elected and qualified

Stephen 1 Chazen Charles M Lillis Mary E Pugh

Stephen E Frank Phillip D Matthews William G Reed Jr

Kerry K Killinger Regina Montoya Orin C Smith

Thomas C Leppert Michael K Murphy James H Stever

Margaret Osmer McQuade

RESOLVED FURTHER that the Corporation shall propose to the holders of the

Corporations Common Stock at the 2008 Annual Meeting of the Shareholders the election

of

the foregoing individuals to the Board of Directors for a oneyear term expiring at

the

Corporations Annual Meeting of Shareholders in 2009

171023 2 WM Confidential Limited Acce



HIGHLY CONFIDENTIAL



Appendix E Approval of Lead Independent Director

RESOLVED that the Board of Directors hereby amends the Corporate Governance

Guidelines the Guidelines of the Company as follows

The following new subsection I shall be inserted into the Guidelines in the section

Board Composition and Leadership and the remaining subsections shall

accordingly be assigned the next letter in the alphabet

Lead Independent Director

The Board recognizes the benefits of

designating a lead independent director The

independent Directors shall by majority vote annually select one of the independent

Directors to serve as the Lead Independent Director The Lead Independent Director will

assist the Chair of the Board with boardrelated matters including meeting agendas and

schedules and will serve as a liaison between the independent Directors and the Chair of

the Board The Lead Independent Director also will preside at any meetings ofnonmanagementor independent Directors and at any meeting of the Board at which the Chair

of the Board will not be present The Lead Independent Director has authority to call

meetings of the independent Directors and to recommend to the Chair the retention of

outside advisors and consultants who report directly to the Board on boardwide issues

In

addition while the Human Resources Committee shall continue to evaluate the performance

of the Chief Executive Officer the Lead Independent Director shall coordinate with the Chair

of the Human Resources Committee and join him or her to communicate to the Chief

Executive Officer the results of the Committees evaluation of the Chief Executive Officers

performance

2 The last sentence of subsection H The Chair of the Board in the section Board

Composition and Leadership shall be amended with the additions and deletions

shown

In the absence of the Chair the Lead Independent Director will chair the meeting or in the

absence of the Lead Independent Director the Board will elect a Chair Pro Tern to chair the

meeting




HIGHLY CONFIDENTIAL



Current subsection E Executive Sessions of Directors and Presiding Director in the

section Board Meetings shall be amended with the deletions and additions shows

as marked below

Executive Sessions of Directors and Lead Independent Director

The nonmanagement Directors generally meet in executive session at every

regularly scheduled board meeting The nonmanagement Directors who have been

determined to be independent in accordance with the Boardapproved Guidelines for

Determining Director Independence meet in executive session once per year AnynonmanagementDirector may submit topics he or she deems appropriate for discussion at

executive sessions to the Chief Executive Officer or to the Lead Independent Director to

ensure that the interests and needs of the nonmanagement Directors are appropriately

addressed

If the Lead Independent Director is absent from or otherwise unable to preside at an

executive session the independent Directors in attendance shall by majority vote select one

of

their members to preside at that executive session

FURTHER RESOLVED that the Board of Directors hereby appoints Stephen Frank to serve

for the remainder of 2008 as the Lead Independent Director and that he shall no longer

serve as presiding Director which position has been eliminated and

FURTHER RESOLVED that the Board of Directors hereby determines that the annual

retainer for the position of Lead Independent Director be $25000




HIGHLY CONFIDENTIAL

WMConfidential Limited Access


Appendix FApproval of Comprehensive Preparations for 2007 Annual Meeting

Comprehensive Preparations for 2008 Annual Meeting

RESOLVED FURTHER that the Executive Vice President and Interim Chief Legal Officer

any Senior Vice President and Associate General Counsel the Secretary or any Assistant

Secretary any of the foregoing an Authorized Officer or any one of them acting alone

is

hereby authorized and directed to take any action that is appropriate in the discretion of anyof them to submit proposals for a the election of the following nominees

Stephen 1 Chazen Charles M Lillis Mary E Pugh

Stephen E Frank Phillip D Matthews William G Reed Jr

Kerry K Killinger Regina Montoya Orin C Smith

Thomas C Leppert Michael K Murphy James H Stever


to the Corporations Board of Directors the Nominees b the ratification of the selection

of the Corporations outside auditor for2008by the shareholders the Auditor Ratification

c the approval of an increase in the number of shares that may be issued pursuant to the

Corporations Amended and Restated 2002 Employee Stock Purchase Plan the ESPPShares Proposal and d to oppose the following shareholder proposals if they are

presented at the Annual Meeting i a proposal regarding an independent Board Chair and

ii a proposal regarding the Corporations director election process the Shareholder

Proposals

RESOLVED FURTHER that the Board of Directors recommends that the shareholders vote

FOR all of the Nominees the Auditor Ratification and the ESPP Shares Proposal and

AGAINST the Shareholder Proposals

RESOLVED FURTHER that pursuant to the bylaws of the Corporation the Board of

Directors hereby declares that the Annual Meeting shall be held

in Seattle Washington on

Tuesday April 15 2008 at 100 pm at Benaroya Hall 200 University Street Seattle

Washington

RESOLVED FURTHER that the purposes of the Annual Meeting shall be to act on the

Nominees the Auditor Ratification the ESPP Shares Proposal and the Shareholder

Proposals and to transact such other business as may properly come before the meeting or

any adjournments thereof

RESOLVED FURTHER that pursuant to the Corporations bylaws the Board of Directors

hereby sets February 29 2008 as the record date for determination of the shareholders

entitled to notice of and to vote at the Annual Meeting

RESOLVED FURTHER that the Board of Directors hereby approves the Proxy Statement

and Form of Proxy in the forms presented to the Board and that the Authorized Officers are

hereby authorized empowered and directed to finalize the Proxy Statement with such

changes as shall be appropriate with the advice of counsel and to incorporate in such

Proxy Statement i Compensation Discussion and Analysis and Report of the Human

Resources Committee as required by the applicable Securities and Exchange Commission

rules and ii a Report of the Audit Committee

in such form as the Audit Committee shall

approve




HIGHLY CONFIDENTIAL



RESOLVED FURTHER that the Authorized Officers and each of them acting alone is

hereby authorized empowered and directed to make or to designate any person to make

any necessary filings with the Securities and Exchange Commission The New York Stock

Exchange and any other appropriate Federal or State governmental entities or regulatory

authorities in connection with the preparation and distribution of the Notice Proxy

Statement and Form of Proxy

RESOLVED FURTHER that the Authorized Officers and each of them acting alone is

hereby authorized empowered and directed to cause to be delivered prior to the Annual

Meeting to

all shareholders eligible to vote at the Annual Meeting copies of the Notice

Proxy Statement Form of Proxy and Annual Report and if necessary to secure a quorum

of shareholders a Reminder Notice all pursuant to

the Corporations bylaws and applicable

regulations

RESOLVED FURTHER that William L Lynch and Stewart M Landefeld are hereby

appointed as proxies of the Board of Directors to vote and act with respect to the shares of

common stock of this Corporation for which proxies will be solicited for use in connection

with the Annual Meeting

RESOLVED FURTHER that the Board of Directors hereby authorizes Broadridge Financial

Solutions Inc to act as Inspector of Elections for the Annual Meeting




HIGHLY CONFIDENTIAL



Appendix G Approval of Filing of S8 Form

Authorization of Filing of Registration Statement on FormSWHEREASWashington Mutual Inc the Company will ask its shareholders at the

Companys 2008 annual meeting to approve an increase in the number of shares of

Company common stock no par value the Common Stock issuable pursuant to the

Companys 2002 Amended and Restated Employee Stock Purchase Plan ESPP in

the

amount of 4000000 shares

WHEREAS to register the future issuance of the increased number of shares

pursuant to the ESPP the Company will file with the Securities and Exchange Commission

the SEC a Registration Statement on Form S8 the Form S8 and

WHEREAS the Form S8 will also register i Common Stock to be issued by the

Company in the future pursuant to the Companys 2003 Amended and Restated Equity

Incentive Plan the 2003 EIP 1994 Stock Option Plan the 1994 Plan and WaMuSavings Plan the Savings Plan and ii deferred compensation obligations under the

Companys Deferred Compensation Plan the DCP

NOW THEREFORE it is hereby

RESOLVED that the Company file the Form S8 with the SEC in accordance with

the Securities Act of 1933 and in conformity with the rules and regulations thereunder in

order to register i up to 75000000 shares of Common Stock in the aggregate that may be

offered and sold pursuant to the ESPP the 2003 EIP the 1994 Plan or the Savings Plan

and ii up to $50000000 of deferred compensation obligations that may be issued

pursuant to the DCP and that the Form S8 substantially in the form attached hereto as

Exhibit A is hereby authorized and approved

RESOLVED FURTHER that the executive officers of the Company or any of them

are authorized and directed to make such changes in the Form S8 and to do any and all

acts as they may deem necessary or advisable to cause the Form S8 to be filed and to

become effective

RESOLVED FURTHER that the executive officers of the Company or any of them

are authorized in their discretion to complete execute and file with the SEC any

amendments or posteffective amendments to the Form S8 with such provisions as the

executive officers executing the same may consider necessary or advisable and such other

documents as they in their discretion deem necessary or desirable to effect or withdraw the

Form S8 in accordance with the Securities Act and any other applicable federal or state

law and

RESOLVED FURTHER that upon the issuance of shares pursuant to the Form S8said shares shall be validly issued fully paid and nonassessable shares o

f Common Stock




HIGHLY CONFIDENTIAL



Appendix H Schedule of Officer Elections

Officer Elections

Kennedy Matthew none to First Vice President effective February 1 2008

Moore Robert none to First Vice President effective February 1 2008

Stearns Steve none to First Vice President effective February 1 2008

Taylor Susan none to Senior Vice President effective January 1 2008

Taylor Susan none to Assistant Secretary effective January 1 2008

Officer Terminations

Boyle Hugh F Senior Vice President to none effective January 31 2008

McMullen Kenneth Chester Vice President to none effective January 31 2008

Montgomery Susan E Vice President to none effective January 31 2008


APPROVED BY THE BOARD OF DIRECTORS MARCH 1 7 2008


HIGHLY CONFIDENTIAL


WASHINGTON MUTUAL INCBoard of Directors Meeting Minutes

Drii 1 2008

The Board of Directors of Washington Mutual Inc the Holding Company met

concurrently with the Board of Directors of Washington Mutual Bank the Bank on

April 1 2008 for a telephonic meeting

Directors Present

Stephen I Chazen Regina T Montoya

Anne V Farrell Michael K Murphy

Stephen E Frank Margaret Osmer McQuade

Kerry K Killinger Mary E Pugh

Thomas C Leppert William G Reed

Charles M Lillis Orin C Smith

Phillip D Matthews James H Stever

Directors Absent None

Management Present Advisors Present

Todd Baker Frank Cicero of Lehman Brothers

Carey M Brennan Phil Erlanger of Lehman Brothers

Thomas W Casey Huntley Garriott of Goldman Sachs

Ronald J Cathcart John Mahoney of Goldman Sachs

Daryl D David Lee Meyerson of Simpson Thacher

Stewart M Landefeld Todd Owens of Goldman Sachs

John McMurray Steve Wolitzer of Lehman Brothers

John Robinson

Stephen J Rotella

Robert J Williams

Craig E Tall

Susan R Taylor

Office of Thrift Supervision Management Present

Darrel W Dochow Regional Director

Scott M Polakoff Deputy Director

Timothy T Ward Senior Deputy Director an Chief Operating Officer

no


HIGHLY CONFIDENTIAL


Mr Killinger presided and called the meeting to order at 400 pm Pacific Daylight Time

and the undersigned served as secretary to the meeting All those present attended the

meeting by telephone management and Mr Killinger being together at the offices of the

Holding Company and could hear each other during the meeting All attendees were

present at the beginning of the meeting except for Mr Tall and the advisors from

Lehman Brothers and Goldman Sachs who joined later

Receive Input from OTS Senior Management

Mr Polakoff introduced himself Mr Ward and Mr Dochow and indicated that they had

important messages for the Board Mr Polakoff acknowledged the important decisions

to be made by the Board and the difficult process and complex analysis being undertaken

He indicated that the OTS would not pressure the Board into making any particular

decision but that the Board should know the OTSs view that capital needed to be

brought into the Bank and doing nothing was not an option He conveyed the importance

of keeping the OTS apprised of relevant events and decisions all of which would be

kept confidential and that OTS management would be available day and night to provide

support during the decision making process

Mr Dochow added that membership on the Holding Companys and Banks Boards was

identical and that consideration must be given to the Banks depositors as well as the

Holding Companys shareholders He expressed his satisfaction with the open and full

dialogue between OTS and Holding Company management throughout the process MrDochow reminded the Board of the OTS action to downgrade the Banks composite

rating in February and noted that further downgrades were possible He reviewed the

Banks capital ratios noting concerns about the Banks and the Holding Companys

ability to meet their appropriate capital ratios Ile acknowledged the challenge before the

Boards and stressed the importance of keeping the Bank safe and sound

Mr Dochow responded to a question from Mr Leppert responding positively regarding

managements responsiveness to the OTS He responded to a Directors question

regarding the appropriate amount of capital to be raised In response to another Directors

question Mr Polakoff indicated that the Board should ensure the Holding Company is

prepared with a media plan Mr Dochow expressed his belief that reporting negative

financial results with an announcement of having raised capital could be positive but

reporting results without such an announce rent would be very negative Mr Killinger

thanked Messrs Polakoff Ward and Dochow for joining the meeting The three

gentlemen then left the meeting by disconnecting from the telephone line

Minutes from the Board Meeting on March 17 and the Informational Briefings on

March 14 and March 25

Dlr Killinger submitted the minutes of the March 17 Board meeting and the March 14

and March 25 informational briefings On motion duly made and seconded the Board

unanimously approved the minutes

Messrs Garriott Mahoney and Owens from Goldman Sachs and Messrs Cice

Erlanger and Wolitzer from Lehman Brothers then joined the meeting

Doe 174350


HIGHLY CONFIDENTIAL


Review Financial Analysis

Management presented a series of updates relating to the financial condition of the

Holding Company including information responsive to questions and requests raised

previously by the Board

First Quarter 2008 Expected Results

Mr Casey presented his material summarizing the financial results expected for the first

quarter of 2008 While the net interest margin expanded due to a lower Fed Funds rate

the first quarter provision was expected to be approximately $34 billion or 26 times

charge offs of approximately $13 billion Mr Casey then reviewed with the Board the

Q1 2008 Forecast Update provided in the Board material He reported on the shrinkage

in the size of the balance sheet the impact on capital and responded to a Directors

question regarding the expected balance sheet run rate for the remainder of the year

Credit and Financial Outlook

Mr Casey then turned the Boards attention to the material provided on the Credit and

Financial Outlook and began the presentation by submitting a stresscase scenario

represented by an income statement balance sheet and related financial and capital

metrics for the years 2008 to 2012 The scenario assumed that $5 billion of capital had

been raised in a stressed environment with a high provision amount Mr Casey indicated

that the scenario was provided to assist the Board in its deliberations regarding the

amount of capital to be raised Mr Casey responded to several questions from Directors

concerning the impact of raising different amounts of capital and he and Mr McMurray

responded to questions concerning the provision Mr Casey walked the Board through

several key assumptions reflected in the scenario Messrs Casey and Killinger responded

to questions from Mr Reed regarding the assumptions the business model and

anticipated pricing of a capital transaction

Mr Tall joined the meeting during the discussion described above

Mr Rotella then reported to the Board on strategic plans to change the business model

The plans hinged primarily on accelerating the focus on retail distribution including

changing the home loans model significantly to focus on the retail sweet spot In

addition capital will be conserved by reducing balance sheet growth and by reducing

expenses overall Mr Rotella noted some of the actions anticipated to

be taken and the

resulting impacts noting corrections to some of the figures in the materials previously

provided to the Board He responded to several questions from Directors regarding

various aspects of the plans

Mr McMurray then presented an update on credit He reviewed the amounts charged off

in the loan portfolios in each of the last four quarters and as forecast for the current

quarter and the level of the Allowance for Loan and Lease Losses the ALLL for the

first quarter of 2008 In response to previous requests from the Board he presented a

probability analysis of remaining credit losses which related to four different loss

scenario drivers and resulted in sixteen different probability scenarios which each

4174350


HIGHLY CONFIDENTIAL


corresponded to a different range of forecast credit loss and to a different provision

amount Mr McMurray responded to several questions from Directors to confirm and

clarify their understandings of the credit loss scenarios and the corresponding

implications for loss assumptions timing of loss experience and provision amounts

Mr Casey then presented the implications ofa very high credit loss scenario noting that

the private equity firms examining the Holding Company had used their own assumptions

to predict credit losses and may be basing their analysis of the Holding Companys

prospects using a very high credit loss scenario He submitted financial information

projected for a scenario representing an extremely stressed environment and reviewed the

capital metrics in such a scenario with the Board He presented several risks that might

arise in such an environment even if capital had been raised including aggressive actions

by regulators and rating agencies

Capital Outlook

Messrs Casey and Williams then jointly made a presentation on capital Mr Casey

outlined the reasons and assumptions supporting managements recommendations to

raise additional capital and reduce the Holding Companys dividend to $001 per share

He indicated that under each capital raise scenario under consideration management

assumes that at least $2 billion of capital would be contributed by the Holding Company

to the Bank He and Mr Williams then walked the Board through the 2008 capital ratio

comparisons forecast for the Holding Company and the Bank in each of the low medium

and high provision scenarios if $0 $4 $5 or $6 billion of capital had been raised

Liquidity Outlook

Mr Williams presented an update on liquidity He reviewed changes to the Holding

Companys excess liquidity position from mid2007 to the end of the first quarter of

2008 He then submitted the stress case liquidity metrics noting that the Bank does not

meet the three six or twelve month excess funding capacity liquidity targets under the

stress case The presentation ended with a list of various funding sources and the

corresponding amounts of liquidity at risk for each source as well as information

concerning each funding sources sensitivity to ratings headline or regulatory risks

Equity Scenario

Mr Casey referred the Board to the Equity Case materials which had been provided for

the Board on BoardVantage on March 25 and were provided again in the material for this

meeting as requested by the Board

Investment Bankers Presentation

Mr Mahoney of Goldman Sachs and Mr Cicero of Lehman Brothers jointly presented

material previously provided to the Board entitled Confidential Presentation to

Olympics Board of Directors Mr Mahoney began the presentation by briefly reporting

that three bids had been received from private equity firms interested in purchasing

equity securities from the Holding Company and conversations were underway with

institutional investors One financial institution had submitted a bid to purchase the

Holding Company

Doc 74350


HIGHLY CONFIDENTIAL


Summary of Capital Raising Proposals

Mr Mahoney then reviewed the list of the private equity firms initially contacted and the

subsequent steps presentations proposals due diligence that winnowed down the firms

to the three final bids Mr Mahoney reviewed the relevant decision variables for

comparing the proposals generally and then provided specific information relating to

those variables for each of the bids from Titanium Carbon and BoronlOxygen He fully

compared and contrasted the proposals using the terms size structure governance and

other nonfinancial considerations as the basis for comparision Contingencies and

closing issues were reviewed focusing in particular on Carbons condition that the Bank

enter into a fiveyear term auto flow purchase agreement under which the Bank would be

required to purchase auto loans from certain auto manufacturers in which Carbon held an

interest

Summary of Flint Proposal

Mr Cicero then presented a summary of the financial institutions which had been

contacted for purposes of eliciting a proposal to buy the Holding Company and the

subsequent steps confidentiality agreements management presentations data room due

diligence in person due diligence that led to the final bid from Flint He noted that the

investment bankers had focused on those institutions expected to be able to execute in the

current environment He reviewed the key terms of Flints proposal noting the base value

offered per share and the possible adjustment based on better than expected performance

of the Banks home equity portfolio He reviewed Flints request for exclusivity and the

terms of proposed lockups He expressed the opinion that the bid indicated Flints

relatively low level of interest

Capital Raising Process

Mr Mahoney continued the presentation by reviewing the Holding Companys strategic

situation and then summarizing the rationale for raising capital noting the desirability of

exceeding capital targets in a stressed environment and the importance of providing a

cushion in a difficult credit environment that would held address concerns of rating

agencies and regulators He reviewed the benefits of raising capital by illustrating the

incremental impact on the target capital ratios of raising different amounts of capital in

the low medium and high credit provision scenarios He also showed the cost of raising

capital by illustrating the extent to which different amounts of capital raised at different

prices results

in ownership dilution and earnings per share dilution

At this point in the meeting the Directors asked numerous questions Mr Mahoney

responded to a question from Mr Frank regarding the extent to which existing

shareholders who participate in the capital raise would be diluted Several bankers

responded to a question from Mr Lillis concerning the advantages of holding a private

versus a public offering Mr Mahoney emphasized the risk associated with first publicly

announcing negative financial results and then attempting to raise capital publicly as

opposed to announcing financial results and the capital raise simultaneously MrMahoney noted that a private offering could be completed sooner than a public offering

and therefore prior to other institutions attempts to raise capital and prior to numerous


HIGHLY CONFIDENTIAL


anticipated earnings releases which might negatively impact the market Mr Cicero

noted that risks were reduced by raising capital privately given the capital markets

volatility and general economic uncertainty In response to an additional comment from

Mr Lillis Mr Wolitzer emphasized that he viewed speed to completion of a transaction

to be ofparamount importance

Mr Mahoney then outlined the form of the securities anticipated to be offered as well as

the approvals from shareholders and the OTS that would be required under NYSE and

OTS rules to fully effect the capital raise He reviewed a sample allocation of demand

among investors to illustrate the roles played by the primary private equity firm serving

as the anchor and the other investors He reviewed the calendar and timeline for

negotiations board deliberations and the goal of announcing a transaction in six days on

April 7 He reviewed a list of the investors being contacted as part of the second stage

including large institutional investors many of whom were current shareholders as well

as sovereign wealth funds and international banks

Mr Cicero then presented information on equity offerings announced by financial

services companies during 2007 and 2008 He discussed factors relating to the

anticipated pricing of the Holding Companys securities to be offered noting that

investors will focus on tangible book value In response to a question from Mr Murphy

Messrs Erlanger and Wolitzer discussed the difficulty of predicting the price at which the

Holding Companys stock would trade after announcement of the Holding Companys

financial results and the capital raise noting multiple factors reflected by the stock price

Mr McMurray left the meeting at this time

Analysis of Capital Raising Process

Mr Cicero presented considerations related to negotiating the capital issuance price

including the relationship between issuance prices and the Holding Companys tangible

book value per share Mr Erlanger responded to comments from Directors regarding the

prices bid by the private equity firms He reported on the degree to which the investment

bankers had aggressively identified firms as

possible sponsors for the offering and the

importance of finding experienced firms with deep pockets He reviewed the dual track

process by which the investment bankers pursued both a capital raise transaction and a

strategic buyer transaction Mr Cicero continued the presentation by reviewing the

extent to which he expects the Holding Companys stock price to be driven primarily by

the tangible book value until 2a 1O when he expects the price to begin to reflect greater

earnings power He also reviewed a discounted cash flow analysis with the Board tinder

different scenarios and noted that the Flint bid compared poorly to the other alternatives

under the discounted cash flow analysis He responded to a question from Mr Lillis

regarding assumptions Mr Cicero then submitted numerous valuation metrics for the

equity case under different credit scenarios He closed the presentation with information

regarding valuing the warrants

The Board then raised numerous questions and engaged in a thorough discussion with

management and their advisors Messrs Wolitzer and Mahoney responded to a question

from Mr Stever regarding the factors already reflected

in

the Holding Companys current

Doc 4174350


HIGHLY CONFIDENTIAL


stock price Mr Wolitzer commented on the extent to which the news about the collapseof Bear Steams had disrupted the financial marketplace In response to a question from

Ms Pugh Mr Mahoney reviewed the extent to which competition existed among the

private equity firms Mr Killinger responded to a Directors question by thoroughly

reviewing the pros and cons of each of the different equity bids from his perspective

Management and Mr Meyerson responded to a question from Mr Leppert by describing

the regulatory issues associated with the auto flow agreement proposed by Carbon

Mr Killinger responded to a question from Mr Lillis regarding timing by reviewing the

short time line and the steps that must be taken in order to make an announcement early

in the following week In response to a question from Ms Pugh Messrs Wolitzer and

Erlanger discussed the negotiation strategy

Flint Proposal

The Board then engaged in an active discussion with management and the Boards

advisors regarding the bid from Flint and its relative value as compared to the prospect of

raising capital including the opportunity that it represented and the level of interest being

indicated by Flint The Holding Companys advisors discussed a range of possible

responses to the bid

The representatives from Goldman Sachs and Lehman Brothers left the meeting at this

time as did Messrs Tall and Casey

Issues Related to Capital Raise Shareholder pproval

Redacted

7


HIGHLY CONFIDENTIAL


Executive Session

At 620 pm Mr Killinger asked that the meeting go into executive session All

members of management left the meeting at this time other than Messrs David

Landefeld Rotella and Killinger Mr Meyerson also remained Mr David then

scussed the pros and cons of raising different amounts of anital

submitted his presentation on compensation issues related to the recapitalization plan and

provided information in response to an earlier request from the Board reviewing

executive managements economic incentives to pursue the different strategic

alternatives After answering questions from the Board Messrs David and Rotella left

the meeting The Board then engaged in a thorough discussion regarding the Holding

Companys financial condition and the relative merits of the different strategic and

financial alternatives for the Holding Company under the circumstances The Board fully

Redacted

seeking capital and how much information about the Holding Company would be

a r Iona quest ions including a question about what other institutions might also be

Messrs Wo itzer and Erlanger rejoined the meeting to respond

as being clearer than first anticipated noting the strong direction provided by the OTSthe number of firms and institutions initially contacted and the relatively few choices now

n response to a Directors request Mr Meyerson framed the decisions before the Board

rovided to the wall crossed institutional investors as compared to private equity firms

before the Board

The executive session concluded at

Respectfully Submitted Susan RT ylor

174350


HIGHLY CONFIDENTIAL

AttorneyClient Privileged Work Product



WASHINGTON MUTUAL BANKBoard of Directors Conversation with OTS

Saturday April 5 2008

The Office of Thrift Supervision OTS requested a meeting with the Boards of

Directors of Washington Mutual Inc the Holding Company and Washington

Mutual Bank the Bank on Saturday April 5 2008 at 400 pm Notes of that

conversation follow

Directors Present

Stephen 1 Chazen

Anne V Farrell

Stephen E Frank

Kerry K Killinger

Thomas C Leppert

Phillip D Matthews

Regina T Montoya

Michael K Murphy


Mary E Pugh

Wm G Reed Jr

Orin C Smith

Director Absent James H Stever

Management Presen

Todd Baker

Carey M Brennan

Thomas W Casey

Ronald J Cathcart

Stewart M Landefeld

John Robinson

Stephen J Rotella

Susan R Taylor

Robert J Williams

Advisor Presen

Lee Meyerson of Simpson Thacher

Bartlett LLP

OTS Management Present

John M Reich Director

Scott M Polakoff Senior Deputy Director and Chief Operating Officer

John E Bowman Deputy Director Chief Counsel

Darrel W Dochow Regional Director West Region

Kevin Corcoran Deputy Chief Counsel Business Operations

No material was provided for this briefing Ms Taylor acted as Secretary

Doc 178106


HIGHLY CONFIDENTIAL


Robert Williams provided background regarding the Holding Companys progressin

its efforts to raise additional capital He reported that Titanium had committed

to acting as lead investor and providing up to $2 billion He also reported that

Messrs Rotella and Casey had been speaking about the transaction with several

of the Holding Companys large institutional shareholders all of which had signed

confidentiality agreements with the Holding Company and had received positive

feedback from each of them concerning their interest in investing Mr Williams

described the next steps that needed to take place in order to announce a

transaction within the next three days Mr Killinger described the status of

conversations with Flint noting that due diligence was still underway He noted

that the decision concerning a capital raise transaction or a strategic transaction

with Flint would be subject to the Holding Companys Boards deliberations and

approval

Management then responded to several questions from the OTS regarding

progress Mr Reich asked about the probability of raising $5 billion or more of

capital Mr Killinger responded that the investment bankers were encouraged

but that

it was early in the discussions with the existing institutional shareholders

Mr Reich then presented the views of the OTS to the Holding Companys Board

and to management He reported that the OTS was very concerned about

conditions in the banking industry as a whole and Washington Mutual

Mr Reich reported that the OTS viewed the Holding Company as being in critical

condition and that if it did not raise at least $5 billion of capital or enter into a

strategic merger agreement by April 15 the OTS would pursue a downgrade and

enforcement action

In response to a question from Ms Pugh Mr Polakoff reported that the OTS did

not prefer one alternative over another but that

in

his view the Flint bid had more

certainty at the present time because the Titanium offer only represented a

portion of the total capital the Holding Company needs to raise He indicated that

notwithstanding managements optimism about the likelihood of a successful

capital raise he was skeptical

In response to a question from Mr Matthews regarding the financial system

environment generally Mr Reich reported that the regulators have concerns

about many institutions and that bank failures are being discussed Many

downgrades have occurred and more are expected Mr Polakoff added that the

environment was leading institutions that were previously friends with each other

to act opportunistically Secure relationships have evaporated

Doc 178106 2


HIGHLY CONFIDENTIAL


HIGHLY CONFIDENTIAL

Attorney-Client Privileged Work Product WM: Confidential Limited Access

WASHINGTON MUTUAL, INC. WASHINGTON MUTUAL BANK

Board of Directors Meeting Minutes

Sunday, April 6, 2008

The Board of Directors of Washington Mutual, Inc. (the "Holding Company") met concurrently with the Board of Directors of Washington Mutual Bank (the "Bank") on Sunday, April 6, 2008, for a special meeting.

Directors Present:

Stephen I. Chazen Anne V. Farrell Stephen E. Frank Kerry K. Killinger Thomas C. Leppert Charles M. Lillis Phillip D. Matthews

Directors Absent: None

Management Present:

Todd Baker Carey M. Brennan Thomas W. Casey Ronald J. Cathcart Daryl D. David Stewart M. Landefeld Stephen J. Rotella Charles Smith Craig E. Tall Susan R. Taylor Robert J. Williams

Regina T. Montoya Michael K. Murphy Margaret Osmer McQuade Mary Pugh Wm. G. Reed, Jr. Orin C. Smith James H. Stever

Advisors Present:

Huntley Garriott, of Goldman Sachs John Mahoney, of Goldman Sachs Todd Owens, of Goldman Sachs

Frank Cicero, of Lehman Brothers Phil Erlanger, of Lehman Brothers Steve Wolitzer, of Lehman Brothers Jason Trock, of Lehman Brothers

Lee Meyerson, of Simpson Thacher & Bartlett LLP

The materials for the meeting, including a PowerPoint presentation prepared by Goldman Sachs and Lehman Brothers, copies of the Investment Agreement and the Securities Purchase Agreement, a summary of the terms of both agreements prepared by Simpson Thacher and Bartlett, and correspondence with Flint were posted to BoardVantage prior to the meeting.

Doc #178377


HIGHLY CONFIDENTIAL

WM: Confidential Limited Access

Mr. Killinger presided and called the meeting to order at 10:00 a.m. Pacific Daylight Time and the undersigned served as secretary to the meeting. Messrs. Chazen, Leppert, Matthews, Murphy, Smith, Stever and Tall attended the meeting by telephone. All others attended the meeting in person in the Boardroom at the WaMu Center in Seattle, Washington.

Mr. Killinger welcomed everyone to the meeting, thanking the Holding Company's Board members for their high level of engagement over the past several weeks. Ms. Taylor entered the room and distributed the material for the Holding Company's Board which had been posted electronically to BoardVantage earlier in the morning. Mr. Killinger asked the investment bankers/financial advisors to present.

Investment Bankers J Presentation Mr. Mahoney of Goldman Sachs, and Mr. Cicero of Lehman Brothers, jointly presented material previously provided to the Holding Company's Board, entitled "Confidential Presentation to Board of Directors, Discussion Materials - Project Olympic." Mr. Cicero began the presentation by briefly reporting that a preliminary agreement had been reached with Titanium to invest $2 billion in newly issued equity securities of the Holding Company, and that negotiations would continue with the "wall crossed" institutional investors through the following day, Monday. Pricing was anticipated to occur Monday evening with an announcement early Tuesday morning. The pricing of the transaction would be exposed to one day of market risk. He reported that conversations had also continued with Flint's advisors and that information had continued to be exchanged, but that there have been no improvements to the terms of Flint's offer.

Investment Structure and Process Mr. Mahoney then reviewed the terms of Titanium's proposed investment, talking the Holding Company's Board through each feature listed on the pages entitled, "TPG Capital Investment - Term Sheet" and "Contingent Convertible Non-Voting Preferred Stock - Term Sheet." He explained how the security had been deSigned to be outstanding only until conversion to common equity after receipt of shareholder approval. He responded to several questions from Directors, including questions about: the price reset feature, the NYSE rule concerning approval of certain common stock issuances and the current tangible book value of the Holding Company's common stock. He responded to a question from Mr. Frank by describing the intensity of the most recent negotiations and the impact of Friday's stock price decrease on pricing and other aspects of the negotiations. Mr. Mahoney then described the extent to which the terms of the investments from other investors, whether private equity firms or institutional investors, would be the same or different from the terms of Titanium's investment. Mr. Erlanger reviewed the list of other potential private equity investors, noting that Carbon was no longer among them due to its requirement that an auto flow purchase agreement be entered into simultaneously with the investment Mr. Erlanger reviewed the list of "Public 'WallCrossed' Potential Investors" and described the rocess for communicatin with

Doc #178377 2


HIGHLY CONFIDENTIAL


likelihood they would be able to participate due to time constraints. Mr. Erlanger emphasized the importance of marketing to all the identified investors over the next 24-to-36 hour period. Mr. Erlanger responded to a number of questions from the Directors concerning the various potential investors and the likely terms of their investments.

Analysis of Capital Raise Mr. Mahoney then presented a detailed analysis of the capital raise, which included analysis of the impact of the conversion of the preferred stock on the relevant capital ratios, the impact of the warrants and the conversion of the preferred stock on earnings per share, and the impact of the warrants on the investor price and an analysis of discounted cash flows. The discounted cash flow analysis included analysis at different warrant levels using different assumptions, and showed results over a five-year period. He also reviewed the features of the preferred stock that would incent shareholders to vote for the conversion and reported that it was highly likely that shareholders would approve the conversion. Mr. Mahoney responded to questions from the Directors.

Review and Analysis of Flint Proposal Mr. Cicero presented the terms of the proposal from Flint to acquire all of the shares of the Holding Company by reviewing each of the terms listed on the page entitled "Flint Proposal." He then reviewed the structure of Flint's payment offer and described the contingent payment portion of the offer in detail. Mr. Killinger briefed the Board on his correspondence with Flint. The Holding Company's Board then engaged in an active and lengthy discussion with management and its advisors concerning Flint, focusing on their offer, the extent to which the offer was based on contingent performance, the scope of Flint's due dlligence requests and the due diligence still to be completed, the SUbstance and tone of their negotiations, their communications with regulators, and their perceived level of interest in acquiring the Holding Company. In response to a question, Mr. Wolitzer discussed the possibility that Flint is interested in acquiring the Holding Company but is waiting to be opportunistic and could take actions that disrupt the capital raising process. In response to Directors' questions, the financial advisors and management then described the importance of getting through the next trading day without market disruption in order to announce a transaction at the current pricing. Mr. Cicero then presented the discounted cash flow analysis of Flint's offer. The offer represented a price per share of common stock that was significantly less than the proposals received from the private equity investors to purchase a minority interest in the Holding Company's stock. The Holding Company's Board then asked the investment bankers several more questions concerning negotiations with Flint. In response to one question, Messrs. Meyerson and Landefeld framed some of the issues that would be before the Holding Company's Board if Flint provided an updated offer the next day, and the need to consider both execution risk and value. Mr. Wolitzer also noted that an acquisition in the future was not precluded by the capital raise. In response to a Director's question about whether the amount of capital to be raised should be capped, Messrs. Killinger and Rotella reminded the Holding Company's Board that the OTS had said that $5 billion was a minimum and that it might be prudent to expand to $6 billion or more if sufficient interest exists.

Doc #178377 3


HIGHLY CONFIDENTIAL


Summary of Principal Terms of Investment

Redacted

Review of Press Release Mr. Casey then reviewed the contents of the preliminary press release that had been provided to the Holding Company's Board in advance of the meeting, and noted that the Holding Company's Board was reviewing it rather than the Audit Committee, in order to allow the Holding Company's Board to fully assess and analyze the financial information being presented, and the impact of the financing. He explained that the press release focused on the transaction and only a few key financial results and metrics. A second press release reporting all of the Holding Company's earnings results for the first quarter would be released on April 15. Mr. Casey answered questions about timing and about the extent to which the press release scheduled for release on April 15 would include the same information that the "wall crossed" institutional investors had received.

Discussion of Duties of Boards ofWMI and WMB

Redacted

its adoption of resolutions in March to resolve the issues raised in conjunction with the downgrade by the OTS of the composite rating.

Doc #178377 4

WMI_PC_08788107.00005ARestricted For Use in Connection with Plan Confirmation Only

HIGHLY CONFIDENTIAL

REDACTED


Overall Transaction - Bankers' Analysis Mr. Landefeld reported that both Lehman Brothers and Goldman Sachs had agreed to deliver opinions to the Holding Company's Board assessing their review of the reasonableness of the terms of the equity transaction. He asked the investment bankers to describe the terms of the letters that they intended to present. Mr. Mahoney summarized the terms of the letter to be delivered by Goldman Sachs. He reviewed the scope of the opinion, the assumptions identified therein, and the general content of the letter. He indicated that the opinion would focus only on the equity investment and would not compare it to other strategies. The letter would indicate that the investment was a reasonable means of obtaining financing. Mr. Wolitzer described the letter to be delivered by Lehman Brothers, noting similarities and differences from the Goldman Sachs' letter.

In response to a question from Mr. Frank, Mr. Wolitzer noted that his firm was not viewing the transaction and the strategic sale as mutually exclusive alternatives and that it was not appropriate for them to advise the Holding Company's Board regarding which option was superior. He distinguished between the two alternatives, noting that one was strategic while the other was an ongoing operating alternative.

Redacted

The Holding Company's Board then engaged in an active and thorough discussion. Mr. Ullis noted that given the current two options, he would choose the recapitalization and therefore the bankers' views were needed on the recapitalization. Mr. Killinger indicated that the recapitalization transaction would not preclude selling the Holding Company in the future, and that the Holding Company's Board should consider whether shareholders would get a better value by accepting the capital now, getting through the current difficult period and possibly having more potential acquirers in the future. One Director emphasized that while the investment bankers approached many potential acauirers. onlv one had submitted an offer.

Doc #178377 5


HIGHLY CONFIDENTIAL

REDACTED


Redacted

OTS Matters

The meeting of the Washington Mutual Bank Board then adjourned.

Adopt Resolutions to Approve Transaction

teo Ing ompany soar wou cons! er au onza Ion for raising up to $7 billion of capital, noting that, based on discussions with investors, it might be practical to raise up to $7 billion without adversely affecting the pricing terms and that having a greater capital cushion might be very prudent in the current environment. Mr. Casey responded to a Director's question regarding dilution, noting that there was the potential for buying back stock if the capital raised ultimately exceeded what was needed. He indicated that a larger amount of capital would reduce certain risks significantly, such as risks related to rating agency actions and actions by the OTS. Mr. Baker indicated that the stock trading price is expected to be based on tangible book value so the additional amount of capital raised would not likely impact the price in the market. The Holding Company's Board weighed a number of different factors.

Executive Session The Holding Company's Board then went into executive session. All advisors other than Mr. Meyerson left the meeting. All members of management left the meeting, other than Messrs. Killinger and Landefeld, who then left after answering questions and participating in discussion.

The Holding Company's Board engaged in a thorough discussion reviewing the information and input received from management and advisors, including the magnitude of the capital raising, and the risks and benefits of this versus other transactions. Upon a motion made and duly seconded, the Holding Company's Board adopted the resolutions described by Mr. Landefeld earlier in the meeting. Discussion continued regarding the amount of capital to be raised. Mr. Frank agreed to contact the OTS.

At 1 :45 p.m., the meeting of the Holding Company's Board went back into regular session and Messrs. Baker, Brennan, Casey, Cathcart, Killinger, Landefeld, Rotella, and Williams, and Ms. Taylor joined the meeting.

Doc #178377 6


HIGHLY CONFIDENTIAL


WMI Annual Meetina

Redacted

The meeting of the Washington Mutual, Inc. Board then adjourned and the meeting of the Washington Mutual Bank Board reconvened.

WMB Regulatory Capital Matters Mr. Williams presented material on capital and reported on the anticipated receipt of capital by the Bank, which was estimated at $2 billion if $5 billion of capital is raised by the Holding Company. He reviewed the forecast capital ratios for the Bank and the Holding Company. Mr. Casey responded to a question from Mr. Reed regarding the adequacy of capital at the Bank level given the different cumulative loss scenarios.

The meeting of the Washington Mutual, Inc. Board then reconvened and continued to meet jointly with the Washington Mutual Bank Board.

Readoption of Resolutions

I Redacte~pon a munon OUly mao: an: :e~naeo, t:e resolUtIOns set IOrm on "Appendix A" were unanimously approved by the Holding Company's Board.

Mr. Killinger indicated that there would be an update for the Holding Company's Board at 5:00 p.m. on Monday, and that later Sunday evening Mr. Frank would speak with the regulators.

The meeting adjourned at 2:00 p.m.

Appendices:

A - Approval of Capital Investment

Doc #178377 7


HIGHLY CONFIDENTIAL

SUMMARY OF BOARD RESOLUTIONS FOR WASHINGTON MUTUAL, INC.

INVESTMENT AGREEMENT; SECURITIES PURCHASE AGREEMENTS

III Approval of investment agreement

III Approval of securities purchase agreements

III Authorization of actions to ensure exclusion from anti-takeover provisions

III Approval of exclusion from rights agreement

APPENDIX A

CONVERTIBLE PREFERRED STOCK; ISSUANCE OF COMMON AND PREFERRED STOCK AND WARRANTS

III Authorization of terms of the convertible preferred stock

III Authorization of filing of preferred stock articles of amendment

III Approval of issuance of common stock, convertible preferred stock and warrants in the transaction

AMENDMENT TO ARTICLES OF INCORPORA TlON AND BYLAWS

III Approval of amendment to the articles of incorporation authorizing creation of blank check common stock and an increase in the number of authorized shares of common stock

., Approval of amendment to the bylaws to increase board size

REGULATORY FILINGS AND CONSENTS

III Authorization of governmental and regulatory filings necessary for approval of the transactions contemplated by the investment agreement and the securities purchase agreements

III Approval of blue sky registrations and listing of shares on the New York Stock Exchange

III Authorization of registration statements

MISCELLANEOUS

III Approval of engagement of financial advisors

• Approval of general enabling resolutions

Doc #178377 A-1


HIGHLY CONFIDENTIAL

RESOLUTIONS OF THE BOARD OF DIRECTORS OF WASHINGTON MUTUAL, INC.

APRIL 6, 2008

WHEREAS, unprecedented challenges continue to face Washington Mutual, Inc. (the "Corporation") as a result of continuing disruptions in the mortgage and credit markets;

WHEREAS, as a result of such challenges, senior management of the Corporation has engaged financial advisors to explore and assist senior management in evaluating all strategic alternatives available to the Corporation during this challenging time;

WHEREAS, senior management has concluded that a series of actions be taken to, among other things, strengthen the Corporation's capital;

WHEREAS, such actions include undertaking significant business model changes, the issuance and sale of additional shares of the Corporation's common stock, new series of contingent convertible perpetual non-cumulative preferred stock and warrants;

WHEREAS, senior management is recommending to this Board of Directors that such actions be taken on the basis that they represent the best strategy for preserving and enhancing the franchise value of the Corporation for the benefit of its shareholders; and

WHEREAS, the financial advisors retained by senior management have confirmed that the actions being recommended by senior management are commercially reasonable to the Corporation under the currently existing market conditions.

APPROVAL OF AGREEMENTS

RESOLVED, that it is advisable and in the best interests ofthe Corporation and its shareholders for the Corporation to approve a private offering by the Corporation of Investor Shares (as defined below) and Investor Warrants (as defined below) pursuant to the terms of the Investment Agreement by and among the Corporation, Olympic Partners, LP, a Delaware limited partnership ("Olympic Partners"), and Titanium Partners VI, LP, a Delaware limited partnership Partners" and together with Olympic Partners, the "Investors"), substantially in the form presented to this Meeting (the "Investment Agreement"); and further

Doc #178377 A-2


HIGHLY CONFIDENTIAL

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders for the Corporation to approve a private offering by the Corporation of Public Preferred Purchaser Shares (as defined below) pursuant to the terms of the Public Preferred Securities Purchase Agreement by and among the Corporation and the purchasers party thereto (the "Public Preferred Purchasers"), substantially in the form presented to this Meeting (the "Public Preferred Purchase Agreement"); and further

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders for the Corporation to approve a private offering by the Corporation of Common Stock Purchaser Shares (as defined below) pursuant to the terms of the Common Stock Purchase Agreement by and among the Corporation and the purchasers party thereto, the "Common Stock Purchasers"), substantially in the form presented to this Meeting (the "Common Stock Purchase Agreement"); and further

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders for the Corporation to approve a private offering by the Corporation of Public Warrant Shares (as defined below) pursuant to the terms of the Public Warrant Purchase Agreement by and among the Corporation and the purchasers party thereto, the "Public Warrant Purchasers" and collectively with the Public Preferred Purchasers and the Common Stock Purchasers, the "Purchasers" and collectively with the Investors, the "Investor Parties"), substantially in the form presented to this Meeting (the "Public Warrant Purchase Agreement" and together with the Public Preferred Purchase Agreement and the Common Stock Purchase Agreement, the "Purchase Agreements" and collectively with the Investment Agreement, the "Agreements"); and further

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders for the Corporation to enter into, perform its obligations under and consummate the transactions under the Agreements pursuant to which, among other things:

(i) the Corporation agrees, subject to the terms and conditions of the Investment Agreement, to sell to the Investors, and each such Investor severally and not jOintly will agree to purchase from the Corporation, as an investment in the Corporation, shares of a series of contingent convertible non-cumUlative non-voting perpetual preferred stock, no par value, of the Corporation (the "Series T Convertible Preferred Stock" or the "Investor Convertible Preferred Stock"), at a price per share of Investor Convertible Preferred Stock equal to $100,000 in cash, which the Board of Directors of the Corporation (the determines to be adequate consideration for such Investor Convertible Preferred Stock, and

(ii) the Corporation agrees, subject to the terms and conditions of the Investment Agreement (including any warrant or other certificates attached thereto), to sell to the Investors, and each such Investor severally and not jointly will agree to

Doc #178377 A-3


HIGHLY CONFIDENTIAL

purchase from the Corporation, as an investment in the Corporation, shares of Common Stock (as defined below), no par value, of the Corporation (the "Investor Common Stock" and together with the Investor Convertible Preferred Stock, the "Investor Shares") and warrants to purchase shares of Common Stock (as defined below) (the "Investor Warrants"). at price per share of Investor Common Stock equal to $8.75 in cash (or such other amount as may be determined by the Transaction Committee (defined below», which the Board of Directors determines to be adequate consideration for such Investor Common Stock, and

(iii) the Corporation agrees, subject to the terms and conditions of the Public Preferred Purchase Agreement, to sell to the Public Preferred Purchasers, and each such Public Preferred Purchaser severally and not jointly will agree to purchase from the Corporation, as an investment in the Corporation, shares of a series of contingent convertible non-cumulative non-voting perpetual preferred stock, no par value, of the Corporation (the "Series S Convertible Preferred Stock" and together with the Investor Convertible Preferred Stock, the "Convertible Preferred Stock") and shares of Common Stock, no par value, of the Corporation (the "Public Preferred Purchaser Common Stock" and together with the Series S Convertible Preferred Stock, the "Public Preferred Purchaser Shares"), at a price per share of Series S Convertible Preferred Stock equal to $100,000 in cash and a price per share of Public Preferred Purchaser Common Stock equal to $8.75 in cash (or such other amount as may be determined by the Transaction Committee). each of which the Board of Directors determines to be adequate consideration for such Public Preferred Purchaser Share, and

(iv) the Corporation agrees, subject to the terms and conditions of the Common Stock Purchase Agreement, to sell to the Common Stock Purchasers, and each such Common Stock Purchaser severally and not jointly will agree to purchase from the Corporation, as an investment in the Corporation, shares of Common Stock, no par value, of the Corporation (the "Purchaser Common Stock"), at a price per share of Purchaser Common Stock equal to $8.75 in cash, each of which the Board of Directors determines to be adequate consideration for such Purchaser Common Stock; and

(v) the Corporation agrees, subject to the terms and conditions of the Public Warrant Purchase Agreement, to sell to the Public Warrant Purchasers, and each such Public Warrant Purchaser severally and not jointly will agree to purchase from the Corporation, as an investment in the Corporation, shares of Series S Convertible Preferred Stock, at a price per share of Series S Convertible Preferred Stock equal to $100,000 in cash, which the Board of Directors determines to be adequate consideration for such Series S Convertible Preferred Stock, and

(vi) the Corporation agrees, subject to the terms and conditions of the Public Warrant Purchase Agreement, to sell to the Public Warrant Purchasers, and each such Public Warrant Purchaser severally and not jointly will agree to purchase from the Corporation, as an investment in the Corporation, shares of Common

Doc #178377 A-4


HIGHLY CONFIDENTIAL

Stock, no par value, of the Corporation (the "Public Warrant Common Stock" and together with the Series S Convertible Preferred Stock purchased by the Public Warrant Purchasers, the "Public Warrant Purchaser Shares") and warrants to purchase shares of Common Stock (the "Public Warrants" and together with the Investor Warrants, the "Warrants"), at price per share of Public Warrant Common Stock determined in the manner set forth in the Agreements, and further

RESOLVED, that the Investment Agreement and the transactions contemplated thereby, including the purchase and sale of the Investor Shares and the Investor Warrants (the "Investment"), are advisable and consistent with, and in furtherance of, the business strategies and goals of the Corporation; and further

RESOLVED, that the Public Preferred Purchase Agreement and the transactions contemplated thereby, including the purchase and sale of the Public Preferred Purchaser Shares (the "Public Preferred Purchase"), are advisable and consistent with, and in furtherance of, the business strategies and goals of the Corporation; and further

RESOLVED, that the Common Stock Purchase Agreement and the transactions contemplated thereby, including the purchase and sale of the Purchaser Common Stock (the "Common Stock Purchase"), are advisable and consistent with, and in furtherance of, the business strategies and goals of the Corporation; and further

RESOLVED, that the Warrant Purchase Agreement and the transactions contemplated thereby, including the purchase and sale of the Warrant Purchaser Shares and the Public Warrants (the "Public Warrant Purchase" and together with the Public Preferred Purchase and the Common Stock Purchase, the "Purchase" and together with the Investment, the "Transactions") are advisable and consistent with, and in furtherance of, the business strategies and goals of the Corporation; and further

RESOLVED, that the Agreements be, and each hereby is, in the form presented to this Meeting, and the Chairman and Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, any Executive Vice President, the Treasurer, any Senior Vice President reporting directly to the Treasurer, and the Senior Vice President and Controller of the Corporation (collectively, the "Authorized Officers") and any officer of the Corporation designated by one of the Authorized Officers be, and each of them hereby is, authorized, on behalf of and in the name of the Corporation, to execute and deliver such agreements in the forms presented to this Meeting, and, in connection therewith, with such changes therein or thereto as the officer or officers executing the same shall approve, which approval shall be conclusively evidenced by such execution and delivery; and further

Doc #178377 A-5


HIGHLY CONFIDENTIAL

AUTHORIZATION FOR ENSURING EXCLUSION FROM ANTI-TAKEOVER PROVISIONS

RESOLVED, that for purposes of Section 238.19.040 of the Washington Business Corporation Act, the entry by the Corporation and [ ]1 (together, the "Major Stockholders") into the applicable Agreement to which such Major Stockholder is party, the issuance of Investor Shares or Purchaser Shares, as the case may be (including the conversion of the Convertible Preferred Stock into Common Stock and the exercise of the Warrants for Common Stock) and the consummation by such Major Stockholder of the transactions contemplated thereby, is hereby approved; and further

RESOLVED, that in response to the letters received from each Major Stockholder seeking unanimous approval prior to becoming a "Major Stockholder" for purposes of Article X of the Articles of Incorporation (as defined below), each such Major Stockholder becoming a "Major Stockholder" pursuant to the entry by the Corporation and such Major Stockholder into the applicable Agreement to which such Major Stockholder is party, the issuance of shares (including the conversion of the Convertible Preferred Stock into Common Stock and the exercise of the Warrants for Common Stock) and the consummation by such Major Stockholder of the transactions contemplated thereby, is hereby unanimously approved; and further

EXCLUSION FROM RIGHTS AGREEMENT

RESOLVED, that the entry by the Corporation and the Investors into the Investment Agreement, the issuance of the Investor Shares (including the conversion of the Convertible Preferred Stock into Common Stock and the exercise of the Warrants for Common Stock) and the consummation by the Investors of the transactions contemplated thereby is hereby approved for purposes of, and shall not result in the Investors becoming an "acquiring person" for purposes of, the Rights Agreement of the Corporation, dated as of December 20, 2000; and further

CONVERTIBLE PREFERRED STOCK

RESOLVED, that there is hereby created out of the authorized and unissued shares of preferred stock of this Corporation a series of contingent convertible non-cumulative non-voting perpetual preferred stock designated as the "Series S Contingent Convertible Non-cumulative Non-voting Perpetual Preferred Stock" to be sold in accordance with the Public Preferred Purchase Agreement and in one or more transactions exempt from the registration requirements of the

I The Board of Directors amended and restated this Resolution on April 7, 2008.

Doc #178377 A-6


HIGHLY CONFIDENTIAL

Securities Act (the "Series S Convertible Preferred Stock Offering"), The number of shares constituting such series shall not exceed 100,000, which amount includes shares which may be issued as a paid-In-kind dividend. The stock in such series shall have no par value and the liquidation preference of the Series S Convertible Preferred Stock shall be $100,000 per share; and further

RESOLVED, that there is hereby created out of the authorized and unissued shares of preferred stock of this Corporation a series of contingent convertible non-cumulative non-voting perpetual preferred stock designated as the "Series T Contingent Convertible Non-cumUlative Non-voting Perpetual Preferred Stock" to be sold in accordance with the Investment Agreement and in one or more transactions exempt from the registration requirements of the Securities Act (the "Series T Convertible Preferred Stock Offering"), The number of shares constituting such series shall not exceed 100,000, which amount includes shares which may be issued as paid-in-kind dividends. The stock in such series shall have no par value and the liquidation preference of the Series T Convertible Preferred Stock shall be $100,000 per share; and further

RESOLVED, that each series of the Convertible Preferred Stock described above shall have the rights, preferences and limitations set forth in the designation for such series set forth in the Preferred Stock Articles of Amendment (as defined below), substantially in the form attached hereto as Exhibit A, with such completions, determinations, changes and modifications as may be approved by a committee of the Board of Directors (the "Transaction Committee") consisting of Kerry K. Killinger, Stephen E. Frank and Charles Lillis; and further

RESOLVED, that the Board hereby authorIzes, and delegates the authority to, the Transaction Committee (a) to designate, finalize, determine and complete (it being understood that this authority includes without limitation making appropriate modifications and changes to the attached designation) the preferences, limitations, voting powers and relative rights of each series of the Convertible Preferred Stock, (b) to determine the final number of shares of Common Stock and Warrants to be issued pursuant the Agreements and the price therefor, in each case subject to the limits specified in these resolutions; and further

RESOLVED, that the authorization and delegation in the immediately preceding resolution shall include, without limitation, the authority to determine the number of shares of each series of the Convertible Preferred Stock to be authorized, to determine the dividend rates and whether such rates are fixed, fixed-to-floating or floating, or are at a percentage that is greater than the dividend rate applicable to the Corporation's Common Stock (and to make appropriate modifications in other provisions to reflect such rates), to provide for paid-in-kind dividends, to determine anti-dilution provisions, to determine the liquidation amount, to determine the situations In which each series of the Convertible Preferred Stock will convert into Common Stock (including without limitation the terms of such provisions), to designate circumstances involving amendments to the Articles of Incorporation as amended or involving mergers or other combinations or similar events in which

Doc#i78377 A-7


HIGHLY CONFIDENTIAL

holders of each series of the Convertible Preferred Stock may have voting rights, to determine the consideration to be received by holders of each series of the Convertible Preferred Stock upon reorganization, merger or similar events, to approve the form of any stock certificate and to prepare and authorize the filing of articles of amendment for each series of the Convertible Preferred Stock with the Secretary of State of the State of Washington; provided, however, that (i) the number of shares of Series S Convertible Preferred Stock and Series T Convertible Preferred Stock authorized shall not exceed 100,000 shares for each series of the Convertible Preferred Stock (provided, that the combined number of shares of either series initially issued by the Corporation shall not exceed 70,000), (ii) the liquidation preferences shall not exceed $100,000 per share, (iii) the dividend rate shall not exceed the greater of (x) the equivalent dividends declared on the Common Stock and (y) 17% per annum, and (iv) the number of Common Stock into which each share of Convertible Preferred Stock may be converted shall not exceed 1,000,000,000 (reflecting an initial conversion price of no less than $7.00per share of Common Stock); and further

RESOLVED, that the maximum number of shares of Common Stock to be issued by the Corporation in accordance with the terms of the Agreements sha~1 not exceed 1,000,000,000 and the price therefor shall not be less than $7.00; and further

RESOLVED, that maximum number of shares of Common Stock into which a Warrant will convert shall not exceed 25% of the shares of Common Stock purchased by the holder of a Warrant with a purchase price thereof determined in accordance with the terms of the Investment Agreement; and further

RESOLVED, that the Corporation be, and hereby is authorized and, upon required shareholder and regulatory approvals having been obtained, directed to reserve for issuance upon conversion of the Convertible Preferred Stock such number of shares of Common Stock as may be sufficient and necessary from time to time for issuance upon conversion of all of the Convertible Preferred Stock issued, taking into account any and all adjustments in the conversion rate or price; and further

PREFERRED STOCK ARTICLES OF AMENDMENT

RESOLVED, that in connection with the Investment Agreement and the transactions contemplated thereby, the Authorized Officers and counsel for the Corporation be, and each of them hereby is, authorized and directed, in the name and on behalf of the Corporation, to prepare and file with the Secretary of State of the State of Washington Articles of Amendment (the "Preferred Stock Articles of

to the Articles of Incorporation designating the preferences, limitations, voting powers and relative rights of each series of the Convertible Preferred Stock, substantially in the form attached hereto as Exhibit A, with such

Doc #178377 A-a


HIGHLY CONFIDENTIAL

completions, determinations, changes, and modlfications as may be approved by any Authorized Officer; and further

ISSUANCE AND RESERVATION OF SHARES AND OTHER MATTERS

RESOLVED, that the issuance of Investor Shares and Investor Warrants in accordance with the terms of the Investment Agreement be, and it hereby is, authorized and, upon such issuance, such Investor Shares and such Investor Warrants shall be validly issued, fully paid and nonassessable and free of preemptive rights; and further

RESOLVED, that the issuance of shares of Purchaser Shares in accordance with the terms of the Purchase Agreements be, and it hereby is, authorized and, upon such issuance, such Purchaser Shares shall be validly issued, fully paid and nonassessable and free of preemptive rights; and further

RESOLVED, that the issuance of shares of Common Stock upon conversion of the Convertible Preferred Stock or exercise of the Warrants in accordance with the terms of the Agreements be, and it hereby is, upon required shareholder and regulatory approvals having been obtained, authorized and, upon such issuance, such shares of Common Stock shall be validly issued, fully paid and nonassessable and free of preemptive rights; and further

RESOLVED, that the Corporation shall reserve and keep available for issuance at all relevant times such number of shares of Common Stock and Convertible Preferred Stock as may be required to be issued in connection with the Transactions or upon conversion of the Convertible Preferred Stock or exercise of the Warrants, as the case may be; provided that in the case of Convertible Preferred Stock or Warrants, the Corporation shall reserve such sufficient number of Common Stock following approval of the shareholders as contemplated by Section 3.1 (b) of the Investment Agreement and Section 3.1 (b) of the Public Preferred Purchase Agreement and approval by the applicable regulatory authorities; and further

APPROVAL OF ARTICLES OF AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORA TlON OF THE CORPORA TION

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders to increase the number of authorized shares of Common Stock to 2,500,000,000 (the "Common Stock Share Increase") from the total number of shares that the Corporation currently has the authority to issue, as set forth in the Common Stock Articles of Amendment (defined below), and that the same be, and hereby is, approved; and further

Doc #178377 A-9


HIGHLY CONFIDENTIAL

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders that the Board of Directors have authority to fix and state the voting powers, designations, preferences and relative, participating, optional or other special rights of the shares of Common Stock to be sold from time to time (the "Blank Check Common Stock") and the qualifications, restrictions and limitations thereon, as set forth in the Common Stock Articles of Amendment (defined below); and further

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders for the Corporation to amend the Amended and Restated Articles of Incorporation of the Corporation (the "Articles of Incorporation") to provide for the Common Stock Share Increase and the Blank Check Common Stock, substantially in the form attached hereto as Exhibit B (the "Common Stock Articles of Amendment"); and further

RESOLVED, that the Board hereby recommends that the shareholders of the Corporation at the special meeting of shareholders of the Corporation approve the Common Stock Articles of Amendment (the "Articles of Amendment Shareholder Approval"); and further

RESOLVED, that the Common Stock Articles of Amendment be, and hereby are, approved by the Board of Directors in all respects, with such Common Stock Articles of Amendment to become effective upon receipt of the Articles of Amendment Shareholder Approval and their filing with the Secretary of State of the State of Washington; and further

RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, in the name and on behalf of the Corporation, following approval thereof by the shareholders of the Corporation at the special meeting of shareholders of the Corporation, to execute the Common Stock Articles of Amendment and file such executed Common Stock Articles of Amendment with the Secretary of State of the State of Washington; and further

APPROVAL OF AMENDMENT TO THE RESTATED BYLAWS OF THE CORPORATION

RESOLVED, that it is advisable and in the best interests of the Corporation and its shareholders for the Corporation to amend the Restated Bylaws of the Corporation (the "Bylaws") to increase the number of Directors on the Board from fourteen to sixteen effective as of the closing of the Transactions; and further

RESOLVED, that the Bylaws Amendment be, and hereby is, approved by the Board of Directors in all respects, with such Bylaws Amendment to become effective upon the Closing of the Transactions; and further

Doc #178377 A-10


HIGHLY CONFIDENTIAL

GOVERNMENTAL AND REGULATORY APPROVALS AND FILINGS

RESOLVED, that the Authorized Officers and counsel for the Corporation be, and each of them hereby is, authorized and directed, in the name and on behalf of the Corporation, to prepare and file all such applications and any and all certificates, documents, letters and other instruments with the Office of Thrift Supervision, and any other appropriate Federal, state, foreign or other banking or other governmental authority necessary or desirable for approval of or to otherwise effect the transactions contemplated by the Agreements, with full power and authority by such officers and counsel to take any and all such action as may be necessary or advisable in their judgment to obtain such approvals, including, without limitation, appearing before the Office of Thrift Supervision and any such other governmental authority; and further

RESOLVED, that in connection with the Agreements and the transactions contemplated thereby and in order for the Corporation to comply with all applicable requirements of the Securities Act of 1933, as amended (the "Securities Act") and the Exchange Act, each Authorized Officer is authorized on behalf of and in the name of the Corporation to execute and file, or cause to be filed, with the SEC, in the name and on behalf of the Corporation, all reports, statements, documents and information required to be filed by the Corporation pursuant to the Securities Act and the Exchange Act and the rules and regulations of the SEC thereunder; and further

RESOLVED, that in connection with the Agreements and the transactions contemplated thereby and in order for the Corporation to comply with all applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Acf') and the rules and regulations thereunder, and any other antitrust, competition or similar laws, rules or regulations of any federal, state, local or other foreign jurisdiction or other governmental authority necessary or desirable for approval of the transactions contemplated by the Agreements, the Authorized Officers and counsel for the Corporation be, and each of them hereby is, authorized and empowered, on behalf of and in the name of the Corporation, to prepare and file all such applications and any and all certificates, documents, letters and other instruments in connection therewith, with full power and authority by such Authorized Officers and counsel to take any and all such action as may be necessary or advisable in their judgment to obtain such approvals, including, without limitation, appearing before any such governmental authority; and further

BLUE SKY REGISTRA nONS

RESOLVED, that it may be advisable and in the best interests of the Corporation that the Registered Securities be qualified or registered for sale in various states and foreign jurisdictions (or political subdivisions thereof); that the Authorized Officers of the Corporation be, and each of them hereby is, authorized to

Doc #178377 A-11


HIGHLY CONFIDENTIAL

determine the states or other jurisdictions in which appropriate action shall be taken to qualify or register for sale all or such part of each of the Registered Securities as such officers deem advisable; that such officers are hereby authorized to perform on behalf of the Corporation any and all acts that they may deem necessary or advisable in order to comply with the applicable laws of any such states or jurisdictions, and in connection therewith to execute and file all requisite papers and documents, including, without limitation, applications, reports, surety bonds, irrevocable consents and appointments of agents for service of process; that the execution by such officers of any such papers or documents or the doing by them of any act in connection with the foregoing matters shall conclUSively establish their authority therefor from the Corporation and the approval and ratification by the Corporation of the papers and documents so executed and the action so taken; and that the form of any and all resolutions required by any state authority or the competent authorities of other applicable jurisdictions to be filed in connection with any such application, consent to service or other document is hereby adopted if the Chief legal Officer (or the Interim Chief legal Officer) of the Corporation deems the adoption of such resolutions necessary or advisable and evidences such adoption of such resolutions by filing with the records of the Corporation copies of such resolutions (the filing thereof to be conclusive evidence of such adoption), which shall thereupon be deemed to be adopted by the Board of Directors and incorporated in and made a part of these resolutions with the same force and effect as if fully set forth herein; and further

NEW YORK STOCK EXCHANGE

RESOLVED, thatthe Authorized Officers be, and each of them hereby is, authorized to prepare or cause to be prepared one or more listing applications and to otherwise take such actions necessary or advisable in order for the Corporation to comply with all applicable requirements of the New York Stock Exchange, Inc. (the "NYSE"), for the listing on the NYSE of the additional shares of Common Stock (including shares issuable upon exercise of the Convertible Preferred Stock); and that the Authorized Officers be, and each of them hereby is, authorized, in the name and on behalf of the Corporation, to execute and file with the NYSE said listing applications; and further

RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, in the name and on behalf of the Corporation and, if required, under its corporate seal, to enter into, execute and file with the NYSE such other agreements and instruments as may be approved by the officer or officers executing the same, such approval to be conclusively evidenced by his, her or their execution and filing thereof; and further

Doc #178377 A-12


HIGHLY CONFIDENTIAL

RESOLVED, that the Authorized Officers and counsel for the Corporation be, and each of them hereby is, authorized to appear on behalf of the Corporation before the appropriate committee or body of the NYSE as such appearance may be required, with authority to make such changes in any such applications that shall be presented thereto, and in the agreements that may be made in connection therewith, as may be deemed necessary or desirable to conform to the requirements of the NYSE; and further

RESOLVED, that the Board of Directors hereby adopts the form of any and all resolutions required to be filed with the NYSE in connection with any of the aforementioned applications if the Chief Legal Officer (or the Interim Chief Legal Officer) of the Corporation deems such resolutions necessary or advisable and evidences such adoption by filing with the records of the Corporation copies of such resolutions (the filing thereof to be conclusive evidence of such adoption), which thereupon shall be deemed to be adopted by the Board of Directors and incorporated as part of these resolutions with the same force and effect as if fully set forth herein; and further

REGISTRATION STATEMENTS

RESOLVED, that, if required pursuant to the Agreements, the Authorized Officers be, and each of them hereby is, authorized, in the name and on behalf of the Corporation, to prepare, execute and file, or to cause to be prepared, executed and filed, with the SEC when required under the Agreements a registration statement (including a "shelf' registration statement) or any amendment to an existing "shelf' registration statement under the Securities Act pursuant to which holders of Registrable Securities (as defined in the Agreements) may resell such Registrable Securities and thereafter to prepare or cause the preparation of and, if deemed necessary or advisable by any of such Authorized Officers, to file or cause to be filed any amendments thereto, and to do all other things and to execute any and all other documents that any of them may deem necessary or advisable in connection therewith; and further

RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized to prepare, execute and file, or cause to be prepared, executed and filed, on behalf of the Corporation, such amendments and/or supplements, including post-effective amendments, to such registration statements, and to file or cause to be filed such other documents and instruments with, and furnish such other information to, the SEC and to take all such other actions as any of such Authorized Officers may deem necessary or advisable (i) to comply with the rules and regulations of the Securities Act and the Exchange Act, and (ii) to terminate, suspend or delay the effectiveness of" such registration statements; and further

Doc #178377 A-13


HIGHLY CONFIDENTIAL

RESOLVED, that the Chief Legal Officer (or the Interim Chief Legal Officer) of the Corporation be, and he hereby is, appointed as agent for service of process for the Corporation to receive notices and communications from the SEC in connection with such registration statements and from any state authority in any jurisdiction where the Registrable Securities are to be offered or sold; and to exercise the powers conferred upon him or her as such agent by the Securities Act and the rules and regulations of the SEC thereunder and any state authority in any jurisdiction where the Registrable Securities are to be offered or sold; and further

RESOLVED, that any Authorized Officer is hereby authorized to act as attorney-in-fact for the Corporation, with full power to act and with full power of substitution and re-substitution, to sign any and all amendments to and supplements to such registration statements, together with any exhibits or other documents relating thereto or required in connection therewith, in the name or on behalf of the Corporation and to file, or cause to be filed, the same with the SEC, with full power and authority to do and perform every act which such attorney-in-fact may deem necessary or advisable in connection therewith; and further

RESOLVED, that each officer and director who may be required to execute such registration statements or any amendment or supplement thereto is hereby authorized to execute a power of attorney to such person or persons as he may designate to sign such registration statements, any and all amendments or supplements thereto and documents related thereto, and to file the same or cause the same to be filed with the SEC, with full power and authority to do and perform every act which such attorney-in-fact may deem necessary or advisable in connection therewith; and further

AGREEMENTS WITH FINANCIAL ADVISORS

RESOLVED, that the form, terms and provisions of the engagement letters between the Corporation and each of Goldman, Sachs & Co. and Lehman Brothers Inc., as financial advisors, copies of which have been directed to be filed with the records of the Corporation, be, and they hereby are, in all respects approved and adopted; and that the actions of any officer of the Corporation in executing, in the name and on behalf of the Corporation, such agreements be, and they hereby are, ratified, confirmed and approved in all respects; and further

GENERAL ENABLING RESOLUTIONS

RESOLVED, that until further action of the Board of Directors, the Board of Directors hereby authorizes each of the Authorized Officers to approve the taking of any actions, the payment of any costs and expenses and the forms and terms of any instruments, documents or agreements, consistent with these resolutions, in connection with the Agreements, the transactions contemplated

Doc #178377 A-14


HIGHLY CONFIDENTIAL

thereby and the other transactions referred to in or contemplated by these resolutions, including, without limitation, approval of any amendment to, waiver of, or consent under, the Agreements or any other agreement or instrument authorized or contemplated by these resolutions as such officer shall deem necessary or desirable in connection with the Agreements and the transactions contemplated thereby; and further

RESOLVED, that each Authorized Officer is authorized and directed to take, or cause to be taken, all actions, and to execute and deliver, or cause to be executed and delivered, all agreements, undertakings, documents, instruments and certificates, and to pay all charges, fees, taxes and other expenses, from time to time, as such Authorized Officer deems necessary, desirable or appropriate to provide for the consummation of the transactions contemplated by the Agreements and to accomplish the purpose and intent of these resolutions, and the actions heretofore taken and to be taken by any Authorized Officer in that connection are hereby ratified, confirmed and approved in all respects; and further

RESOLVED, that, for purposes of carrying out the foregoing resolutions, any person authorized to execute any document or take or cause to be taken any action on behalf of the Corporation is authorized to grant, execute and deliver a power of attorney, individually or in the name and on behalf of the Corporation, to any other person, whether or not an employee of the Corporation, as the person executing the power of attorney may deem appropriate, and any action taken by any such duly authorized person pursuant to and within the scope of any such power of attorney is hereby ratified and confirmed as the act and deed of the Corporation.

Doc #178377


HIGHLY CONFIDENTIAL

Attorney-Client Privileged Work Product WM: Confidential Limited Access

WASHINGTON MUTUAL, INC. WASHINGTON MUTUAL BANK

Board of Directors Meeting Minutes

Sunday, April 6, 2008

The Board of Directors of Washington Mutual, Inc. (the "Holding Company") met concurrently with the Board of Directors of Washington Mutual Bank (the "Bank") on Sunday, April 6, 2008, for a special meeting.

Directors Present:

Stephen I. Chazen Anne V. Farrell Stephen E. Frank Kerry K. Killinger Thomas C. Leppert Charles M. Lillis Phillip D. Matthews

Directors Absent: None

Management Present:

Todd Baker Carey M. Brennan Thomas W. Casey Ronald J. Cathcart Daryl D. David Stewart M. Landefeld Stephen J. Rotella Charles Smith Craig E. Tall Susan R. Taylor Robert J. Williams

Regina T. Montoya Michael K. Murphy Margaret Osmer McQuade Mary Pugh Wm. G. Reed, Jr. Orin C. Smith James H. Stever

Advisors Present:

Huntley Garriott, of Goldman Sachs John Mahoney, of Goldman Sachs Todd Owens, of Goldman Sachs

Frank Cicero, of Lehman Brothers Phil Erlanger, of Lehman Brothers Steve Wolitzer, of Lehman Brothers Jason Trock, of Lehman Brothers

Lee Meyerson, of Simpson Thacher & Bartlett LLP

The materials for the meeting, including a PowerPoint presentation prepared by Goldman Sachs and Lehman Brothers, copies of the Investment Agreement and the Securities Purchase Agreement, a summary of the terms of both agreements prepared by Simpson Thacher and Bartlett, and correspondence with Flint were posted to BoardVantage prior to the meeting.

Doc #178377


HIGHLY CONFIDENTIAL


Mr. Killinger presided and called the meeting to order at 10:00 a.m. Pacific Daylight Time and the undersigned served as secretary to the meeting. Messrs. Chazen, Leppert, Matthews, Murphy, Smith, Stever and Tall attended the meeting by telephone. All others attended the meeting in person in the Boardroom at the WaMu Center in Seattle, Washington.

Mr. Killinger welcomed everyone to the meeting, thanking the Holding Company's Board members for their high level of engagement over the past several weeks. Ms. Taylor entered the room and distributed the material for the Holding Company's Board which had been posted electronically to BoardVantage earlier in the morning. Mr. Killinger asked the investment bankers/financial advisors to present.

Investment Bankers J Presentation Mr. Mahoney of Goldman Sachs, and Mr. Cicero of Lehman Brothers, jointly presented material previously provided to the Holding Company's Board, entitled "Confidential Presentation to Board of Directors, Discussion Materials - Project Olympic." Mr. Cicero began the presentation by briefly reporting that a preliminary agreement had been reached with Titanium to invest $2 billion in newly issued equity securities of the Holding Company, and that negotiations would continue with the "wall crossed" institutional investors through the following day, Monday. Pricing was anticipated to occur Monday evening with an announcement early Tuesday morning. The pricing of the transaction would be exposed to one day of market risk. He reported that conversations had also continued with Flint's advisors and that information had continued to be exchanged, but that there have been no improvements to the terms of Flint's offer.

Investment Structure and Process Mr. Mahoney then reviewed the terms of Titanium's proposed investment, talking the Holding Company's Board through each feature listed on the pages entitled, "TPG Capital Investment - Term Sheet" and "Contingent Convertible Non-Voting Preferred Stock - Term Sheet." He explained how the security had been deSigned to be outstanding only until conversion to common equity after receipt of shareholder approval. He responded to several questions from Directors, including questions about: the price reset feature, the NYSE rule concerning approval of certain common stock issuances and the current tangible book value of the Holding Company's common stock. He responded to a question from Mr. Frank by describing the intensity of the most recent negotiations and the impact of Friday's stock price decrease on pricing and other aspects of the negotiations. Mr. Mahoney then described the extent to which the terms of the investments from other investors, whether private equity firms or institutional investors, would be the same or different from the terms of Titanium's investment. Mr. Erlanger reviewed the list of other potential private equity investors, noting that Carbon was no longer among them due to its requirement that an auto flow purchase agreement be entered into simultaneously with the investment Mr. Erlanger reviewed the list of "Public 'WallCrossed' Potential Investors" and described the rocess for communicatin with

Doc #178377 2


HIGHLY CONFIDENTIAL


likelihood they would be able to participate due to time constraints. Mr. Erlanger emphasized the importance of marketing to all the identified investors over the next 24-to-36 hour period. Mr. Erlanger responded to a number of questions from the Directors concerning the various potential investors and the likely terms of their investments.

Analysis of Capital Raise Mr. Mahoney then presented a detailed analysis of the capital raise, which included analysis of the impact of the conversion of the preferred stock on the relevant capital ratios, the impact of the warrants and the conversion of the preferred stock on earnings per share, and the impact of the warrants on the investor price and an analysis of discounted cash flows. The discounted cash flow analysis included analysis at different warrant levels using different assumptions, and showed results over a five-year period. He also reviewed the features of the preferred stock that would incent shareholders to vote for the conversion and reported that it was highly likely that shareholders would approve the conversion. Mr. Mahoney responded to questions from the Directors.

Review and Analysis of Flint Proposal Mr. Cicero presented the terms of the proposal from Flint to acquire all of the shares of the Holding Company by reviewing each of the terms listed on the page entitled "Flint Proposal." He then reviewed the structure of Flint's payment offer and described the contingent payment portion of the offer in detail. Mr. Killinger briefed the Board on his correspondence with Flint. The Holding Company's Board then engaged in an active and lengthy discussion with management and its advisors concerning Flint, focusing on their offer, the extent to which the offer was based on contingent performance, the scope of Flint's due dlligence requests and the due diligence still to be completed, the SUbstance and tone of their negotiations, their communications with regulators, and their perceived level of interest in acquiring the Holding Company. In response to a question, Mr. Wolitzer discussed the possibility that Flint is interested in acquiring the Holding Company but is waiting to be opportunistic and could take actions that disrupt the capital raising process. In response to Directors' questions, the financial advisors and management then described the importance of getting through the next trading day without market disruption in order to announce a transaction at the current pricing. Mr. Cicero then presented the discounted cash flow analysis of Flint's offer. The offer represented a price per share of common stock that was significantly less than the proposals received from the private equity investors to purchase a minority interest in the Holding Company's stock. The Holding Company's Board then asked the investment bankers several more questions concerning negotiations with Flint. In response to one question, Messrs. Meyerson and Landefeld framed some of the issues that would be before the Holding Company's Board if Flint provided an updated offer the next day, and the need to consider both execution risk and value. Mr. Wolitzer also noted that an acquisition in the future was not precluded by the capital raise. In response to a Director's question about whether the amount of capital to be raised should be capped, Messrs. Killinger and Rotella reminded the Holding Company's Board that the OTS had said that $5 billion was a minimum and that it might be prudent to expand to $6 billion or more if sufficient interest exists.

Doc #178377 3


HIGHLY CONFIDENTIAL


Summary of Principal Terms of Investment

Redacted

Review of Press Release Mr. Casey then reviewed the contents of the preliminary press release that had been provided to the Holding Company's Board in advance of the meeting, and noted that the Holding Company's Board was reviewing it rather than the Audit Committee, in order to allow the Holding Company's Board to fully assess and analyze the financial information being presented, and the impact of the financing. He explained that the press release focused on the transaction and only a few key financial results and metrics. A second press release reporting all of the Holding Company's earnings results for the first quarter would be released on April 15. Mr. Casey answered questions about timing and about the extent to which the press release scheduled for release on April 15 would include the same information that the "wall crossed" institutional investors had received.

Discussion of Duties of Boards ofWMI and WMB

Redacted

its adoption of resolutions in March to resolve the issues raised in conjunction with the downgrade by the OTS of the composite rating.

Doc #178377 4


HIGHLY CONFIDENTIAL

REDACTED


Overall Transaction - Bankers' Analysis Mr. Landefeld reported that both Lehman Brothers and Goldman Sachs had agreed to deliver opinions to the Holding Company's Board assessing their review of the reasonableness of the terms of the equity transaction. He asked the investment bankers to describe the terms of the letters that they intended to present. Mr. Mahoney summarized the terms of the letter to be delivered by Goldman Sachs. He reviewed the scope of the opinion, the assumptions identified therein, and the general content of the letter. He indicated that the opinion would focus only on the equity investment and would not compare it to other strategies. The letter would indicate that the investment was a reasonable means of obtaining financing. Mr. Wolitzer described the letter to be delivered by Lehman Brothers, noting similarities and differences from the Goldman Sachs' letter.

In response to a question from Mr. Frank, Mr. Wolitzer noted that his firm was not viewing the transaction and the strategic sale as mutually exclusive alternatives and that it was not appropriate for them to advise the Holding Company's Board regarding which option was superior. He distinguished between the two alternatives, noting that one was strategic while the other was an ongoing operating alternative.

Redacted

The Holding Company's Board then engaged in an active and thorough discussion. Mr. Ullis noted that given the current two options, he would choose the recapitalization and therefore the bankers' views were needed on the recapitalization. Mr. Killinger indicated that the recapitalization transaction would not preclude selling the Holding Company in the future, and that the Holding Company's Board should consider whether shareholders would get a better value by accepting the capital now, getting through the current difficult period and possibly having more potential acquirers in the future. One Director emphasized that while the investment bankers approached many potential acauirers. onlv one had submitted an offer.

Doc #178377 5