14
Rule 424(b)(3)
Registration No. 33-
53048
PROSPECTUS
COUNTRYWIDE CREDIT INDUSTRIES, INC.
DIVIDEND REINVESTMENT PLAN
The Dividend Reinvestment Plan (the "Plan") of Countrywide Credit Industries,
Inc. (the "Company") provides holders of record and beneficial owners of shares
of Common Stock, $.05 par value, of the Company (the "Common Stock") with a
simple and convenient method of investing cash dividends in additional shares of
stock at a 4% discount (subject to change) from the market price (as determined
in accordance with the Plan). In addition, brokers and nominees may reinvest
dividends on behalf of beneficial owners. Those holders of Common Stock who do
not participate in the Plan will receive cash dividends, as declared, in the
usual manner.
A participant in the Plan may obtain additional shares of Common Stock by:
reinvesting dividends on all shares held by the participant; or
reinvesting dividends on part of the shares held by the participant (while
continuing to receive cash dividends on his or her remaining shares).
This Prospectus relates to 787,500 shares of Common Stock offered hereby and
registered for sale under the Plan. Participants should retain this Prospectus
for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is October 6, 1995
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such an offer or solicitation in such
jurisdiction. No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus in connection
with the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that information herein
is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
Available Information 3
Incorporation of Certain Documents by Reference 3
Countrywide Credit Industries, Inc. 3
The Plan 4
Purpose 4
Advantages 5
Administration 5
Participation 6
Purchases and Prices of Shares 8
Reports to Participants 9
Dividends on Fractions 9
Certificates for Common Shares 9
Withdrawals 10
Other Information 10
Dividends 13
Use of Proceeds 14
Legal Opinion 14
Experts 14
Indemnification 14
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission. Reports, proxy statements and other information concerning the
Company can be inspected at Room 1024 of the Commission's office at 450 Fifth
Street, N.W., Washington, D.C. 20549 and the Commission's Regional Offices in
New York (Suite 1300, 7 World Trade Center, New York, New York 10048) and
Chicago (Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661), and copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Reports, proxy statements and other information concerning
the Company also may be inspected at the offices of the New York Stock Exchange
and the Pacific Stock Exchange where the Company's Common Stock is listed. This
Prospectus does not contain all information set forth in the Registration
Statement and Exhibits thereto which the Company has filed with the Commission
under the Securities Act of 1933, as amended and to which reference is hereby
made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission by the
Company are incorporated by reference in this Prospectus: (1) the Company's
Annual Report on Form 10-K for the year ended February 28, 1995; and (2) the
Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995; and
(3) the description of the Common Stock contained in the Company's registration
statement under Section 12 of the Exchange Act and all amendments and reports
filed for the purpose of updating that description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing such documents.
Any person receiving a copy of this Prospectus may obtain without charge, upon
request, a copy of any of the documents incorporated by reference herein, except
for the exhibits to such documents. Written requests should be addressed to
Investor Relations, Countrywide Credit Industries, Inc., 155 North Lake Avenue,
P.O. Box 7137, Pasadena, California 91109-7137. Telephone requests may be
directed to Investor Relations at (818) 304-7523.
COUNTRYWIDE CREDIT INDUSTRIES, INC.
The Company is a holding company which, through its principal subsidiary
Countrywide Funding Corporation, is engaged primarily in the mortgage banking
business, and as such originates, purchases, sells and services mortgage loans.
The Company's mortgage loans are principally first-lien mortgage loans secured
by single (one to four) family residences. The Company also offers home equity
loans both in conjunction with newly produced first-lien mortgages and as a
separate product. The Company, through its other wholly-owned subsidiaries,
offers products and services complementary to its mortgage banking business. A
subsidiary of the Company sells to other broker-dealers mortgage-backed
securities, including agency mortgage-backed securities and agency-issued
collateralized mortgage obligation ("CMO") classes primarily on an odd-lot basis
(i.e., in denominations between $25,000 and $1,000,000) and to institutional
investors, subordinate structures of whole loan CMOs. In addition, a subsidiary
of the Company receives fee income for managing the operations of CWM Mortgage
Holdings, Inc. (formerly Countrywide Mortgage Investments, Inc.) ("CWM"), a
real estate investment trust whose shares are traded on the New York Stock
Exchange. In 1993, CWM adopted a new operating plan and established a taxable
subsidiary that principally operates as a jumbo and otherwise non-conforming
mortgage loan conduit. CWM has also commenced warehouse lending operations
which provide short-term revolving financing to certain mortgage bankers, and
construction lending operations which provide financing to developers and
individuals. The Company also has a subsidiary which acts as an agent in the
sale of homeowners, fire, flood, earthquake, mortgage life and disability
insurance to CFC's mortgagors in connection with CFC's mortgage banking
operations. Another subsidiary of the Company earns fee income by brokering
servicing contracts owned by other mortgage lenders and loan servicers. The
Company also has a subsidiary that provides title insurance services to
realtors, builders, consumers, mortgage brokers and other financial
institutions. The Company's principal executive office is located at 155 North
Lake Avenue, Pasadena, California 91101.
THE PLAN
The Plan was authorized by the Company's Board of Directors on March 24, 1992.
The following questions and answers explain and constitute the Plan which became
effective October 30, 1992. Shareholders who do not participate in the Plan
will receive cash dividends, as declared, by check in the usual manner.
PURPOSE
1. What is the purpose of the Plan?
The primary purpose of the Plan is to provide eligible holders of shares of
common stock (the "Common Stock") of Countrywide Credit Industries, Inc.
(the "Company") with a convenient and simple method of increasing their
investment in the Company by investing cash dividends in newly issued
shares of Common Stock, if available, or, if not available, in shares of
Common Stock purchased in the open market. When newly issued shares of
Common Stock are purchased from the Company, the Company will receive new
equity capital funds available for general corporate purposes.
The Plan is intended for the benefit of long-term investors, and not for
the benefit of individuals or institutions who engage in short-term trading
activities which cause aberrations in the composite trading volume of the
Common Stock. The Company accordingly reserves the right to terminate
participation at any time by a shareholder who is using the Plan for
purposes inconsistent with the intended purpose of the Plan.
ADVANTAGES
2. What are the advantages of the Plan?
Participants in the Plan may:
Automatically reinvest cash dividends on all of their Common Stock.
Automatically reinvest cash dividends on less than all of their
Common Stock and continue to receive cash dividends on their remaining
shares.
Avoid brokerage commissions, service charges or other fees in
connection with purchases under the Plan.
As of the date of this Prospectus, purchases of Common Stock with
reinvested dividends are made at a 4% discount (the "Dividend Reinvestment
Discount") from the "Current Market Price" as defined in the answer to
Question 10. However, the Dividend Reinvestment Discount may be changed or
eliminated at the Company's discretion.
Full investment of funds is possible under the Plan because it permits
participants' accounts to be credited not only with full shares but also
with fractional shares which participate in subsequent dividends.
Statements reflecting each purchase will be sent as soon as practicable
after each purchase.
ADMINISTRATION
3. Who administers the Plan?
The Bank of New York (the "Agent"), as designated agent for each
participating shareholder, administers the Plan, keeps records, sends
statements of account activity to each participant and performs other
duties relating to the Plan. Shares purchased under the Plan and held by
the Agent will be registered in the Agent's name or the name of its nominee
for the benefit of the participants. In the event that the Agent resigns
or otherwise ceases to act as agent, the Company will appoint a new agent
to administer the Plan.
The Agent also acts as dividend disbursing agent, transfer agent and
registrar for the Company's Common Stock.
PARTICIPATION
4. Who is eligible to participate?
All holders of record of at least one share of Common Stock are eligible to
participate in the Plan. If his or her shares are held in the
shareholder's own name, he or she may participate directly in the Plan. A
beneficial owner whose shares are registered in any name other than his or
her own (for example, in the name of a broker, bank or other nominee) must
either become a shareholder of record by having shares transferred into his
or her own name or arrange with the record holder to participate on his or
her behalf.
5. Is partial participation possible under the Plan?
Yes. Shareholders may designate on the Authorization Card a number of
shares for which dividends are to be reinvested. Dividends will thereafter
be reinvested on the number of shares specified, and the shareholder will
continue to receive cash dividends on the remainder of the shares.
6. How does an eligible shareholder participate?
Shareholders may join the Plan by completing and signing an Authorization
Card and returning it to the Agent. Authorization Cards may be obtained at
any time from the Agent: The Bank of New York, Dividend Reinvestment, P.O.
Box 1958, Newark, New Jersey 07101-9774, telephone (800) 524-4458; or the
Company: Countrywide Credit Industries, Inc., Investor Relations MS 9-19,
155 North Lake Avenue, Pasadena, California 91101, telephone (818) 304-
7523.
Beneficial owners whose shares are held at a securities depository and who
wish to participate in the Plan must instruct their broker, bank or other
nominee to make arrangements with the depository to permit such beneficial
owners to participate in the Plan. All other beneficial owners must
instruct their nominees to complete a Broker and Nominee Authorization Form
(a "B & N Form") and return it to the Agent. In either case, the Agent
must receive a B & N Form or instructions from a securities depository on
behalf of a beneficial owner each time such beneficial owner wishes to
reinvest a quarterly dividend.
7. When may an eligible shareholder join the Plan?
A shareholder of record may join the Plan at any time. Once in the Plan, a
participant remains in the Plan until he or she terminates participation,
the Company terminates his or her participation or the Plan terminates.
8. When will dividends be reinvested?
When shares are purchased from the Company, such purchases will be made on
the "Investment Date" in each month. The Investment Date will be the
expected dividend payment date in those months in which a dividend is
payable (currently January, April, July and October).
Where market transactions are made, the Agent will make every effort to
make the purchases promptly, beginning on the Investment Date and
completing such purchases no later than 30 days from such date or as soon
thereafter as practicable. Such purchases may be made on any securities
exchange where the shares are traded, in the over-the-counter market or by
negotiated transactions, and may be subject to such terms with respect to
price, delivery and other matters as agreed to by the Agent. Neither the
Company nor any participant shall have any authorization or power to
direct the time or price at which shares will be purchased or the selection
of the broker or dealer through or from whom purchases are to be made by
the Agent.
If the Authorization Card is received prior to the record date for a
dividend payment, the election to reinvest dividends will begin with that
dividend payment. If the Authorization Card is received on or after any
such record date, reinvestment of dividends will begin on the dividend
payment date following the next record date if the participant is still a
shareholder of record. Record dates for payment of dividends normally
precede payment dates by three weeks.
Shares will be allocated and credited to participants' accounts as follows:
(1) shares purchased from the Company will be allocated and credited on the
appropriate Investment Date; and (2) shares purchased in market
transactions will be allocated and credited as of the date on which the
Agent completes the purchases of the aggregate number of shares to be
purchased.
9. What does the Authorization Card provide?
If the shareholder elects "Full Dividend Reinvestment," the Authorization
Card directs the Agent to apply toward the purchase of additional shares
all cash dividends on all the shares then or subsequently registered in the
shareholder's name. If the shareholder elects to reinvest dividends on
only a portion of the shares held of record, the Authorization Card directs
the Agent to apply all cash dividends on the number of shares specified on
the Authorization Card toward the purchase of additional shares. The
Authorization Card further directs the Agent to reinvest automatically any
subsequent dividends on shares accumulated and held in a participant's Plan
account.
PURCHASES AND PRICES OF SHARES
10. How will the price of Common Stock purchased under the Plan be determined?
If the Agent purchases treasury or newly-issued common shares under the
Plan from the Company, the "Current Market Price" will be the average of
the daily high and low sales prices of the Common Stock on the New York
Stock Exchange for the ten trading days (each a "Trading Day") ending on
the Investment Date (as defined in the answer to Question 8 above) or, if
no trading occurs in the Common Stock on one or more of such trading days,
for the ten trading days immediately preceding the Investment Date for
which trades are reported (the "Pricing Period"). If the Agent purchases
Common Stock under the Plan in market transactions, the "Current Market
Price" will be the weighted average of the actual prices paid for the
Common Stock purchased by the Agent.
The Company will advise the Agent at least five business days in advance of
any record date if it will not make shares available on the next dividend
payment date. To the extent the Company makes shares available to the
Agent under the Plan, the Agent will acquire the shares directly from the
Company.
The purchase price of Common Stock purchased with reinvested dividends will
be the applicable Current Market Price less the Dividend Reinvestment
Discount, if any, then in effect for such purchases. The Company, in its
sole discretion, may change or eliminate the Dividend Reinvestment Discount
upon sending Plan participants written notice.
11. How many shares of Common Stock will be purchased for participants?
The number of shares to be purchased depends on the amount of dividends
being reinvested and the purchase price of the shares. Each participant's
account will be credited with the number of shares, including fractions
computed to four decimal places, equal to the amount invested divided by
the purchase price per share.
12. Are there any out-of-pocket costs to participants in connection with
purchases under the Plan?
No. All costs of administration of the Plan and all brokerage fees or
commissions on shares purchased for the Plan are paid by the Company.
There are no expenses in connection with withdrawal from the Plan unless a
shareholder requests that shares be sold upon withdrawal from the Plan, in
which case fees will be charged. (See answer to Question 18.)
REPORTS TO PARTICIPANTS
13. What kind of reports will be sent to participants in the Plan?
Each participant in the Plan will receive a statement of his or her account
following each purchase of additional shares. These statements are
participants' continuing record of the cost of their purchases and should
be retained for income tax purposes. In addition, participants will
receive copies of other communications sent to holders of the Common Stock,
including the Company's annual report to its shareholders, the notice of
annual meeting and proxy statement in connection with its annual meeting of
shareholders and Internal Revenue Service information for reporting
dividends paid.
DIVIDENDS ON FRACTIONS
14. Will participants be credited with dividends on fractions of shares?
Yes.
CERTIFICATES FOR COMMON SHARES
15. Will certificates be issued for shares purchased?
Common Stock purchased for participants will be held in the name of the
Agent or its nominee. No certificates will be issued to participants for
shares in the Plan unless a participant submits a written request to the
Agent or until participation in the Plan is terminated. At any time, a
participant may request the Agent to send a certificate for some or all of
the whole shares credited to a participant's account. This request should
be mailed to the Agent at the address set forth in the answer to Question
6. Any remaining whole shares and any fractions of shares will remain
credited to the Plan account.
Certificates for fractional shares will not be issued under any
circumstances.
16. In whose name will certificates be registered when issued?
Each Plan account will be maintained in the name or names in which the
certificates were registered at the time the participant entered the Plan.
Consequently, certificates for whole shares will be similarly registered
when issued.
WITHDRAWALS
17. When may participants withdraw from the Plan?
Participants may withdraw from the Plan at any time. If the request to
withdraw is received prior to a dividend record date set by the Board of
Directors for determining shareholders of record entitled to receive a
dividend, the request will be processed on the day following receipt of the
request by the Agent.
If the request to withdraw is received by the Agent on or after a dividend
record date, but before the payment date, the Agent, in its sole
discretion, may either pay such dividend in cash or reinvest it in shares
for the participant's account. The request for withdrawal will then be
processed as promptly as possible following such dividend payment date.
All dividends subsequent to such dividend payment date will be paid in cash
unless a shareholder re-enrolls in the Plan, which may be done at any time.
18. How does a participant withdraw from the Plan?
A participant who wishes to withdraw from the Plan must notify the Agent in
writing at its address set forth in the answer to Question 6. If a
participant terminates his or her entire participation in the Plan or if
the Company terminates the Plan, certificates for the whole shares credited
to his or her account under the Plan will be issued unless a participant
requests otherwise as provided below. A cash payment will be made for any
fraction of a share.
Upon withdrawal from the Plan, a participant may also request in writing
that the Agent sell all or part of the shares credited to his or her
account in the Plan. The Agent will sell the shares as requested as soon
as practicable after processing the request for withdrawal. The
participant will receive the proceeds of the sale, less a sale fee of
$15.00 per transaction paid to the Agent, any brokerage fees or commissions
and any applicable stock transfer tax.
OTHER INFORMATION
19. What happens if a participant sells or transfers all of the shares
registered in the participant's name?
If a participant disposes of all shares registered in his or her name, and
is not shown as a record owner on a dividend record date, the participant
may be terminated from the Plan and such termination treated as though a
withdrawal notice had been received prior to the record date.
20. What happens if the Company declares a dividend payable in shares or
declares a stock split?
Any dividend payable in shares and any additional shares distributed by the
Company in connection with a stock split in respect of shares credited to a
participant's Plan account will be added to that account. Stock dividends
or split shares which are attributable to shares registered in a
participant's own name and not in his or her Plan account will be mailed
directly to the participant as in the case of shareholders not
participating in the Plan.
21. How will shares held by the Agent be voted at meetings of shareholders?
If the participant has directly owned shares registered in his or her name,
the participant will receive a proxy card covering both directly held
shares and shares held in the Plan. If the participant does not have
directly owned shares registered in his or her name, the participant will
receive a proxy covering shares held in the Plan through his or her broker,
bank or other nominee.
If a proxy is returned properly signed and marked for voting, all the
shares covered by the proxy will be voted as marked. If a proxy is
returned properly signed but no voting instructions are given, all of the
participant's shares will be voted in accordance with recommendations of
the Board of Directors of the Company, unless applicable laws require
otherwise. If the proxy is not returned, or if it is returned unexecuted
or improperly executed, shares registered in a participant's name may be
voted only by the participant in person.
22. What are the responsibilities of the Company and the Agent under the Plan?
The Company and the Agent will not be liable in administering the Plan for
any act done in good faith or required by applicable law or for any good
faith omission to act including, without limitation, any claim of liability
arising out of or with respect to failure to terminate a participant's
account upon his or her death, the prices at which shares are purchased
and/or the times when such purchases are made or any fluctuation in the
market value before or after purchase or sale of shares.
The Company and the Agent shall be entitled to rely on completed forms and
the proof of due authority to participate in the Plan, without further
responsibility of investigation or inquiry.
23. May the Plan be changed or discontinued?
Yes. The Company may suspend, terminate, or amend the Plan at any time.
Notice will be sent to participants of any suspension or termination, or of
any amendment that alters the Plan terms and conditions, as soon as
practicable after such action by the Company.
The Company may substitute another administrator or agent in place of the
Agent at any time; participants will be promptly informed of any such
substitution.
Any questions of interpretation arising under the Plan will be determined
by the Company and any such determination will be final.
24. What are the federal income tax consequences of participation in the Plan?
Under an Internal Revenue Service ruling applicable to such plans,
participants in the Plan are considered to have received a dividend for
federal income tax purposes equal to the amount of the cash dividends under
the Plan plus the amount of the discount on the market price of the shares
purchased with reinvested dividends. Such market price becomes the
participant's basis in the shares purchased under the Plan.
In addition, the Internal Revenue Service has ruled that brokerage
commissions paid by the Company in connection with open market purchases on
behalf of participants constitute dividend income to such participants. A
participant's basis in the shares so purchased would be increased by the
amount of the brokerage commissions included in dividend income.
A participant does not realize any taxable income upon the receipt of
certificates for the whole shares credited to the participant's account
under the Plan, either upon the participant's request for certificates for
certain of those shares or upon withdrawal from or termination of the Plan.
However, a participant's receipt upon withdrawal from or termination of the
Plan, of a cash payment in lieu of a fractional share credited to the
participant's account is treated as a redemption of that fractional share,
and the participant realizes a gain or loss. Gain or loss is also realized
by the shareholder upon the sale or exchange of shares after withdrawal
from the Plan. The amount of such gain or loss is the difference between
the amount which the shareholder receives for each whole or fractional
share and the shareholder's tax basis.
Shareholders may defer the tax consequences described above by
participating in the Plan through an IRA.
A foreign shareholder, who is a participant and whose dividends are subject
to United States income tax withholding, has the amount of the tax withheld
deducted from such dividends before reinvestment in additional shares for
such participant's Plan account. The statements confirming purchases made
for a foreign participant will indicate that tax has been withheld.
The final statement received from the Agent for any calendar year includes
information for that year regarding total dividends paid on shares held in
the Plan, the total discount received and the market price per share
purchased. In addition, the Agent sends each participant a statement at
year end showing total dividends paid on shares held of record. These
statements should be retained for tax reporting purposes.
Statements will not be sent directly to stockholders participating through
a broker or nominee. Thus, beneficial owners of shares so held must make
arrangements with their brokers or nominees to receive the appropriate tax
statements.
The foregoing discussion is only a brief summary of certain federal income
tax provisions applicable to participation in the Plan based on current law
and is for general information only. It is not a complete enumeration or
analysis of all the tax consequences of participating in the Plan and may
not describe the tax consequences to a particular participant in light of
individual circumstances. The law and interpretational authorities on
which such summary is based are subject to change at any time, which could
change the tax consequences described above. Accordingly, participants are
urged to consult their own tax advisors for advice relating to the federal,
state, local, and foreign tax consequences of participation in the Plan.
25. Who bears the risk of market fluctuations in the Company's Common Stock?
A participant's investment in shares held in the Plan account is no
different from his or her investment in directly held shares. The
participant bears the risk of any loss and enjoys the benefits of any gain
from market price changes with respect to such shares.
26. Who should be contacted with questions about the Plan?
All correspondence regarding the Plan should be directed to:
The Bank of New York
Dividend Reinvestment
P.O. Box 1958
Newark, New Jersey 07101-9774
Telephone: (800) 524-4458
Please mention Countrywide Credit Industries, Inc. and this Plan in all
correspondence.
DIVIDENDS
The Company has paid cash dividends on its Common Stock quarterly since 1979,
except that no cash dividend was paid in the fiscal quarter ended February 28,
1982. In part to accommodate the provisions of this Plan, the Company
anticipates that dividends, to the extent declared in the future, will be
payable on or about the 15th day of January, April, July and October.
USE OF PROCEEDS
The Company does not know either the number of shares of Common Stock that will
be ultimately sold pursuant to the Plan or the prices at which such shares will
be sold. However, the Company proposes to use the net proceeds from the sale of
newly issued or treasury shares of Common Stock for general corporate purposes.
LEGAL OPINION
The validity of the securities offered hereby has been passed upon by Sandor E.
Samuels, General Counsel of the Company.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended February 28, 1995, have been so incorporated in reliance on
the report of Grant Thornton, independent certified public accountants, given on
the authority of said firm as experts in auditing and accounting.
INDEMNIFICATION
The Company's Certificate of Incorporation eliminates, to the fullest extent
permitted by Delaware law, director liability for monetary damage for breaches
of the directors' fiduciary duty of care. Delaware law and the Company's
Certificate of Incorporation and Bylaws also provide that the Company shall
indemnify directors and officers under certain circumstances for liabilities and
expenses incurred by reason of their actions as agents of the Company. The
Company has entered into indemnity agreements with each of its directors and
executive officers providing that these individuals will be indemnified up to an
aggregate limit of $5,000,000 for any claims made against the individual based
on any act, omission or breach of duty committed while acting as a director or
officer, except among other things, those involving dishonesty or improper
personal benefit. In addition, the Company maintains an insurance policy that
indemnifies directors and officers against certain liabilities.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in said Act and is therefore unenforceable.
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