<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COUNTRYWIDE CREDIT INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
COUNTRYWIDE CREDIT INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF COUNTRYWIDE(R)]
------------------------
CREDIT INDUSTRIES, INC.
155 NORTH LAKE AVENUE
PASADENA, CALIFORNIA 91101
May 31, 1996
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders of Countrywide Credit Industries, Inc. The
meeting will be held on July 10, 1996 at 10:00 a.m. at the Pasadena Hilton,
150 South Los Robles Avenue, Pasadena, California. The formal notice and proxy
statement for this meeting are attached to this letter.
It is important that you sign, date and return your proxy as soon as
possible, even if you currently plan to attend the Annual Meeting. You may
still attend the Annual Meeting and vote in person if you desire, but
returning your proxy card now will assure that your vote is counted if you are
unable to attend. Your vote, regardless of the number of shares you own, is
important.
On behalf of the Board of Directors, I thank you for your cooperation.
Sincerely,
/s/ DAVID S. LOEB
David S. Loeb
Chairman of the Board
<PAGE>
[LOGO OF COUNTRYWIDE(R)]
------------------------
CREDIT INDUSTRIES, INC.
155 NORTH LAKE AVENUE
PASADENA, CALIFORNIA 91101
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 10, 1996
----------------
To the Stockholders:
The Annual Meeting of Stockholders of Countrywide Credit Industries, Inc.
(the "Company") will be held at the Pasadena Hilton, 150 South Los Robles
Avenue, Pasadena, California on July 10, 1996 at 10:00 a.m., Los Angeles time,
and at any adjournment thereof, for the following purposes:
1. To elect two directors to serve on the Board of Directors for a term
expiring at the 1999 Annual Meeting.
2. To approve the annual cash bonus provisions of the employment
agreements of David S. Loeb and Angelo R. Mozilo.
3. To approve the Company's Annual Incentive Plan.
4. To approve the Company's Amended and Restated 1993 Stock Option Plan.
5. To ratify the selection by the Board of Directors of Grant Thornton
LLP as independent certified public accountants of the Company for the
fiscal year ending February 28, 1997.
6. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Only stockholders of record at the close of business on May 17, 1996 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
or adjournments thereof.
By Order of the Board of Directors
/s/ SANDOR E. SAMUELS
Sandor E. Samuels
Secretary
Dated: May 31, 1996
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER
PROXY SOLICITATION. PLEASE MAIL YOUR PROXY TODAY.
<PAGE>
[LOGO OF COUNTRYWIDE(R)]
------------------------
CREDIT INDUSTRIES, INC.
155 NORTH LAKE AVENUE
PASADENA, CALIFORNIA 91101
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
July 10, 1996
GENERAL
This Proxy Statement is furnished to stockholders of Countrywide Credit
Industries, Inc. (the "Company") in connection with the solicitation by its
Board of Directors (the "Board") of proxies to be voted at the 1996 Annual
Meeting of Stockholders to be held at the Pasadena Hilton, 150 South Los
Robles Avenue, Pasadena, California on July 10, 1996 at 10:00 a.m. and at any
adjournment thereof (the "Meeting"). The Company expects to mail its proxy
soliciting materials for the Meeting on or about June 9, 1996.
The accompanying proxy may be revoked by a stockholder at any time before it
is voted, either by delivering a subsequent proxy or other written notice of
revocation to the Company at its above address or by attending the Meeting and
voting in person. All shares represented by each properly signed and returned
proxy card in the accompanying form, unless revoked, will be voted at the
Meeting in accordance with the stockholder's instructions indicated on the
proxy card. If no instructions are marked on the proxy card, the shares will
be voted in favor of the proposals described in this Proxy Statement.
The only outstanding voting securities of the Company are shares of its
Common Stock, par value $.05 per share ("Common Stock"). Each stockholder of
record at the close of business on May 17, 1996 is entitled to notice of and
to vote at the Meeting and at any adjournment or adjournments thereof. On that
date, there were 102,376,119 shares of Common Stock outstanding, with each
share entitled to one vote. The presence, in person or by proxy, of a majority
of the shares entitled to vote will constitute a quorum for the Meeting.
Abstentions from voting, which may be specified on all matters except the
election of directors, will be considered shares present and entitled to vote
on a matter and, accordingly, will have the same effect as a vote against a
matter. If a broker indicates on a proxy that the broker does not have
discretionary authority as to certain shares to vote on a particular matter,
such shares will not be considered as present and entitled to vote with
respect to that matter and, accordingly, will have no effect on the vote with
respect to that matter.
The Company will pay the cost of the solicitation of proxies, including
preparing and mailing the Notice of Annual Meeting, this Proxy Statement and
the proxy card. Following the mailing of this Proxy Statement, directors,
officers and regular employees of the Company may solicit proxies by
telephone, facsimile transmission or other personal contact, for which
services such persons will receive no additional compensation. Brokerage
houses and other nominees, fiduciaries and custodians who are holders of
record of shares of Common Stock will be requested to forward proxy soliciting
material to the beneficial owners of such shares and will be reimbursed by the
Company for their charges and expenses in connection therewith at customary
and reasonable rates. In addition, the Company has retained Morrow & Co., Inc.
to assist in the solicitation of proxies for an estimated fee of $8,500, plus
reimbursement of expenses.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company's Bylaws give the Board the power to set the number of directors
at no less than three nor more than fifteen. The Company currently has six
directors. Directors serve three-year terms which are staggered to provide for
the election of approximately one-third of the Board each year. The terms of
David S. Loeb and Angelo R. Mozilo expire at the Meeting, and each of them has
been nominated for election as a director for a new term which will expire at
the 1999 annual meeting.
Directors will be elected by a plurality of the votes cast at the Meeting.
In the absence of contrary instructions, it is the intention of the persons
named in the accompanying proxy card to vote for the nominees listed below. In
the event that any nominee becomes unavailable for any reason, which the Board
does not anticipate, the proxies will be voted for the election of the person,
if any, who is designated by the Board to replace the nominee.
The following table contains information regarding the nominees and the
other incumbent directors.
<TABLE>
<CAPTION>
DIRECTOR
NAME OCCUPATION AGE SINCE
---- ---------- --- --------
<S> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS--TERM EXPIRING 1999 (CLASS III)
David S. Loeb Chairman of the Board and 72 1969
President of the Company
Angelo R. Mozilo Vice Chairman of the Board 57 1969
and Executive Vice
President of the Company
INCUMBENT DIRECTORS--TERM EXPIRING 1997 (CLASS I)
Ben M. Enis Professor of Marketing, 54 1984
University of Southern
California; Los Angeles, CA
Edwin Heller Attorney, Partner, Fried, 66 1993
Frank, Harris, Shriver & Jacobson;
New York, NY
INCUMBENT DIRECTORS--TERM EXPIRING 1998 (CLASS II)
Robert J. Donato Executive Vice President, 56 1993
PaineWebber Incorporated;
New York, NY
Harley W. Snyder Chief Executive Officer, 63 1991
Harley Snyder Companies;
Valparaiso, IN
</TABLE>
David S. Loeb is co-founder of the Company and has been Chairman of the
Board and President of the Company since its formation in March 1969. Mr. Loeb
has been Chairman of the Board of Directors and Chief Executive Officer of CWM
Mortgage Holdings, Inc. ("CWM"), formerly known as Countrywide Mortgage
Investments, Inc., a publicly-held real estate investment trust managed by the
Company, since its inception in September 1985.
Angelo R. Mozilo is co-founder of the Company and has been Vice Chairman of
the Board and Executive Vice President of the Company since its formation in
March 1969. Mr. Mozilo has been President of CWM since its inception in
September 1985 and a director since October 31, 1985.
2
<PAGE>
Robert J. Donato is the Executive Vice President, Director of Regional
Institutional Sales for PaineWebber Incorporated. Mr. Donato has been employed
by PaineWebber Incorporated for more than five years.
Ben M. Enis has been a Professor of Marketing, University of Southern
California, Los Angeles, California since 1982. He is also a director of
Protection One, Inc.
Edwin Heller is an attorney and has been a partner in the law firm of Fried,
Frank, Harris, Shriver & Jacobson for more than five years.
Harley W. Snyder is, and for more than five years has been, President of the
following companies: HSC, Inc., a real estate and development company; Harley
Snyder Co., Inc.--Construction and S-W Corporation. He is a director of Bank
One, Merrillville, NA and serves on the Board of Trustees of both Porter
Memorial Hospital and Valparaiso University. Mr. Snyder was President of the
National Association of Realtors in 1983 and has served as a director of that
group since 1972.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THE NOMINEES.
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended February 29, 1996 ("fiscal 1996"), the Board
held 11 meetings. The Board maintains Audit, Nominating, Compensation and
Strategic Planning Committees. The committees' specific responsibilities are
summarized below. Each Board member attended 75% or more of the meetings of
the Board and the committees on which he served that were held during the
fiscal year ended February 29, 1996.
1. The Audit Committee consults with and reviews the reports and
recommendations of the Company's independent certified public accountants
and reports thereon to the Board, meets with the Company's internal
auditors to review policy and procedural matters and meets with management
on financial matters. Messrs. Donato (chairman), Enis and Snyder are
members of this committee which met four times during the fiscal year ended
February 29, 1996.
2. The Nominating Committee considers nominees for directors suggested by
stockholders. Stockholders wishing to nominate directors must comply with
Section 12 of the Company's Bylaws, which requires certain information to
be provided in connection with the submission of stockholder nominations
and sets forth certain timing requirements with respect thereto. Messrs.
Enis (chairman) and Heller are members of this committee which did not meet
during the fiscal year ended February 29, 1996.
3. The Compensation Committee determines matters relating to compensation
of the Chairman of the Board and President and the Vice Chairman of the
Board and Executive Vice President of the Company (Messrs. Loeb and Mozilo)
as well as the five highest compensated executive officers and administers
each of the Company's stock option plans. Messrs. Snyder (chairman), Donato
and Enis are members of this committee. The Compensation Committee met six
times during the fiscal year ended February 29, 1996.
4. The Strategic Planning Committee examines the Company's role in both
the industries in which it operates and the general marketplace as well as
other issues relating to the Company's operations and governance. Messrs.
Heller (chairman), Donato and Enis are members of this committee which held
three meetings during the fiscal year ended February 29, 1996.
3
<PAGE>
COMPENSATION OF DIRECTORS
Each director of the Company who is not an employee of the Company receives
an annual fee for serving on the Board and any of its committees and is
entitled to reimbursement for his expenses incurred in attending meetings of
the Board and its committees. Directors who are Company employees are not paid
any fees as such for serving on the Board and its committees. During the
fiscal year ended February 29, 1996, the annual fee was $45,000, and, in
addition, the chairman of each committee will receive an additional $3,500 per
committee. Each director of the Company who is not an employee is entitled to
receive a non-discretionary stock option grant each year. The number of shares
subject to the option is determined pursuant to a formula based on earnings
per share contained in the applicable stock option plan. On June 1, 1995, each
director except Mr. Heller received a stock option grant of 3,711 shares at an
exercise price of $18.56. In accordance with a policy of his law firm, Mr.
Heller elected not to receive an option grant for that year. These options
become exercisable one year after the grant date.
The Company maintains a plan whereby each director who is not an employee
can elect to defer all or a part of his director's fees until a predetermined
date, with the Company agreeing to credit interest on the amount deferred.
Messrs. Donato and Snyder deferred fees during the year ended February 29,
1996. The interest rate credited to fees which are deferred under the plan is
a rate equal to either (i) the Moody's Seasoned Corporate Bond Index or (ii)
the Company's after-tax return on weighted average equity based on the most
recently published earnings for a four fiscal quarter period (but limited to a
minimum of 50% and a maximum of 150% of the Moody's Seasoned Corporate Bond
Index).
DIRECTOR EMERITUS
The Company maintains the position of Director Emeritus for non-employee
directors of the Company who have retired from the Board after having attained
the age of 65 (age 63 for directors serving on the Board on February 11,
1987). Individuals who accept appointment to the position of Director Emeritus
are required to agree to provide advisory and consulting services on certain
business matters concerning the Company and its subsidiaries as the Board may
determine and to attend meetings as requested by the Board at mutually
convenient times. Such individuals are also required to agree to refrain from
entering into an employment or consulting agreement with, or from supplying
any information or materials to, any competitor of the Company or its
subsidiaries. Each such individual receives compensation paid on a monthly
basis based on the number of years of service as a director and the amount of
director's fees paid to him during the last month of service as a director
prior to his retirement in accordance with the following schedule:
<TABLE>
<CAPTION>
MONTHLY
YEARS OF SERVICE COMPENSATION
---------------- ------------
<S> <C>
5 years 45% of last month's
director's fees
10 years 70% of last month's
director's fees
15 years 95% of last month's
director's fees
</TABLE>
The term of the Director Emeritus position is for the life of the
individual. In the event the individual dies while serving the Company prior
to receiving five full years of compensation as a Director Emeritus, a death
benefit is payable in a lump sum to his estate in the maximum amount of one
year's compensation for serving as a Director Emeritus. The Company currently
has three individuals in the position of Director Emeritus: Nathan Supak who
retired in April 1987 and is paid $2,533 per month, Victor R. Witt who retired
in August 1993 and is paid $3,048 per month, and Jack L. Bruckner who retired
in July 1994 and is paid $2,246 per month.
4
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company selected at the annual organizational
meeting of the Board of Directors held July 12, 1995 to serve at the pleasure
of the Board of Directors or subsequently appointed are as follows:
<TABLE>
<CAPTION>
EMPLOYED
NAME AGE OFFICE SINCE
---- --- ------ --------
<S> <C> <C> <C>
David S. Loeb 72 Chairman of the Board and President 1969
Angelo R. Mozilo 57 Vice Chairman of the Board and Executive Vice
President 1969
Stanford L. 43 Senior Managing Director and Chief Operating
Kurland Officer 1979
Kevin W.
Bartlett 38 Managing Director--Secondary Markets 1986
Andrew S.
Bielanski 45 Managing Director--Marketing 1995
Thomas H. Boone 41 Managing Director--Loan Administration 1984
Carlos M. Garcia 40 Managing Director--Finance, Chief Financial
Officer and Chief Accounting Officer 1984
Marshall M.
Gates 44 Managing Director--Production Operations 1988
Sidney Lenz 54 Managing Director 1974
David Sambol 36 Managing Director--Capital Markets 1985
Sandor E. 43 Managing Director--Legal, General Counsel and
Samuels Secretary 1990
Gail Thakarar 52 Managing Director--Human Resources 1993
</TABLE>
David S. Loeb is co-founder of the Company and has been President and
Chairman of the Board of the Company since its formation in March 1969. Mr.
Loeb has been Chairman of the Board and Chief Executive Officer of CWM since
its inception in September 1985.
Angelo R. Mozilo is co-founder of the Company and has been Executive Vice
President and Vice Chairman of the Board of the Company since its formation in
March 1969. Mr. Mozilo has been President of CWM since its inception in
September 1985 and a director since October 31, 1985.
Stanford L. Kurland joined the Company as a Senior Vice President in 1979.
He became Chief Financial Officer in 1983 and Managing Director in 1988. He
was Senior Managing Director, Chief Financial Officer and Chief Operating
Officer from 1989 until March 1995 when he became Senior Managing Director and
Chief Operating Officer.
Kevin W. Bartlett joined the Company in 1986. He became a Managing Director
in May 1991.
Andrew S. Bielanski joined the Company in June 1995 as Managing Director--
Marketing. He is an 18-year veteran of the advertising industry. His most
recent advertising experience included serving as Managing Director of DMB&B
for Eastern Europe from 1990 to 1993 and Managing Director for Lord, Dentsu &
Partners from 1993 to 1995.
Thomas H. Boone joined the Company as a Vice President in 1984 and became a
Managing Director in 1988.
Carlos M. Garcia joined the Company as Vice President, Finance and Chief
Accounting Officer in 1984. He became Senior Vice President in 1986 and
Managing Director--Chief Accounting Officer in 1990. He became Managing
Director--Finance, Chief Financial Officer and Chief Accounting Officer in
March 1995.
5
<PAGE>
Marshall M. Gates joined the Company in 1988. He served as an officer of the
Company's insurance subsidiary and in 1990 was appointed Managing Director--
Production Support and Administration. His title was changed to Managing
Director--Production Operations in 1994.
Sidney Lenz joined the Company in 1974 and became a Managing Director in
March 1995. In 1994 she became president of the Company's subsidiaries engaged
in the title agency business. She previously served as an executive vice
president of the Company's mortgage banking subsidiary.
David Sambol joined the Company in 1985 and became Managing Director--
Capital Markets in July 1994. He also is the president of the Company's
subsidiary engaged in brokering purchases and sales of mortgage loan
servicing.
Sandor E. Samuels joined the Company in 1990 as Senior Vice President,
General Counsel and Secretary. He was appointed Managing Director--Legal,
General Counsel and Secretary in May 1991.
Gail Thakarar joined the Company in January 1993 as Senior Vice President
and became Managing Director--Human Resources in November 1993. From 1989 to
1992 Ms. Thakarar was the Director of Human Resources for Transtechnology
Corporation. Her prior experience included human resources management
positions with Beverly Enterprises, Occidental Petroleum Corporation and
General Electric Company.
PRINCIPAL STOCKHOLDERS
The following table shows, with respect to each person or entity known by
the Company to be the beneficial owner of more than 5% of the Company's Common
Stock as of April 1, 1996, (i) the number of shares of Common Stock so owned
and (ii) the percentage of all shares outstanding represented by such
ownership (based upon the number of shares outstanding as of April 1, 1996).
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
BENEFICIAL NUMBER OF PERCENT
OWNER SHARES OF CLASS
------------------- ---------- --------
<S> <C> <C>
Neuberger & Berman(1)................................ 12,262,042 12.0%
605 Third Avenue
New York, New York 10158
Oppenheimer Group, Inc.(2)........................... 10,552,111 10.3
Oppenheimer Tower, World Financial Center
New York, New York 10281
</TABLE>
- --------
(1) Based upon a Schedule 13G dated March 27, 1996 filed with the Securities
and Exchange Commission.
(2) Based upon a Schedule 13G dated April 8, 1996 filed with the Securities
and Exchange Commission.
6
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following information sets forth the number of shares of the Company's
Common Stock beneficially owned as of April 1, 1996 by each of the directors,
including the nominees for election as directors; the Chairman of the Board
and President; the four other most highly compensated executive officers; and
all directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME OR NUMBER OF NUMBER OF PERCENT
PERSONS IN GROUP SHARES OWNED OPTIONS(1) TOTAL OF CLASS(2)
----------------- ------------ ---------- --------- -----------
<S> <C> <C> <C> <C>
David S. Loeb................ 1,771,035 515,854 2,286,889 2.2 %
Angelo R. Mozilo............. 428,081(3) 552,034 980,115 --
Robert J. Donato............. 37,000 20,898 57,898 --
Ben M. Enis.................. 37,846 53,898 91,744 --
Edwin Heller................. 717 0 717 --
Harley W. Snyder............. 12,285 53,898 66,183 --
Stanford L. Kurland.......... 80,159 264,309 344,468 --
David Sambol................. 2,669 38,111 40,780 --
Carlos M. Garcia............. 64,557 191,114 255,671 --
All directors and executive
officers as a group
(16 persons)................ 2,534,189 2,072,107 4,606,296 4.5
</TABLE>
- --------
(1) Represents shares subject to stock options that are exercisable on April
1, 1996 or become exercisable within 60 days of April 1, 1996.
(2) Percentage information is omitted for individuals who own less than one
percent of the outstanding shares of Common Stock and shares deemed
outstanding due to exercisable options.
(3) Includes 723 shares owned by Mr. Mozilo's spouse as to which Mr. Mozilo
disclaims beneficial ownership.
7
<PAGE>
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the Company and
its subsidiaries to the Chairman of the Board and President and the four other
most highly compensated executive officers of the Company for all services in
all capacities during the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
FISCAL YEAR -------------------- ------------
NAME AND PRINCIPAL ENDED STOCK OPTION ALL OTHER
POSITION FEBRUARY 28 (29) SALARY BONUS SHARES(1) COMPENSATION(2)
- ------------------------- ---------------- --------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
David S. Loeb 1996 $ 966,000 $2,256,870 179,246 $308,845
Chairman of the Board and 1995 878,000 1,121,053 362,226 327,896
President 1994 798,000 2,265,461 283,806 62,452
Angelo R. Mozilo 1996 961,000 2,256,870 179,246 158,663
Vice Chairman of the 1995 873,000 1,121,053 362,226 140,524
Board and Executive Vice 1994 793,000 2,265,461 283,806 84,383
President
Stanford L. Kurland 1996 566,667 750,000 48,000 71,577
Senior Managing Director 1995 475,000 400,000 77,000 75,576
and Chief Operating 1994 450,000 530,000 60,000 25,847
Officer
David Sambol 1996 287,500 500,000 10,000 26,884
Managing Director-- 1995 250,000 500,000 19,000 23,130
Capital Markets
Carlos M. Garcia 1996 291,250 300,000 22,000 36,195
Managing Director-- 1995 265,000 150,000 44,000 35,545
Finance, Chief Financial 1994 255,000 192,000 34,500 15,403
Officer and Chief
Accounting Officer
</TABLE>
- --------
(1) The number of shares subject to stock option grants for fiscal years prior
to 1996 has been adjusted for a 3 for 2 stock split in May 1994 and a 5%
stock dividend in April 1993, as applicable.
(2) Amounts shown for fiscal 1996 consist of the following: (i) Mr. Loeb:
Company contribution to deferred compensation account--$169,050; the
portion of interest accrued on deferred compensation that exceeds 120% of
the applicable federal rate--$6,735; life insurance premiums--$133,060;
(ii) Mr. Mozilo: Company contribution to 401(k) Plan--$4,425; Company
contribution to deferred compensation account--$144,150; the portion of
interest accrued on deferred compensation that exceeds 120% of the
applicable federal rate--$10,088; (iii) Mr. Kurland: Company contribution
to 401(k) Plan--$4,260; Company contribution to deferred compensation
account--$35,625; the portion of interest accrued on deferred compensation
that exceeds 120% of the applicable federal rate--$4,115; life insurance
premiums--$27,577; (iv) Mr. Sambol: Company contribution to 401(k) Plan--
$4,620; Company contribution to deferred compensation account--$6,250; the
portion of interest accrued on deferred compensation that exceeds 120% of
the applicable federal rate--$1,392; life insurance premiums--$14,622; and
(v) Mr. Garcia: Company contribution to 401(k) Plan--$4,620; Company
contribution to deferred compensation account--$17,040; the portion of
interest accrued on deferred compensation that exceeds 120% of the
applicable federal rate--$2,006; life insurance premiums--$12,529.
8
<PAGE>
The following table sets forth information on the stock options granted to
the named executive officers in the fiscal year ended February 29, 1996.
STOCK OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE
OPTIONS TO EMPLOYEES PRICE EXPIRATION GRANT DATE
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SHARE)(2) DATE PRESENT VALUE(3)
---- ------------- --------------- ------------ ---------- ----------------
<S> <C> <C> <C> <C> <C>
David S. Loeb........... 179,246 16.3% $18.56 6/01/05 $1,442,882
Angelo R. Mozilo........ 179,246 16.3 18.56 6/01/05 1,442,882
Stanford L. Kurland..... 48,000 4.4 18.56 6/01/05 386,387
David Sambol............ 10,000 0.9 18.56 6/01/05 80,497
Carlos M. Garcia........ 22,000 2.0 18.56 6/01/05 177,094
</TABLE>
- --------
(1) Options become exercisable at the rate of 25% on the first, second, third
and fourth anniversary of the grant date, except in the event of a "Change
of Control" as defined in the relevant stock option plan. Upon a Change of
Control, all options become immediately exercisable.
(2) The exercise price is not less than the market value of the Common Stock
on the date of grant. Options were granted on June 1, 1995.
(3) The present value of the options as of the grant date was calculated using
the Black-Scholes options pricing model which has been modified to
consider estimated cash dividends to be paid. The assumptions used in the
model were: expected volatility of 30%, risk-free rate of return
(approximately equal to the ten year Treasury rate at the grant date) of
6.2%, dividend yield of 2.0% and time to exercise of ten years. No
discounting was done to account for non-transferability or vesting. The
actual value, if any, an executive may realize will depend on the excess
of the stock price over the exercise price on the date the option is
exercised.
The following table sets forth information on stock option exercises during
the fiscal year and outstanding options and their value at February 29, 1996.
Value is calculated as the difference between the fair market value of the
Common Stock and the exercise price of the options at the exercise date or
fiscal year end.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FEBRUARY 29, 1996(#) FEBRUARY 29, 1996($)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David S. Loeb........... 0 $ 0 316,805 630,362 $1,218,690 $2,300,527
Angelo R. Mozilo........ 0 0 352,983 630,363 1,487,894 2,300,534
Stanford L. Kurland..... 0 0 264,307 151,610 3,069,113 581,757
David Sambol............ 20,000 342,021 38,113 35,688 230,832 139,096
Carlos M. Garcia........ 0 0 191,111 81,307 2,524,192 318,230
</TABLE>
9
<PAGE>
DEFINED BENEFIT PENSION PLAN
The following table illustrates annual pension benefits under the Company's
Defined Benefit Pension Plan (the "Pension Plan") for participants retiring in
1996 at age 65 payable in the form of a life annuity under various levels of
compensation and years of service. The pension benefits in the table are not
subject to deduction for Social Security or other offset amounts.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE ---------------------------------------
COMPENSATION(1) 10 15 20 25 30
--------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 125,000......................... $12,850 $30,980 $39,100 $47,230 $55,360
250,000......................... 15,850 44,670 60,000 75,320 90,640
500,000......................... 15,850 44,670 60,000 75,320 90,640
750,000......................... 15,850 44,670 60,000 75,320 90,640
1,000,000......................... 15,850 44,670 60,000 75,320 90,640
</TABLE>
- --------
(1) As the result a limitation, effective January 1, 1994, under the Internal
Revenue Code of 1986, as amended (the "Code") annual compensation in
excess of $150,000 is not taken into account when calculating benefits
under the Pension Plan.
The compensation used for Pension Plan purposes is the amount shown in the
Salary column of the Summary Compensation Table, subject to the $150,000
limitation under the Code. The following table sets forth the number of years
of credited service of each executive officer listed in the Summary
Compensation Table.
<TABLE>
<CAPTION>
CREDITED
YEARS OF
NAME SERVICE
---- --------
<S> <C>
David S. Loeb................................................. 27
Angelo R. Mozilo.............................................. 27
Stanford L. Kurland........................................... 16
David Sambol.................................................. 10
Carlos M. Garcia.............................................. 11
</TABLE>
Benefits are 100% vested after five years of service. A participant shall be
fully vested in his accrued normal retirement benefit regardless of his length
of service if his employment is terminated by the Company other than for
"Cause" within the two-year period following a "Change in Control" (as both
items are defined in the Pension Plan).
The Company adopted a Supplemental Executive Retirement Plan (the "SERP"),
effective in fiscal 1995, designed to provide executives with retirement
income equal to 70% of their average annual salary determined by averaging the
five highest salaried years out of the ten years preceding retirement.
Benefits under the SERP are reduced by benefits the participant receives from
(i) the Pension Plan and (ii) the Company's contributions to the participant's
deferred compensation account. The annual benefit under the SERP will be:
Messrs. Mozilo, Kurland, Sambol and Garcia (assuming retirement at age 65)
$239,219, $207,209, $348,485 and $87,308, respectively; and Mr. Loeb (assuming
retirement at age 80) $201,483.
CHANGE OF CONTROL ARRANGEMENTS
The SERP provides for a lump sum payment to a participant, including an
executive officer listed in the Summary Compensation Table, in the event of a
"Change in Control" (as defined in the SERP). The lump sum payment is to be
made within 60 days of the Change in Control, and the amount paid is to be
determined as if employment terminated on the date the Change in Control
became effective.
10
<PAGE>
EMPLOYMENT AGREEMENTS
David S. Loeb and Angelo R. Mozilo
Effective March 1, 1991, the Company entered into employment agreements with
David S. Loeb, Chairman of the Board and President of the Company, and Angelo
R. Mozilo, Vice Chairman of the Board and Executive Vice President of the
Company (individually, an "Officer"), providing for certain compensation,
death, disability and termination benefits (the "Current Agreements").
The Current Agreements were amended and restated by the Board and executed
by the Officers as of March 26, 1996 (the "Restated Agreements"), subject to
the approval of the Company's stockholders at the Meeting of (i) the
provisions of the Restated Agreements relating to the annual cash bonus
payable to the Officers and (ii) the amendments to the 1993 Stock Option Plan.
See "Proposal Two" and "Proposal Four." If stockholders approve both Proposals
Two and Four, the Restated Agreements, as described below, will become
effective as of the date of such approvals. In the absence of such approvals,
the Current Agreements, as described below, will remain in effect.
The Current Agreements. The Current Agreements provide for the retention of
each Officer's services for the period commencing March 1, 1991 and
terminating on February 28, 1997. The Current Agreements were amended during
the fiscal year ended February 28, 1993 to, among other things, give the
Company the option to extend the Current Agreements for an additional year at
the same rate of increase of base salary.
Mr. Loeb's Current Agreement provides for a base annual salary of $966,000
for the fiscal year ended February 28, 1996, increasing by 10% to $1,063,000
for the fiscal year ending February 28, 1997. Mr. Mozilo's Current Agreement
provides for a base annual salary of $961,000 for the fiscal year ended
February 28, 1996, increasing by 10% to $1,058,000 for the fiscal year ending
February 28, 1997.
The Current Agreements provide for additional incentive compensation in each
year during the term thereof beginning in the fiscal year ended February 28,
1994 in the form of an annual cash bonus pursuant to a formula that multiplies
the prior year's bonus by the ratio of the current year's earnings per share
over that of the previous year (the "Performance Ratio"). The Current
Agreements also provide for additional incentive compensation in the form of
grants of stock options under the 1991 Stock Option Plan or any other stock
option plans which may be or come into effect pursuant to a formula that
multiplies the prior year's stock option grant by the Performance Ratio. See
"Executive Compensation--Stock Option Grants in Fiscal Year 1996." The Current
Agreements provide that each Officer is also entitled to all rights and
benefits for which he is otherwise eligible under any plans or benefits which
the Company or its subsidiaries may provide for him or, provided he is
eligible to participate therein, for senior officers or employees generally.
The Current Agreements provide that in the event of the disability of the
Officer, he shall receive compensation in an annual amount equal to (i) 50% of
his then current salary, minus (ii) the amount of any cash payments to him
under the terms of the Company's disability insurance or other disability
benefit plans or the Company's Pension Plan and any compensation he may
receive pursuant to any other employment. These payments shall be made until
the earlier of the Officer's death, commencement of benefits under the
Company's pension plan or five years from the date of the disability. The
Company is also required to afford each Officer during the disability period
other employment benefits to which he otherwise would be entitled. In the
event of the death of the Officer during the term of his Current Agreement,
the Company shall pay to his beneficiary an amount equal to the Officer's
salary for 12 months following the date of death and shall provide to such
beneficiary certain other rights or benefits to which the Officer would
otherwise be entitled.
11
<PAGE>
If the Officer is terminated for "Cause" or resigns voluntarily without
"Good Reason," all of his rights under the Current Agreement shall terminate.
"Cause" is defined as (i) a material breach of the Current Agreement by the
Officer which is committed in bad faith or without reasonable belief that such
breach is in the best interests of the Company and which is not remedied
within a reasonable period of time after receipt of written notice from the
Company specifying such breach, (ii) the Officer's conviction by a court of
competent jurisdiction of a felony or (iii) entry of an order duly issued by
any federal or state regulatory agency having jurisdiction in the matter
removing the Officer from office with the Company or its subsidiaries or
permanently prohibiting him from participating in the conduct of the affairs
of the Company and its subsidiaries.
If (i) the Officer is terminated without Cause or (ii) the Officer
terminates his employment because (a) the Company breaches the Current
Agreement in a material respect or (b) the Board elects a person other than
the Officer to his current position without his consent or reorganizes
management so as to require him to report to a person or persons other than
the Board or otherwise in the Officer's judgment diminishes the Officer's
status, title, position and responsibilities or (iii) the Officer terminates
his employment for any reason within one year of a "change in control," then
the Company shall pay him three times the sum of his then-existing base salary
and incentive compensation paid for the prior fiscal year. Under the Current
Agreements, a change in control is deemed to have occurred upon the happening
of: (1) the acquisition of 50% of the Company's voting securities; (2) the
approval of the Company's stockholders of (i) certain mergers or
consolidations of the Company with or into another corporation, (ii) a plan of
liquidation or dissolution of the Company or (iii) the sale or other
disposition of all or substantially all of the Company's assets, or (3) the
individuals who constituted the Board as of March 1, 1991 (including members
of the Board who assumed ofice after March 1, 1991 and whose election was
approved by at least two-thirds of the members of the Board, but excluding any
member whose initial assumption of office occurred as the result of a proxy
contest or solicitation) cease to constitute at least two-thirds of the
members of the Board. "Good Reason" is defined as any termination under either
clause (ii) or (iii) of the first sentence of this paragraph. Under certain
circumstances, this provision of each Officer's Current Agreement may result
in a payment being made which is not tax deductible by the Company as
compensation pursuant to the Code.
The Restated Agreements. The Restated Agreements are similar to the Current
Agreements in all material respects except as described below.
Term/Salary. Under the Restated Agreements, the term of employment would be
extended to February 28, 2001 at an annual salary of $1,300,000.
Annual Bonus. The Compensation Committee would be permitted to reduce the
annual cash bonus for any fiscal year in which there has been a substantial
distortion to earnings per share as a result of an acquisition, divestiture or
change in accounting standards. See "Proposal Two."
Stock Options. The Restated Agreements provide that, in lieu of the annual
grant of stock options in respect of the fiscal years ending in 1997, 1998 and
1999, the Company would grant to each Officer stock options in respect of
1,000,000 shares of Common Stock. Such grant would be made on the first
business day following the Meeting and would vest ratably on each of the first
three anniversaries of the grant date. The Restated Agreements also authorize
the Compensation Committee to grant stock options, in amounts to be determined
by the Compensation Committee, to each Officer in respect of the fiscal years
ending in 2000 and 2001.
Disability. Under the Restated Agreements, in the event of the termination
of the Officer's employment by reason of his disability, he would continue to
receive annual compensation (the amount of which is determined under the
Restated Agreement) until the earlier of the Officer's death or five years
from the date of the disability.
12
<PAGE>
Benefits Upon Termination in Certain Circumstances. Under the Restated
Agreements, in the event the Company terminates the Officer's employment
without Cause or the Officer terminates employment for Good Reason, the
Company would continue for a period of three years to provide all health,
disability and welfare type benefits in addition to paying the amounts
described under "Current Agreements."
Change in Control. The definition of change in control in the Restated
Agreements would differ from that in the Current Agreements by, among other
things, reducing from 50% to 25% the threshold percentage of shares that must
be acquired to trigger a change in control. Under the Restated Agreements, a
change in control would also occur upon the acquisition of 25% of the
Company's Common Stock, whereas previously, an acquisition of 25% of all of
the Company's voting securities was required.
Stanford L. Kurland
The Company has entered into an employment agreement with Stanford L.
Kurland, Senior Managing Director and Chief Operating Officer of the Company
and President of Countrywide Home Loans, Inc., a wholly-owned subsidiary of
the Company, providing for certain compensation, death, disability and
termination benefits (the "Agreement"). The Agreement is effective as of the
date of the Meeting (the "Effective Date"), subject to the approval by the
Company's stockholders at the Meeting of (i) the Company's Annual Incentive
Plan and (ii) the amendments to the 1993 Stock Option Plan. See "Proposal
Three" and "Proposal Four." In the absence of the approval of either Proposal
Three or Proposal Four, the Agreement shall be null and void.
The Agreement provides for the retention of Mr. Kurland's services for the
period commencing on the Effective Date and terminating on February 28, 1999.
The Agreement provides for a base annual salary of $675,000 (the "Annual
Rate") for the fiscal year ending February 28, 1997. In respect of the fiscal
years ending in 1998 and 1999, the Annual Rate may be increased by the
Compensation Committee, based on the recommendation of Mr. Mozilo, by no less
than 5% and no more than 10% each year.
The Agreement provides for additional incentive compensation in respect of
each fiscal year ending during the term thereof in the form of an annual cash
bonus pursuant to the terms and conditions of the Annual Incentive Plan.
Specifically it provides that Mr. Kurland's target bonus under the Annual
Incentive Plan for each fiscal year is $650,000, and Mr. Kurland may be
awarded from 0% to 275% of the target, subject to the satisfaction of certain
earnings per share and return on equity goals. See "Proposal Three." The
Agreement also provides for additional incentive compensation in the form of
grants of stock options under the 1993 Stock Option Plan or any other stock
option plans which may be or come into effect. In respect of each fiscal year
ending during the term of the Agreement, Mr. Kurland will be granted options
for no less than 75,000 and no greater than 175,000 shares of the Company's
Common Stock. These numbers would be adjusted proportionately in the event the
Company (A) declares a stock dividend on its Common Stock, (B) subdivides its
outstanding Common Stock, (C) combines the outstanding shares of its Common
Stock into a smaller number of shares of Common Stock or (D) issues any shares
of its Common Stock in a reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation). The Agreement further
provides that Mr. Kurland is entitled to all rights and benefits for which he
is otherwise eligible under any plans or benefits which the Company or its
subsidiaries may provide for him or, provided he is eligible to participate
therein, for senior officers or employees generally.
The Agreement provides that in the event of his disability, Mr. Kurland
shall receive compensation in an annual amount equal to (i) 50% of his then
current salary, minus (ii) the amount of any cash payments to him under the
terms of the Company's disability insurance, other disability benefit plans or
the Company's Pension Plan and any compensation he may receive pursuant to any
other employment. These payments shall be made until the earlier of his death
or five years from the date of the disability. The Company is also required to
afford
13
<PAGE>
Mr. Kurland during the disability period other employment benefits to which he
otherwise would be entitled. In the event of Mr. Kurland's death during the
term of the Agreement, the Company shall pay to his beneficiary an amount
equal to his salary for 12 months following the date of death and shall
provide to such beneficiary certain other rights or benefits to which Mr.
Kurland would otherwise be entitled.
If Mr. Kurland is terminated for "Cause" or resigns voluntarily without
"Good Reason," all of his rights under the Agreement terminate. "Cause" is
defined as (i) a material breach of the Agreement by Mr. Kurland which is
committed in bad faith or without reasonable belief that such breach is in the
best interests of the Company and which is not remedied within a reasonable
period of time after receipt of written notice from the Company specifying
such breach, (ii) Mr. Kurland's conviction by a court of competent
jurisdiction of a felony or (iii) entry of an order duly issued by any federal
or state regulatory agency having jurisdiction in the matter removing Mr.
Kurland from office with the Company or its subsidiaries or permanently
prohibiting him from participating in the conduct of the affairs of the
Company and its subsidiaries.
If during the term of the Agreement Mr. Kurland is terminated without Cause,
then (i) until February 28, 1999 or the second anniversary of Mr. Kurland's
termination date, whichever is later (the "Severance Period"), the Company
shall continue to pay Mr. Kurland his annual base salary, at the rate in
effect on his termination date and shall provide the other rights and benefits
to which Mr. Kurland would otherwise be entitled, (ii) the Company shall pay
Mr. Kurland, in respect of each fiscal year ending during the Severance
Period, an amount equal to Mr. Kurland's annual incentive compensation under
the Annual Incentive Plan in respect of the fiscal year immediately preceding
the fiscal year in which Mr. Kurland is terminated (the "Bonus Rate");
provided, however, that in the event the Severance Period ends on a date prior
to the end of a fiscal year, the Company shall also pay Mr. Kurland an amount
equal to the product of (x) the Bonus Rate and (y) the fraction obtained by
dividing (I) the number of days elapsed since the end of the immediately
preceding fiscal year through the end of the Severance Period by (II) 365, and
(iii) all outstanding stock options held by Mr. Kurland on his termination
date shall become immediately and fully exercisable.
If after a Change in Control (as defined in the Agreement) and during the
term of the Agreement (i) Mr. Kurland is terminated without Cause or (ii) Mr.
Kurland terminates his employment for Good Reason, then the Company shall pay
him three times the sum of his then-existing base salary and incentive
compensation paid for the prior fiscal year. "Good Reason" is deemed to occur
under the Agreement where the Company breaches the Agreement in any material
respect or diminishes Mr. Kurland's status, title, position and
responsibilities. Under certain circumstances, this provision of the Agreement
may result in a payment being made which is not tax deductible by the Company
as compensation pursuant to the Code.
CERTAIN TRANSACTIONS
During fiscal 1996, the Company through its subsidiaries entered into
various transactions with CWM. CWM incurred obligations to the Company for
management fees during fiscal 1996 of $8.6 million. CWM has an option to
purchase mortgage loans from the Company at the prevailing market price.
During the year ended February 29, 1996, CWM purchased $14.3 million of
mortgage loans pursuant to this option. Subsidiaries of CWM have entered into
servicing agreements with the Company providing for the servicing of mortgage
loans securing collateralized mortgage obligations. Servicing fees under these
agreements were approximately $242,000 for the year ended February 29, 1996.
In addition, in connection with CWM's mortgage conduit operations, the Company
sub-serviced loans for sub-servicing fees of $391,000 during fiscal 1996.
The Company maintains a plan (the "Financing Plan"), which was ratified and
approved by the stockholders, to facilitate the exercise of stock options.
During the fiscal year ended February 29, 1996, Mr. Loeb's loan under the
Financing Plan was reduced from $303,642 to $202,428, which amount was
14
<PAGE>
outstanding at February 29, 1996 and bears an annual interest rate of 3.25%.
Mr. Garcia has four loans under the Financing Plan, with interest rates
ranging from 3.25% to 3.75%. Mr. Garcia's highest aggregate indebtedness to
the Company during fiscal 1996 was $68,717, which indebtedness had been
reduced to $55,969 at February 29, 1996. Mr. Donato has three loans under the
Financing Plan, with interest rates ranging from 5.79% to 6.87%. Mr. Donato's
highest aggregate indebtedness to the Company during fiscal 1996 was $122,975,
which amount was outstanding at February 29, 1996.
Mr. Heller is a partner in the law firm of Fried, Frank, Harris, Shriver &
Jacobson. This firm performed services for the Company in fiscal 1996, and the
Company intends to retain the services of this firm in fiscal 1997.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of Messrs. Snyder, Donato and Enis,
who are non employee directors of the Company. The Company's executive
compensation program consists of three main components: (1) base salary, (2)
potential for annual cash incentive compensation based on the Company's
overall performance and the employee's individual performance and (3) stock
options to provide long-term incentives for performance and to align executive
officer and stockholder interests. There is no fixed ratio of total
compensation to be represented by salary, incentive compensation or stock
options. In addition to the determinations made by the Compensation Committee
during fiscal 1996, the Compensation Committee, joined by Mr. Heller,
conducted a thorough review over the course of 13 meetings of the employment
agreements and compensation arrangements of the top two executives of the
Company, Messrs. Loeb and Mozilo. The Compensation Committee also reviewed the
compensation arrangements of Mr. Kurland. As more fully described below, in
recognition of the importance of retaining the current management team, the
Board determined to extend the term of the employment agreements of Messrs.
Loeb and Mozilo and to enter into an employment agreement with Mr. Kurland.
A. Review of Employment Agreements of Messrs. Loeb and Mozilo
The Compensation Committee was also assisted in the review of the
arrangements with Messrs. Loeb and Mozilo by a nationally recognized
compensation consulting firm. The purposes of this review were:
. To consider extending the expiration dates of the Current Agreements, in
order to permit the Company to have available the continued services of
the individuals who have guided it since its inception.
. To specifically review the arrangements pertaining to base salary,
annual incentives and stock option grants--all of which are determined
by formula under the Current Agreements.
. To review other aspects of the Current Agreements for their continued
appropriateness in the environment in which the Company operates.
The Compensation Committee analyzed salary and incentive compensation paid
to top executives across a wide range of organizations, including financial,
industrial and service companies, as well as key mortgage banking related
organizations such as the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation.
The review extended over a number of in-person and telephonic meetings. The
results of this review were incorporated in (i) the new employment agreements
for Messrs. Loeb and Mozilo, including the new stock option provisions and
(ii) the amendments to the 1993 Stock Option Plan, which are being submitted
for approval of the stockholders at this Meeting, and which are described
elsewhere in this Proxy Statement. See "Proposal Two" and "Proposal Four." If
these proposals are approved by the Company's stockholders, the revised
employment agreements of Mr. Loeb and Mr. Mozilo will take effect, including
extending their terms until the end of fiscal 2001.
15
<PAGE>
COMPENSATION OF PRESIDENT AND EXECUTIVE VICE PRESIDENT AFTER FISCAL 1996
Under the Current Agreements, Mr. Loeb is entitled to a base salary of
$1,063,000 and Mr. Mozilo to a base salary of $1,058,000 for fiscal 1997. The
Company has the option of extending the agreements with a base salary increase
of 10% each, to $1,169,000 and $1,164,000 respectively, for fiscal 1998.
Under the proposed Restated Agreements, the base salaries for both Mr. Loeb
and Mr. Mozilo will be set at $1,300,000 per year through fiscal 2001. The
Compensation Committee recognizes this base salary is at the upper end of
competitive practice for large U.S. corporations. However, given the critical
role of these two individuals in building the Company and producing the
outstanding results stockholders have seen over its 27 years as a public
company--and the contributions expected of them over the extended term of the
proposed Restated Agreements--the Compensation Committee believes these base
salaries to be appropriate.
The annual incentive formula for Mr. Loeb and Mr. Mozilo has been in place
since March 1, 1991, and in the view of the Compensation Committee has served
the Company well. Annual incentives for Mr. Loeb and Mr. Mozilo are determined
by a formula based on the earnings per share of the Company in each fiscal
year compared to the prior year. This relationship of current year to prior
year earnings per share is applied to the prior year's incentive earned--so
that annual incentive awards for these two top executives are determined by
how much earnings per share increase or decrease each year.
After careful review of the history and workings of this formulaic approach,
the Compensation Committee determined that it should continue to be applied to
the top two executives. The income tax deduction limitation of Section 162(m)
of the Code (described in more detail below) generally is applicable to
compensation payable under an incentive plan not covered by a contract in
effect on February 17, 1993 (and not subsequently materially modified),
unless, among satisfying other requirements, such plan is approved by
stockholders. The Company is submitting the incentive compensation provision
of the Restated Agreements for stockholder approval at this Meeting so that
the incentive compensation payable thereunder may continue not to be subject
to the Section 162(m) deduction limitation. See "Proposal Two." The formula is
unchanged, except that it now provides the Compensation Committee the
discretion to make downward adjustments in the payouts, when, in its judgment,
an acquisition, divestiture or change in accounting standards results in a
substantial distortion in reported earnings per share for that year.
STOCK OPTIONS FOR PRESIDENT AND EXECUTIVE VICE PRESIDENT AFTER FISCAL 1996
The Compensation Committee determined that the best interests of the
Company's stockholders would be better served in the future by modifying the
formula under the Current Agreements for determining stock option grants for
Messrs. Loeb and Mozilo. While the Compensation Committee believes that this
formula has served the Company well, they also believe that these two executives
should, at this time in the Company's history, receive a fixed, substantive
stake in the performance of the Company's Common Stock, in the form of stock
options whose value is strictly a function of the appreciation in the stock
price.
Therefore, subject to approval of the amendments to the 1993 Stock Option
Plan being submitted to stockholders at this Meeting (see "Proposal Four"),
each of Messrs. Loeb and Mozilo would be granted options to purchase 1,000,000
shares of Common Stock at an exercise price equal to the fair market value of
the shares as of the date of grant, which will be the first business day
following the Meeting. This grant would be the only stock option grant to
Messrs. Loeb and Mozilo in respect of fiscal years 1997, 1998 and 1999, and
would thus represent an average grant of approximately 333,333 shares per
year. The option shares would vest ratably over three years. The Compensation
Committee believes that options covering this number of shares are appropriate
16
<PAGE>
for these individuals. As part of its review, the Compensation Committee
compared the average annual option grant under the proposed grant to the
options expected to be granted in June 1996 under the current contractual
formula. Based on that formula, an option for 364,093 shares each will be
granted June 1, 1996, in respect of fiscal 1996.
Under the Restated Agreements, option grants to Messrs. Loeb and Mozilo in
respect of fiscal years after 1999 would no longer be determined by formula,
but would be at the discretion of the Compensation Committee, based on Company
performance, individual performance, and competitive practice at the time.
B. Review of Employment Arrangements of Mr. Kurland
The Compensation Committee also reviewed the employment and compensation
arrangements for Mr. Kurland. Upon the recommendation of Mr. Mozilo, and with
the advice of a nationally recognized compensation consulting firm, the
Compensation Committee considered Mr. Kurland's past contributions to the
Company's success and his importance to its future success, particularly in
his capacity as Senior Managing Director and Chief Operating Officer of the
Company and President of Countrywide Home Loans, Inc.
In recognition of the importance of retaining the current management team,
the Compensation Committee and the Board determined that a formal employment
agreement with Mr. Kurland covering fiscal years 1997 through 1999 would be in
the best interest of the Company's stockholders. As part of this agreement,
the Compensation Committee approved several changes in Mr. Kurland's
compensation beginning in fiscal 1997. These decisions were based on data
relating to senior executive compensation at other companies engaged in the
mortgage business and on the recommendations of the compensation consulting
firm engaged by the Compensation Committee. If the new Annual Incentive Plan
and the amendments to the 1993 Stock Option Plan are approved by stockholders,
then the new compensation arrangements and employment agreement for Mr.
Kurland will take effect for fiscal 1997. See "Proposal Three" and "Proposal
Four."
These arrangements include a fiscal 1997 base salary of $675,000 and an
annual incentive award determined under the provisions of the new Annual
Incentive Plan, with Mr. Kurland's award based on the earnings per share and
return on equity of the Company against pre-established goals. The
Compensation Committee believes that these are the appropriate criteria for
measuring Mr. Kurland's contributions to the Company, that the goals
established represent a high level of performance for the stockholders if
achieved or exceeded, and that the awards generated are in keeping with the
level of performance required.
In addition, Mr. Kurland will be entitled to annual grants of options to
purchase between 75,000 and 175,000 shares of the Company's Common Stock, as
determined by the Compensation Committee, with an exercise price equal to the
fair market value of the shares on the grant date. The Committee believes that
this is an appropriate range for Mr. Kurland and the position he occupies in
the Company.
C. Other Actions of Compensation Committee
COMPENSATION OF PRESIDENT AND EXECUTIVE VICE PRESIDENT IN FISCAL 1996
Compensation for fiscal 1996 for Messrs. Loeb and Mozilo was determined
under their existing employment agreements, entered into during 1991 and
amended during 1992 and 1993. See "Executive Compensation-- Employment
Agreements--David S. Loeb and Angelo R. Mozilo." As provided by these
agreements, both the stock option grants and the annual incentives Messrs.
Loeb and Mozilo received were determined by multiplying the prior year's stock
option grant and annual incentive, respectively, by a performance ratio
obtained by dividing
17
<PAGE>
the most recent fiscal year's earnings per share by the prior year's. The
performance ratio with respect to the stock options granted on June 1, 1995 in
respect of fiscal 1995 was calculated by comparing earnings per share for
fiscal years 1995 and 1994. The performance ratio for the annual incentives
paid with respect to fiscal 1996 was calculated by comparing earnings per
share for fiscal years 1996 and 1995. Because earnings per share decreased in
fiscal 1995 over fiscal 1994, the stock options granted on June 1, 1995
decreased compared to the prior year. Earnings per share increased in fiscal
1996 compared to fiscal 1995 resulting in an increase in the annual incentives
paid with respect to fiscal 1996.
COMPENSATION OF OTHER EXECUTIVES FOR FISCAL 1996
With respect to the base salaries and annual incentives of the three most
highly paid executives excluding Messrs. Loeb and Mozilo for fiscal 1996, the
Compensation Committee met with Mr. Mozilo to review recommendations regarding
their base salaries and annual incentive levels. The decisions of the
Compensation Committee with respect to the base salaries for each such
executive officer are subjective and were made after consideration of the
performance of the executive in his particular area of responsibility, the
executive's contribution to the Company's overall management team, publicly
available information as to salaries paid by the Company's competitors for
comparable positions, and an assessment of the future contributions the
executive should be able to make to the Company.
STOCK OPTIONS FOR FISCAL 1996
The Compensation Committee oversees the determination of the overall number
of employee stock options to be granted each year and how those options are to
be distributed among the employees. In the fiscal year ended February 28, 1994
the Compensation Committee studied comparisons of the amount of stock options
granted in relation to a company's issued and outstanding stock. As a result
of this study, the Compensation Committee determined that it would be
appropriate for stock options granted in any fiscal year to be in a range not
to exceed 3% of the outstanding stock of the Company during that fiscal year.
Options granted in fiscal 1996 equaled 1.1% of the outstanding stock of the
Company at the end of the fiscal year.
Options were granted to executive officers on June 1, 1995 based on the
performance of the Company in fiscal 1995 compared to the performance in
fiscal 1994. The number of shares subject to the options granted to each such
executive officer decreased from the prior year.
DEDUCTIBILITY OF COMPENSATION
As part of the Omnibus Budget Reconciliation Act of 1993, a new provision
was added to the Internal Revenue Code which limits the corporate deduction
for compensation paid to the executive officers named in the Summary
Compensation Table to $1 million unless such compensation is based upon
performance goals or paid pursuant to a written contract that was in effect on
February 17, 1993 and not subsequently materially modified.
Because their employment agreements were entered into prior to this date, the
compensation paid to Messrs. Loeb and Mozilo has not been subject to this
limit. The Compensation Committee believes that the new annual incentive
compensation provision of the Restated Agreements, the amendments to the 1993
Stock Option Plan and the Annual Incentive Plan, if approved by the Company's
stockholders, will allow continued deductibility of the incentive compensation
and stock option components of the compensation for Messrs. Loeb and Mozilo--
as well as for other executive officers participating in the 1993 Stock Option
Plan and the Annual Incentive Plan. The Committee recognizes that the base
salaries of Messrs. Loeb and Mozilo will not be deductible to the extent they
exceed $1 million, but considers this additional amount not to be significant
to the Company.
18
<PAGE>
The Committee's policy on deductibility is generally to develop compensation
plans which provide for the payment of compensation that is tax deductible to
the Company, while recognizing that the legitimate interests of the Company
and its stockholders may at times be better served by compensation
arrangements which are not deductible.
The Compensation Committee
Harley W. Snyder, Chairman
Robert J. Donato
Ben M. Enis
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Snyder (chairman), Donato and
Enis. As noted above in the "Certain Transactions" section, Mr. Donato has
three loans under the Financing Plan, with interest rates ranging from 5.79%
to 6.87%. Mr. Donato's highest aggregate indebtedness to the Company during
fiscal 1996 was $122,975 which was the amount outstanding at February 29,
1996. No member of the Compensation Committee was, during the fiscal year, an
officer or employee of the Company or any of its subsidiaries, nor was any
member of the Compensation Committee formerly an officer of the Company or any
of its subsidiaries. No executive officer of the Company served (i) as a
member of the compensation committee or board of directors of another entity,
one of whose executive officers served on the Compensation Committee or (ii)
as a member of the compensation committee of another entity, one of whose
executive officers served on the Board.
19
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG COUNTRYWIDE CREDIT INDUSTRIES, INC.
S&P 500 INDEX AND S&P FINANCIAL INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period FYE FYE FYE FYE FYE FYE
(Fiscal Year Covered) 1991 1992 1993 1994 1995 1996
- --------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
COUNTRYWIDE CREDIT 100.00 292.69 420.07 326.49 325.74 427.55
S&P 500 INDEX 100.00 115.99 128.34 139.04 149.28 201.08
S&P FINANCIAL INDEX 100.00 128.59 164.01 171.74 186.64 274.59
</TABLE>
The comparison of total return on investment (change in year end stock price
plus reinvested dividends) for each of the periods assumes that $100 was
invested on February 28, 1991 in each of the Company, the S&P 500 Index and the
S&P Financial Index.
20
<PAGE>
PROPOSAL TWO
APPROVAL OF ANNUAL CASH BONUS
PROVISIONS OF THE EMPLOYMENT AGREEMENTS
FOR DAVID S. LOEB AND ANGELO R. MOZILO
Stockholder approval of the annual cash bonus provisions of the Restated
Agreements of Mr. Loeb and Mr. Mozilo is required in order for amounts paid
thereunder not to be subject to the deduction limitation of Section 162(m) of
the Code. In the absence of stockholder approval of both this Proposal and
Proposal Four, the Restated Agreements will not take effect and the Current
Agreements will remain in effect. See "Executive Compensation--Employment
Agreements--David S. Loeb and Angelo R. Mozilo."
Section 162(m) of the Code generally disallows a federal income tax
deduction to any publicly-held corporation for compensation paid in excess of
$1 million in any taxable year to the chief executive officer or any of the
four other most highly compensated executive officers who are employed by the
corporation on the last day of the taxable year (the "Covered Employees").
Section 162(m), however, does not disallow a federal income tax deduction for
qualified "performance based compensation," the material terms of which are
disclosed to and approved by stockholders. The Company has structured the
annual cash bonus provisions with the intention that compensation resulting
therefrom would be qualified "performance-based compensation."
One of the purposes of the Restated Agreements is to provide incentives to
Messrs. Loeb and Mozilo to dedicate themselves to the financial success of the
Company as measured based on objective financial criteria. To this effect, the
annual cash bonus provisions of the Restated Agreements provide for an annual
cash bonus to each of Messrs. Loeb and Mozilo for each of the fiscal years
ending in 1997 through 2001 equal to the amount of the annual cash bonus paid
to him in the previous fiscal year, multiplied by a fraction the numerator of
which is the earnings per share on a fully diluted basis of the Company during
such current fiscal year (the "EPS") and the denominator of which is the EPS
for the previous fiscal year. For fiscal 1996, Messrs. Loeb and Mozilo each
received an annual bonus of $2,256,870. The EPS would be adjusted
proportionately in the event the Company (A) declares a stock dividend on its
Common Stock, (B) subdivides its outstanding Common Stock, (C) combines the
outstanding shares of its Common Stock into a smaller number of shares of
Common Stock or (D) issues any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation). The Compensation Committee of the Board
is authorized to reduce the amount of the cash bonus in the event there is a
substantial distortion in EPS resulting from an acquisition, divestiture, or
change in accounting standards. The Restated Agreements can be amended in any
respect without stockholder approval, although the Company has no current
intention of doing so.
Future cash bonuses payable pursuant to the Restated Agreements are not
determinable because they are calculated based on EPS for a given fiscal year.
Because the formula for determining the cash bonuses in the Restated
Agreements is unchanged from the formula in the Current Agreements, the fiscal
1996 bonuses would not have changed if the Restated Agreements had been in
effect. The EPS for fiscal 1996 was $1.95. The following table sets forth the
annual bonuses which would have been awarded for the fiscal year ended
February 29, 1996 pursuant to the annual cash bonus provisions of the Restated
Agreements.
21
<PAGE>
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
NAME AND POSITION AMOUNT
----------------- ----------
<S> <C>
David S. Loeb,
Chairman of the Board and President.............................. $2,256,870
Angelo R. Mozilo,
Vice Chairman of the Board and Executive Vice President.......... $2,256,870
Executive Officers as a Group..................................... $4,513,740
</TABLE>
Adoption of this proposal requires the affirmative vote of a majority of the
shares of Common Stock represented, in person or by proxy, and entitled to
vote on the matter at this Meeting.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS PROPOSAL.
PROPOSAL THREE
APPROVAL OF ANNUAL INCENTIVE PLAN
The Compensation Committee and the Board of Directors of the Company have
approved the Countrywide Credit Industries, Inc. Annual Incentive Plan,
subject to stockholder approval. If approved by stockholders, the Annual
Incentive Plan will be effective as of March 1, 1996.
The purposes of the Annual Incentive Plan are to promote the profitability
of the Company, provide officers with an opportunity to receive incentive
compensation depending upon that profitability and to attract, retain and
motivate such individuals. The Annual Incentive Plan has also been designed to
preserve the tax deductibility of payments made under the Annual Incentive
Plan. Under the Code, publicly traded corporations cannot deduct, for federal
income tax purposes, compensation paid to Covered Employees to the extent that
payments for any year to any such employee exceed $1 million, unless the
payments qualify for an exception to the deductibility limit. One such
exception is compensation paid under a performance-based compensation plan
that has been approved by stockholders. The Company intends to administer the
Annual Incentive Plan so that, if approved by stockholders, awards thereunder
will qualify as performance-based compensation under the Code and the
regulations published by the Internal Revenue Service thereunder.
All officers of the Company are currently eligible for awards under the
Annual Incentive Plan. It is expected that Mr. Kurland will be the only
participating executive officer for the fiscal year ending February 28, 1997.
The Annual Incentive Plan provides that within ninety days of the
commencement of each fiscal year, the Compensation Committee will (i) select
participants for the respective fiscal year from among the officers of the
Company and (ii) establish for each participant target awards, performance
goals and weightings with respect to one or more performance criteria. A
participant's target award, performance goal and weightings may not be
modified after the first 90 days of the fiscal year with respect to which they
apply. The performance goals may be established with respect to one or more of
the following performance criteria: Net Income; Return on Equity; Return on
Assets; Earnings Per Share; EBIT (i.e. Net Income before interest and taxes)
and Total Stockholder Return (each as defined in the Annual Incentive Plan).
The performance goals may be stated in either absolute terms or as compared to
one or more companies or indices.
For any fiscal year, the actual award payable to a participant will be
determined by the Compensation Committee based on (i) the participant's target
award, (ii) the extent to which the performance goals have been achieved and
(iii) the weightings established with respect to the applicable performance
criteria. The Annual
22
<PAGE>
Incentive Plan provides the Compensation Committee with discretion to provide
prorated awards to any individual who, due to hiring, promotion or demotion
after the commencement of a fiscal year, the Compensation Committee determines
should be eligible to participate or should cease to be eligible to
participate in the Annual Incentive Plan for such fiscal year.
The Annual Incentive Plan provides the Compensation Committee with
discretion to reduce the amount otherwise payable under an award under the
Annual Incentive Plan to any participant. In no event, however, will the
amount paid under the Annual Incentive Plan to a participant for any fiscal
year exceed $2 million. All awards will be paid in cash as soon as practicable
after the end of the fiscal year unless deferred, to the extent permitted by
the Compensation Committee. In general, the Annual Incentive Plan requires a
participant to be employed by the Company on the last day of a fiscal year to
receive an award in respect of that year. However, the Annual Incentive Plan
provides that if a participant's employment with the Company terminates due to
death or Disability, the participant or his or her beneficiary will be paid a
prorated award for the fiscal year in which the termination occurs. If a
participant's employment with the Company is terminated for Cause (as defined
in the Annual Incentive Plan) following the end of a fiscal year, the
participant forfeits the right to an award in respect of such fiscal year and
all other rights under the Annual Incentive Plan.
The Annual Incentive Plan will be administered by the Compensation
Committee, which will have sole authority to make rules and regulations for
the administration of the Annual Incentive Plan and whose interpretations and
decisions will be final and binding. The Compensation Committee will also have
authority to terminate or amend the Annual Incentive Plan provided that no
such action will adversely affect the rights of participants.
Awards under the Annual Incentive Plan may not be assigned or transferred by
a participant other than by will or by laws of descent and distribution; and
during his or her lifetime, awards will be payable solely to such participant.
The Annual Incentive Plan is unfunded and does not create any right in
participants to continued employment with the Company.
On May 6, 1996, the Compensation Committee adopted performance goals and
weightings for the fiscal year ending February 28, 1997 and established a
target award for Mr. Kurland. If the Company's stockholders do not approve the
Annual Incentive Plan, payments that would have been made pursuant to the
Compensation Committee's action will not be made under the Annual Incentive
Plan.
The amount of annual incentive compensation to be paid in the future to the
Company's current or future officers under the Annual Incentive Plan cannot be
determined at this time, since actual amounts will depend on who participates
in the Annual Incentive Plan, on actual performance measured against the
attainment of pre-established performance goals and on the Compensation
Committee's discretion to reduce such amounts. Had this proposal been in
effect for the fiscal year that ended February 29, 1996, and had Mr. Kurland
been a participant, the award payable for fiscal 1996 performance under the
formula established for fiscal 1997 would have been $627,412, unless reduced
under the Compensation Committee's discretionary authority provided for in the
Annual Incentive Plan.
Adoption of this proposal requires the affirmative vote of a majority of the
shares of Common Stock represented, in person or by proxy, and entitled to
vote on the matter at this Meeting.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS PROPOSAL.
23
<PAGE>
PROPOSAL FOUR
APPROVAL OF THE AMENDED AND RESTATED
COUNTRYWIDE CREDIT INDUSTRIES 1993 STOCK OPTION PLAN
1993 STOCK OPTION PLAN--GENERAL
On April 8, 1993, the Company's Board of Directors approved the Countrywide
Credit Industries, Inc. 1993 Stock Option Plan (the "1993 Stock Option Plan"),
which was approved by stockholders on June 30, 1993. The purpose of the 1993
Stock Option Plan is to strengthen the Company by providing incentives in the
form of options to acquire Common Stock to directors and key employees of the
Company to encourage them to devote their abilities and industry to the
success of the Company's business enterprise.
PROPOSED AMENDMENTS
On March 26, 1996 and May 7, 1996, the Board approved, subject to approval
by stockholders at the Meeting, amendments to the 1993 Stock Option Plan
which, among other things, increase by 6,000,000 the number of shares of
Common Stock which may from time to time be made the subject of options
thereunder and establish that the maximum number of shares of Common Stock
with respect to which options may be granted to any individual from and after
March 26, 1996 would be 3,000,000. If the amendments to the 1993 Stock Option
Plan are approved, the maximum number of shares of Common Stock which may be
the subject of options thereunder will be increased to 10,500,000. The Board
of Directors also approved other amendments to the 1993 Stock Option Plan,
including the circumstances under which a "change in control," which
accelerates the vesting of options, occurs. The amendments to the 1993 Stock
Option Plan are incorporated in the Amended and Restated 1993 Stock Option
Plan being submitted for stockholder approval at the Meeting. As used in this
Section, the term 1993 Stock Option Plan refers to the plan as in effect on
the date hereof and, where the context requires, to the Amended and Restated
1993 Stock Option Plan.
The employment agreements of Mr. Loeb and Mr. Mozilo were amended and
restated on March 26, 1996, subject to stockholder approval of the Amended and
Restated 1993 Stock Option Plan and the annual cash bonus provisions of such
agreements (see "Proposal Two"). Pursuant to the Restated Agreements, each of
Messrs. Loeb and Mozilo would be granted pursuant to the 1993 Stock Option
Plan, on the first business day following the Meeting, options to acquire
1,000,000 shares of the Company's common stock. In the absence of stockholder
approval of both this Proposal and Proposal Two, the Restated Agreements will
not take effect and the Current Agreements of Messrs. Loeb and Mozilo will
remain in effect. See "Executive Compensation--Employment Agreements--David S.
Loeb and Angelo R. Mozilo."
One of the Company's principal methods to attract and retain key employees
is the grant of stock options pursuant to the 1993 Stock Option Plan. The
Company believes that it is in the best interests of the Company to increase
the maximum number of shares that may be made subject to options under the
1993 Stock Option Plan in order to (i) continue to attract and retain key
employees and (ii) provide additional incentive and reward opportunities to
current employees to encourage them to enhance the profitability of the
Company. As of March 31, 1996, 1,389,730 shares of common stock were available
for the grant of new options under the 1993 Stock Option Plan. If the
amendments to the 1993 Stock Option Plan are approved, an additional 6,000,000
shares of Common Stock would be made available for options thereunder.
The principal provisions of the 1993 Stock Option Plan, as proposed to be
amended, are summarized below.
24
<PAGE>
DESCRIPTION OF THE AMENDED AND RESTATED 1993 STOCK OPTION PLAN
Term and Shares Available
The 1993 Stock Option Plan will be in effect until April 7, 2003, and no
options may be granted under the plan after that date. A maximum of 10,500,000
shares of Common Stock may be issued under the 1993 Stock Option Plan, subject
to adjustment in the event of a Change in Capitalization (as defined therein).
A maximum of 3,000,000 shares of Common Stock may be the subject of options
granted to any one person from and after March 26, 1996. Shares allocable to
an expired, canceled or otherwise terminated option may be made the subject of
a subsequently granted option.
Awards
The 1993 Stock Option Plan provides for the granting of stock options to key
employees, including key employees who are also directors ("Employee
Options"), and the granting of stock options to nonemployee directors of the
Company ("Director Options"). Employee Options may either be incentive stock
options ("ISOs") which meet the requirements of Section 422 of the Code or
nonqualified stock options ("NSOs"). All Director Options will be NSOs. As of
May 24, 1996, approximately 2,300 employees and all four nonemployee directors
are eligible to participate in the 1993 Stock Option Plan.
Administration
The 1993 Stock Option Plan will be administered by a committee (the
"Committee") composed of two or more directors appointed by the Board, each of
whom is disinterested within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and an
"outside director" within the meaning of Section 162(m) of the Code. The
Committee will have full authority to administer and interpret the provisions
of the 1993 Stock Option Plan; to determine when and to whom Employee Options
will be granted; whether such options will be ISOs or NSOs; and to prescribe
the terms and conditions of the Employee Options, subject to the provisions of
the 1993 Stock Option Plan. The Compensation Committee will perform the
functions of the Committee under the 1993 Stock Option Plan.
Terms and Conditions of Options
The exercise price for Employee Options will be set by the Committee and
shall, in no event, be less than the fair market value of the Common Stock on
the date the option is granted. In general, Employee Options are exercisable
at such time or times and in such installments as determined by the Committee.
Except in the event of a Change in Control, Employee Options are not
exercisable until at least one year from the date of grant. Employee Options
terminate no later than ten years after the date of grant. The Committee may,
in its discretion, modify outstanding Employee Options or accept the surrender
of outstanding Employee Options (to the extent not exercised) and grant new
options in substitution for them; provided, however, that no modification
shall adversely affect the rights or obligations under the Employee Option
without the optionee's consent.
The 1993 Stock Option Plan will continue to provide that each nonemployee
director of the Company will be granted a Director Option on the first
business day in June of each year that the 1993 Stock Option Plan is in effect
(except that Edwin Heller's 1996 grant will be made on October 15, 1996). The
number of shares of Common Stock subject to each Director Option will be equal
to the lesser of (i) 7,500 multiplied by a fraction, the numerator of which is
the Company's earnings per share on a fully diluted basis for the fiscal year
ended immediately before the date of grant of the Director Option (the "EPS
Numerator Amount"), and the
25
<PAGE>
denominator of which is $.68 or (ii) 7,500 multiplied by a fraction, the
numerator of which is the EPS Numerator Amount and the denominator of which is
the earnings per share on a fully diluted basis for the fiscal year
immediately preceding the fiscal year in respect of which the EPS Numerator
Amount is determined. The number 7,500 and the $.68 amount will be subject to
adjustment if there is a Change in Capitalization. Director Options will be
exercisable in whole or in part at any time after one year following the date
the option is granted. The per share exercise price for a Director Option will
be equal to the fair market value of a share of Common Stock on the date the
Director Option is granted. Director Options will terminate ten years from the
date granted.
Unless otherwise provided in the agreement evidencing the grant of an
option, options granted under the 1993 Stock Option Plan will not be
transferable (except under the laws of descent and distribution) and, in
general, will lapse three months after the termination of the optionee's
status as a director or employee, as applicable, of the Company and its
subsidiaries, except that special provisions apply in the event of death,
permanent disability of the director or employee or termination for Cause (as
defined in the 1993 Stock Option Plan). Upon the exercise of an option granted
under the 1993 Stock Option Plan, the purchase price must be paid in full by
any one or a combination of the following methods: (i) cash, (ii) transfer of
shares of Common Stock or (iii) execution of a promissory note and pledge
agreement pursuant to the Company's Stock Option Financing Plan (or any
successor or additional financing plan). Options may also be exercised through
a registered broker-dealer pursuant to cashless exercise procedures
established by the Committee.
In the event that a Change in Control (as defined in the 1993 Stock Option
Plan) occurs, all options will become immediately and fully exercisable and an
optionee may, during the 60-day period following the Change in Control,
surrender for cancellation any option (or portion thereof) for a cash payment
(the "Cash Payment") in respect of each share of Common Stock covered by the
option or portion thereof surrendered, equal to the excess, if any, of (x)(A)
in the case of a NSO, the greater of (1) the fair market value of share of
Common Stock on the date preceding the date of surrender or (2) the Adjusted
Fair Market Value (as defined in the 1993 Stock Option Plan) of a share of
Common Stock or (B) in the case of an ISO, the fair market value of a share of
Common Stock on the date preceding the date of surrender, over (y) the per
share exercise price for such shares under the option; provided, however, that
in the case of an option granted within six months prior to the Change in
Control to any optionee who may be subject to liability under Section 16(b) of
the Exchange Act, such optionee shall be entitled to surrender for
cancellation his or her option during the 60-day period commencing upon the
expiration of six months from the date of grant of any such option. A Change
in Control generally means the occurrence of any of the following: (i) the
acquisition (other than directly from the Company) of 25% or more of the
outstanding Common Stock or the combined voting power of the Company's then
outstanding voting securities ("Voting Securities"); provided, however, that
any such acquisition by the Company, any of its subsidiaries, an employee
benefit plan maintained by either the Company or any of its subsidiaries, or
by any person in connection with a Non-Control Transaction (as defined below)
shall not constitute a Change in Control; (ii) the individuals who as of March
27, 1996 are members of the Board (the "Incumbent Board") cease for any reason
to constitute at least two-thirds of the members of the Board; provided,
however, that members of the Board whose election is approved by at least two-
thirds of the Incumbent Board shall constitute members of the Incumbent Board;
provided, further, however, that no individual who becomes a director as the
result of an election or proxy contest shall constitute a member of the
Incumbent Board; or (iii) the consummation of (A) a merger, consolidation or
reorganization of the Company unless after such merger, consolidation or
reorganization (1) the Company's stockholders immediately prior to the merger,
consolidation or reorganization own, directly or indirectly, 70% or more of
the voting securities of the surviving entity, (2) the individuals who were
members of the Incumbent Board immediately prior to such merger, consolidation
or reorganization constitute at least two-thirds of the board of directors of
the surviving entity and (3) no person or entity (other than the Company, any
of its subsidiaries, an employee benefit plan maintained by either the Company
or any of its subsidiaries, or any
26
<PAGE>
prior owner of 25% or more of the outstanding Common Stock or Voting
Securities) owns, directly or indirectly, 25% or more of the outstanding
voting securities of the surviving entity, (B) a complete liquidation or
dissolution of the Company or (C) the sale of all or substantially all of the
Company's assets.
The 1993 Stock Option Plan provides that, subject to the provisions
described in the immediately preceding paragraph, in the event of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation of
the Company (a "Transaction"), the 1993 Stock Option Plan and the options
issued thereunder will continue in effect in accordance with their respective
terms and each optionee shall be entitled to receive in respect of each share
subject to an outstanding option, upon exercise of such option, the same
number and kind of stock, securities or other property that each stockholder
was entitled to receive in the Transaction in respect of a share of Common
Stock.
The 1993 Stock Option Plan provides that any issuance of stock is subject to
the optionee having satisfied all applicable tax and other withholding
requirements and further provides that an optionee may elect, subject to the
consent of the Commitee, to satisfy such withholding requirements by the
surrender of shares (valued at their then fair market value) that would
otherwise be issued upon exercise of the option.
Termination or Amendment
The Board of Directors is authorized to terminate or amend the 1993 Stock
Option Plan at any time, provided that no amendment shall be made which would
impair, without the consent of the optionee, any option previously granted
under the 1993 Stock Option Plan or would deprive any optionee of any shares
which he or she may have acquired through or as a result of the 1993 Stock
Option Plan; and provided further, that, to the extent necessary under Section
16(b) of the Exchange Act and the rules and regulations promulgated thereunder
or other applicable law, no amendment shall be effective unless approved by
the stockholders of the Company in accordance with applicable law and
regulations at a meeting held within twelve months after the date of the
adoption of such amendment. Additionally, the provisions of the 1993 Stock
Option Plan relating to grants of options to nonemployee directors shall not
be amended more than once every six months, other than to comport with changes
in the Code or the rules and regulations thereunder.
Miscellaneous
On May 24, 1996, the closing price of the Common Stock as reported on the
New York Stock Exchange was $23.625.
FEDERAL INCOME TAX CONSEQUENCES
In general, an optionee will not recognize taxable income upon the grant or
exercise of an ISO, and the Company and its subsidiaries will not be entitled
to any business expense deduction with respect to the grant or exercise of an
ISO. (Upon the exercise of an ISO, however, the excess of the fair market
value on the date of exercise of the shares received over the exercise price
of the shares will be treated as an adjustment to alternative minimum taxable
income.) In order for the exercise of an ISO to qualify for the foregoing tax
treatment, the optionee generally must be an employee of the Company or a
subsidiary (within the meaning of Section 422 of the Code) from the date the
ISO is granted through the date three months before the date of exercise (one
year preceding the date of exercise in the case of an optionee who is
terminated due to disability).
If the optionee has held the shares acquired upon exercise of an ISO for at
least two years after the date of grant and for at least one year after the
date of exercise, upon disposition of the shares by the optionee, the
difference, if any, between the sales price of the shares and the exercise
price of the option will be treated as long-term capital gain or loss. If the
optionee does not satisfy these holding period requirements, the optionee
27
<PAGE>
will recognize ordinary income at the time of the disposition of the shares,
generally in an amount equal to the excess of the fair market value of the
shares at the time the option was exercised over the exercise price of the
option. The balance of the gain realized, if any, will be long-term or short-
term capital gain, depending upon whether or not the shares were sold more
than one year after the option was exercised. If the optionee sells the shares
prior to the satisfaction of the holding period requirements but at a price
below the fair market value of the shares at the time the option was
exercised, the amount of ordinary income will be limited to the amount
realized on the sale over the exercise price of the option. If the Company or
its subsidiaries satisfies applicable reporting requirements or the optionee
includes such amount in income, the Company or its subsidiaries will be
allowed a business expense deduction to the extent the optionee recognizes
ordinary income.
In general, an optionee to whom a NSO is granted will recognize no income at
the time of the grant of the option. Upon exercise of a NSO, an optionee will
recognize ordinary income in an amount equal to the excess of the fair market
value of the shares on the date of exercise over the exercise price of the
option (special rules may apply in the case of an optionee who is subject to
Section 16(b) of the Exchange Act). If the Company or its subsidiaries
satisfies applicable reporting requirements or the optionee includes such
amount in income, the Company or its subsidiaries will be entitled to a
business expense deduction in the same amount and at the same time as the
optionee recognizes ordinary income.
In general, upon surrender of an option for a Cash Payment, the optionee
will recognize ordinary income in an amount equal to the Cash Payment and the
Company will be entitled to a business expense deduction in the same amount.
Under certain circumstances, the acceleration of the exercisability of
options granted under the 1993 Stock Option Plan or the making of a Cash
Payment in connection with a Change in Control of the Company might be deemed
an "excess parachute payment" for purposes of the golden parachute tax
provisions of Section 280G of the Code. To the extent it is so considered, the
optionee may be subject to a 20% excise tax and the Company may be denied a
tax deduction.
NEW PLAN BENEFITS
Under the terms of the 1993 Stock Option Plan, the Committee has full
authority to determine when and to whom Employee Options will be granted.
Grants of Director Options under the 1993 Stock Option Plan are determined by
a formula based on the Company's earnings per share. If stockholders approve
the 1993 Stock Option Plan, as it is proposed to be amended, and Proposal Two,
relating to the annual cash bonus arrangements of Messrs. Loeb and Mozilo,
each of Messrs. Loeb and Mozilo will be granted pursuant to the 1993 Stock
Option Plan, on the first business day following the Meeting, options to
acquire 1,000,000 shares of Common Stock. If stockholders approve the 1993
Stock Option Plan, as it is proposed to be amended, and Proposal Three,
relating to the Company's Annual Incentive Plan, Mr. Kurland will be entitled
to a grant of options to acquire at least 75,000 shares of Common Stock in
each of fiscal years 1997, 1998 and 1999. In the discretion of the
Compensation Committee, Mr. Kurland may receive for each of such years annual
option grants to acquire as many as 175,000 shares. The options granted to
Messrs. Loeb, Mozilo and Kurland will have a term of ten years and a per share
exercise price equal to the fair market value of a share of Common Stock on
the grant date and vest in three equal annual installments on each of the
first three anniversaries of the date of grant. See "Executive Compensation--
Employment Arrangements." Other than as provided in the table below, awards
under the 1993 Stock Option Plan are indeterminable.
28
<PAGE>
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
1993 STOCK OPTION PLAN
NUMBER OF SHARES
NAME AND POSITION UNDERLYING OPTIONS
----------------- ----------------------
<S> <C>
David S. Loeb
Chairman of the Board and President.............. 1,000,000
Angelo R. Mozilo
Vice Chairman of the Board and Executive Vice
President........................................ 1,000,000
Stanford L. Kurland
Senior Managing Director--Chief Financial Officer
and Chief Operating Officer...................... 225,000-525,000
</TABLE>
Adoption of this proposal requires the affirmative vote of a majority of the
shares of Common Stock represented, in person or by proxy, and entitled to
vote on the matter at this Meeting.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS PROPOSAL.
PROPOSAL FIVE
RATIFYING THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board has selected the accounting firm of Grant Thornton LLP ("Grant
Thornton") to audit the Company's financial statements for, and otherwise act
as the Company's independent certified public accountants with respect to, the
fiscal year ending February 28, 1997. Grant Thornton has continuously acted as
independent certified public accountants for the Company in respect of its
fiscal years commencing with the fiscal year ended February 28, 1974. In
accordance with the Board's resolution, its selection of Grant Thornton for
the current fiscal year is being presented to stockholders for ratification at
the Meeting. The affirmative vote of a majority of the shares of Common Stock
represented, in person or by proxy, and entitled to vote at the Meeting will
constitute such ratification. The Company has been advised that neither Grant
Thornton nor any of its partners has any direct financial interest or any
material indirect financial interest in the Company or any of its
subsidiaries, nor has had any connection during the past three years with the
Company or any of its subsidiaries in the capacity of promoter, underwriter,
voting trustee, director, officer or employee.
A representative of Grant Thornton will be present at the Meeting. He will
have an opportunity to make a statement, if he wishes to do so, and will be
available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS PROPOSAL.
SECTION 16 DISCLOSURE
Section 16 of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers to report their ownership of and
transactions in the Company's Common Stock to the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange. Copies of these
reports are also required to be supplied to the Company. Specific dates for
filing these reports have been established by the SEC, and the Company is
required to report in this Proxy Statement any failure of its directors and
executive officers to file by the relevant due date any of these reports
during the fiscal year ended February 29, 1996. Based solely on its review of
the copies of the reports received by it, the Company believes that all such
filing requirements were satisfied.
29
<PAGE>
ANNUAL REPORT AND FORM 10-K
The Annual Report to Stockholders, containing the consolidated financial
statements of the Company for the fiscal year ended February 29, 1996,
accompanies this Proxy Statement.
STOCKHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 29, 1996, FILED WITH THE SEC,
INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, WITHOUT THE
ACCOMPANYING EXHIBITS, BY WRITING TO INVESTOR RELATIONS, COUNTRYWIDE CREDIT
INDUSTRIES, INC., 155 NORTH LAKE AVENUE, POST OFFICE BOX 7137, PASADENA,
CALIFORNIA 91109-7137. A LIST OF EXHIBITS IS INCLUDED IN THE FORM 10-K, AND
EXHIBITS ARE AVAILABLE FROM THE COMPANY UPON THE PAYMENT TO THE COMPANY OF THE
COSTS OF FURNISHING THEM.
STOCKHOLDER PROPOSALS
Any proposal that a stockholder wishes to present for consideration at the
1997 Annual Meeting of Stockholders must be received by the Company no later
than January 31, 1997 for inclusion in the 1997 Notice of Annual Meeting,
Proxy Statement and Proxy. Proposals should be directed to the Secretary of
the Company. Stockholders wishing to bring proposals before an annual meeting
must also comply with Section 13 of the Company's Bylaws, which requires
certain information to be provided in connection with the submission of
stockholder proposals and sets forth certain timing requirements with respect
thereto.
OTHER MATTERS
The Board knows of no matters other than those listed in the attached Notice
of Annual Meeting which are likely to be brought before the Meeting. However,
if any other matter properly comes before the Meeting, the persons named on
the enclosed proxy card will vote the proxy in accordance with their best
judgment on such matter.
By Order of the Board of Directors
/s/ SANDOR E. SAMUELS
Sandor E. Samuels
Secretary
May 31, 1996
30
<PAGE>
COUNTRYWIDE CREDIT INDUSTRIES, INC.
ANNUAL INCENTIVE PLAN
SECTION 1: PURPOSES
The purposes of the Plan are to promote the success and growth of the Company,
thereby enhancing shareholder value; to provide certain Executive Officers with
an opportunity to receive incentive compensation dependent upon that success and
growth; and to attract, retain and motivate such individuals.
SECTION 2: DEFINITIONS
2.1 "AWARD" means an incentive award made pursuant to the Plan.
2.2 "BENEFICIARY" mean the person(s) designated by the Participant, in
writing on a form provided by the Committee, to receive payments under
the Plan in the event of his death while a Participant or, in the absence
of such designation, the Participant's estate.
2.3 "BOARD OF DIRECTORS" means the Board of Directors of the Company.
2.4 "CAUSE" means (i) a felony conviction of the Participant; (ii) the
commission by the Participant of an act of fraud or embezzlement against
the Company; (iii) the Participant's willful misconduct or gross
negligence materially detrimental to the Company; (iv) the Participant's
wrongful dissemination or use of confidential or proprietary information;
or (vi) the intentional and habitual neglect by the Participant of his
duties to the Company.
2.5 "CODE" means the Internal Revenue Code of 1986, as amended.
<PAGE>
2.6 "COMMITTEE" means the Compensation Committee of the Board of Directors,
which shall consist of two or more persons, each of whom is an "outside
director" within the meaning of Section 162(m) of the Code.
2.7 "COMPANY" means Countrywide Credit Industries, Inc. and its successors
and shall include any subsidiaries of the Company, except where the
context indicates otherwise.
2.8 "DISABILITY" means (i) total disability within the meaning of the
Company's long-term disability plan as in effect from time to time or
(ii) if there is no such plan at the applicable time, physical or mental
incapacity as determined solely by the Committee.
2.9 "EMPLOYEE" means an employee of the Company.
2.10 "EXECUTIVE OFFICER" means the Chief Executive Officer of the Company and
any other Employee who is an officer of the Company.
2.11 "PARTICIPANT" means an Executive Officer designated from time to time by
the Committee pursuant to Section 3 to participate in the Plan.
2.12 "PERFORMANCE CRITERIA" means one or more of the criteria set forth below
selected by the Committee to measure performance for a Plan Year:
(i) Net Income: The net after-tax income of the Company or a business
unit from continuing operations after adjustment to omit the effects
of any extraordinary items and the cumulative effects of changes in
accounting principles.
(ii) Return on Equity: Net Income of the company or of a business unit
divided by the average of the Company's consolidated shareholder
equity as of the beginning and end of the Plan Year.
<PAGE>
(iii) Return on Assets: Net Income divided by the average of the
Company's or a business unit's total or net assets as of the
beginning and end of the Plan Year.
(iv) Earnings Per Share (either primary or fully diluted, or the
equivalent thereof) as reported in the Company's annual report to
shareholders, adjusted to omit the effects of any discontinued
operations, extraordinary items and the cumulative effects of
changes in accounting principles.
(v) EBIT: Net Income before any charges, expenses or accruals for
interest or taxes.
(vi) Total Shareholder Return: The total return to the Company's
shareholders, measured by stock price appreciation and dividends
paid.
Performance Criteria shall be determined in accordance with generally
accepted accounting principles as consistently applied by the Company.
2.13 "PERFORMANCE GOAL" means the level of performance, either in absolute
terms or as compared to one or more other companies or indices,
established as the Performance Goal with respect to a Performance
Criteria or indices.
2.14 "PLAN" means the Countrywide Credit Industries, Inc. Annual Incentive
Plan.
2.15 "PLAN YEAR" means the fiscal year of the Company.
2.16 "TARGET AWARD" means an amount established by the Committee as a
Participant's Target Award upon attainment of a Performance Goal.
<PAGE>
SECTION 3: PARTICIPATION
3.1 Participants for any Plan Year shall be selected by the Committee from
among the Executive Officers within ninety days of the commencement of a
Plan Year; provided, however that if due to hiring, promotion, or
demotion, the Committee determines thereafter that an Employee should be
eligible to participate in the Plan for a Plan Year, or that a
Participant should cease to be so eligible, in either case, after the
commencement of the Plan Year, then the Committee shall have the
discretion to provide that such individual shall be eligible for a
prorated Award, as and to the extent it may determine. The selection of
an Executive Officer as a Participant for a Plan Year shall not entitle
such individual to be selected as a Participant with respect to any other
Plan Year.
SECTION 4: AWARDS
4.1. TARGET AWARDS AND PERFORMANCE GOALS. Within ninety days of the
commencement of a Plan Year, the Committee shall establish for each
Participant for such year Target Awards and Performance Goals and
weightings with respect to one or more Performance Criteria. Once
established for a Plan Year, a Participant's Target Award, Performance
Goals and weightings may not be amended or otherwise modified after such
ninetieth day in a manner which could increase the amount of an Award.
Notwithstanding the foregoing, Target Awards, Performance Criteria,
Performance Goals and weightings may vary from Plan Year to Plan Year and
Participant to Participant.
4.2 DETERMINATION AND PAYMENT OF AWARDS. The actual Award payable to a
Participant will be determined by the Committee based on (i) the
Participant's
<PAGE>
Target Award (ii) the extent to which the Performance Goals have been
achieved, as certified in writing by the Committee (iii) and the
weighting established with respect to the applicable Performance
Criteria. Notwithstanding the foregoing, the Committee will have the
discretion to reduce the amount of the Award that would otherwise be
payable to a Participant. Awards will be paid in a lump sum cash payment
as soon as practicable after the close of the Plan Year for which they
are made. Except as otherwise provided in Section 5, no Award will be
payable to any Participant who is not an Employee on the last day of such
Plan Year. The Committee may, subject to such terms and conditions and
within such limits as it may from time to time establish, permit one or
more Participants to defer the receipt of amounts payable under the Plan.
4.3. MAXIMUM AWARDS. The maximum Award payable to a Participant for any Plan
Year is two million dollars ($2,000,000).
SECTION 5: TERMINATION OF EMPLOYMENT
5.1 DEATH OR DISABILITY. If a Participant's employment with the Company
terminates due to death or Disability during a Plan Year, the Participant
or his Beneficiary, as the case may be, will be paid a prorated Award in
cash for such year as soon as practicable after such Plan Year.
5.2 CAUSE. If a Participant's employment with the Company is terminated for
Cause following the end of a Plan year, his right to the payment of an
Award in respect of that Plan year and all other rights under this Plan
will be forfeited, and no amount will be paid or payable hereunder to or
in respect of such Participant after the date of his termination of
employment.
<PAGE>
SECTION 6: ADMINISTRATION
6.1. IN GENERAL. Except as otherwise provided in the Plan, the Committee will
have full and complete authority, in its sole and absolute discretion,
(i) to exercise all of the powers granted to it under the Plan, (ii) to
construe, interpret and implement the Plan and any related document,
(iii) to prescribe, amend and rescind rules relating to the Plan, (iv) to
make all determinations necessary or advisable in administering the Plan,
and (v) to correct any defect, supply any omission and reconcile any
inconsistency in the Plan.
6.2 DETERMINATIONS. The actions and determinations of the Committee or its
designee on all matters relating to the Plan and any Awards will be final
and conclusive. Such determinations need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive,
Awards under the Plan, whether or not such persons are similarly
situated.
6.3 APPOINTMENT OF EXPERTS. The Committee may appoint such accountants,
counsel, and other experts as it deems necessary or desirable in
connection with the administration of the Plan.
6.4 BOOKS AND RECORDS. The Committee shall keep a record of all their
proceedings and actions and shall maintain all such books of account,
records and other data as shall be necessary for the proper
administration of the Plan.
6.5 PAYMENT OF EXPENSES. The Company shall pay all expenses of administering
the Plan, including, but not limited to, the payment of professional and
expert fees.
6.6 CODE SECTION 162(M). It is the intent of the Company that this Plan and
Awards hereunder satisfy, and be interpreted in a manner that satisfies,
the applicable requirements of Code Section 162(m) so that the Company's
tax
<PAGE>
deduction for remuneration in respect of such Awards is not disallowed in
whole or in part by the operation of such Code Section. If any provision
of this Plan or of any Award would otherwise frustrate or conflict with
this intent, that provision to the extent possible shall be interpreted
and deemed amended so as to avoid such conflict. To the extent of any
remaining irreconcilable conflict with such intent, such provision shall
be deemed void.
SECTION 7: MISCELLANEOUS
7.1. NONASSIGNABILITY. No Award will be assignable or transferable (including
pursuant to a pledge or security interest) other than by will or by laws
of descent and distribution.
7.2 WITHHOLDING TAXES. Whenever payments under the Plan are to be made or
deferred, the Company will withhold therefrom, or from any other amounts
payable to or in respect of the Participant, an amount sufficient to
satisfy any applicable governmental withholding tax requirements related
thereto.
7.3 AMENDMENT OR TERMINATION OF THE PLAN. The Plan may be amended or
terminated by the Committee in any respect except that no amendment or
termination may be made after the date on which an Executive Officer is
selected as a Participant for a Plan Year which would adversely affect
the rights of such Participant with respect to such Plan Year.
7.4 OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan will be deemed in
any way to limit, restrict or require the Company from making or to make
any award or payment to any person under any other plan, arrangement or
understanding, whether now existing or hereafter in effect.
7.5 PAYMENTS TO OTHER PERSONS. If payments are legally required to be made to
any person other than the person to whom any amount is payable under the
<PAGE>
Plan, such payments will be made accordingly. Any such payment will be a
complete discharge of the liability of the Company under the Plan.
7.6 UNFUNDED PLAN. Nothing in this Plan will require the Company to purchase
assets or place assets in a trust or other entity to which contributions
are made or otherwise to segregate any assets for the purpose of
satisfying any obligations under the Plan. Participants will have no
rights under the plan other than as unsecured general creditors of the
Company.
7.7 LIMITS OF LIABILITY. Neither the Company, the Committee nor any other
person participating in any determination of any question under the Plan,
or in the interpretation, administration or application of the Plan, will
have any liability to any party for any action taken or not taken in good
faith under the Plan.
7.8 NO RIGHT OF EMPLOYMENT. Nothing in this Plan will be construed as
creating any contract of employment or conferring upon any Employee or
Participant any right to continue in the employ or other service of the
Company or limit in any way the right of the Company to change such
person's compensation or other benefits or to terminate the employment or
other service of such person with or without Cause.
7.9 SECTION HEADINGS. The section headings contained herein are for
convenience only, and in the event of any conflict, the text of the Plan,
rather than the section headings, will control.
7.10 INVALIDITY. If any term or provision contained herein is to any extent
invalid or unenforceable, such term or provision will be reformed so that
it is valid, and such invalidity or unenforceability will not affect any
other provision or part hereof.
<PAGE>
7.11 APPLICABLE LAW. The Plan will be governed by the laws of the state of
California as determined without regard to the conflict of law principles
thereof.
7.12 EFFECTIVE DATE. Subject to the approval of the Company's shareholders,
the Plan shall be effective as of March 1, 1996.
<PAGE>
COUNTRYWIDE CREDIT INDUSTRIES, INC.
1993 STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF MARCH 27, 1996)
1. PURPOSE.
-------
The purpose of this Plan is to strengthen Countrywide Credit Industries,
Inc. by providing an incentive to its key employees and directors and thereby
encouraging them to devote their abilities and industry to the success of the
Company's business enterprise. It is intended that this purpose be achieved by
extending to key employees and directors of the Company and the Subsidiaries an
added long-term incentive for high levels of performance and unusual efforts
through the grant of options to purchase shares of the Company's common stock
under the amended and restated Countrywide Credit Industries, Inc. 1993 Stock
Option Plan.
2. DEFINITIONS.
-----------
For purposes of the Plan:
(a) "Adjusted Fair Market Value" means, in the event of a Change in
Control, the greater of (1) the highest price per Share paid to holders of the
Shares in any transaction (or series of transactions) constituting or resulting
in a Change in Control or (2) the highest Fair Market Value of a Share during
the ninety (90) day period ending on the date of a Change in Control.
(b) "Agreement" means the written agreement between the Company and an
Optionee evidencing the grant of an Option and setting forth the terms and
conditions thereof.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means (1) any act of (A) fraud or intentional
misrepresentation, or (B) embezzlement, misappropriation or conversion of assets
or opportunities of the Company or any direct or indirect majority-owned
subsidiary of the Company, or (2) willful violation of any law, rule or
regulation in connection with the performance of an Optionee's duties (other
than traffic violations or similar offenses).
(e) "Change in Capitalization" means any increase or reduction in the
number of Shares, or exchange of Shares for a different number or kind of shares
or other securities of the Company, by reason of a reclassification,
recapitalization, merger,
1
<PAGE>
consolidation, reorganization, stock dividend, stock split or reverse stock
split, combination or exchange of shares, or other similar event.
(f) "Change in Control" means the occurrence of any one of the following
events:
(1) An acquisition (other than directly from Employer) of any common
stock or other "Voting Securities" (as hereinafter defined) of
Employer by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty five percent
(25%) or more of the then outstanding shares of Employer's common
stock or the combined voting power of Employer's then outstanding
Voting Securities; provided, however, in determining whether a
-------- -------
Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter defined)
shall not constitute an acquisition which would cause a Change in
Control. For purposes of this Agreement, (A) "Voting Securities"
shall mean Employer's outstanding voting securities entitled to
vote generally in the election of directors and (B) a "Non-
Control Acquisition" shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) maintained by
(x) Employer or (y) any corporation or other Person of which a
majority of its voting power or its voting equity securities or
equity interest is owned, directly or indirectly, by Employer
(for purposes of this definition, a "Subsidiary"), (ii) Employer
or any of its Subsidiaries, or (iii) any Person in connection
with a "Non-Control Transaction" (as hereinafter defined);
(2) The individuals who as of March 27, 1996 are members of the Board
(the "Incumbent Board") cease for any reason to constitute at
least two-thirds of the members of the Board; provided, however,
-------- -------
that if the election, or nomination for election by Employer's
common stockholders, of any new director was approved by a vote
of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Agreement, be considered as a member
of the Incumbent Board; provided further, however, that no
---------------- -------
individual shall be considered a member of the Incumbent Board if
such individual initially assumed office as a result of either an
actual or threatened "Election Contest" (as described in Rule
14a-
2
<PAGE>
11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of
a Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or
(3) The consummation of:
(A) A merger, consolidation or reorganization involving
Employer, unless such merger, consolidation or
reorganization is a "Non-Control Transaction." A "Non-
Control Transaction" shall mean a merger, consolidation or
reorganization of Employer where:
(i) the stockholders of Employer, immediately before such
merger, consolidation or reorganization, own directly
or indirectly immediately following such merger,
consolidation or reorganization, at least seventy
percent (70%) of the combined voting power of the
outstanding Voting Securities of the corporation
resulting from such merger, consolidation or
reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership
of the Voting Securities immediately before such
merger, consolidation or reorganization;
(ii) the individuals who were members of the Incumbent
Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the
members of the board of directors of the Surviving
Corporation, or in the event that, immediately
following the consummation of such transaction, a
corporation beneficially owns, directly or indirectly,
a majority of the Voting Securities of the Surviving
Corporation, the board of directors of such
corporation; and
(iii) no Person other than (w) Employer, (x) any Subsidiary,
(y) any employee benefit plan (or any trust forming a
part thereof) maintained by Employer, the Surviving
Corporation, or any Subsidiary, or (z)
3
<PAGE>
any Person who, immediately prior to such merger,
consolidation or reorganization had Beneficial
Ownership of twenty five percent (25%) or more of the
then outstanding Voting Securities or common stock of
Employer, has Beneficial Ownership of twenty five
percent (25%) or more of the combined voting power of
the Surviving Corporation's then outstanding Voting
Securities or its common stock;
(B) A complete liquidation or dissolution of Employer; or
(C) The sale or other disposition of all or substantially all of
the assets of Employer to any Person (other than a transfer
to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding common stock
or Voting Securities as a result of the acquisition of common stock or Voting
Securities by Employer which, by reducing the number of shares of common stock
or Voting Securities then outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons; provided, however, that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of common stock or Voting Securities by Employer, and
after such share acquisition by Employer, the Subject Person becomes the
Beneficial Owner of any additional common stock or Voting Securities which
increases the percentage of the then outstanding common stock or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means a committee consisting of at least two (2) directors
appointed by the Board to administer the Plan and to perform the functions set
forth herein.
(i) "Company" means Countrywide Credit Industries, Inc.
(j) "Director Option" means an Option granted to a Nonemployee Director
pursuant to Section 5.
(k) "Disability" means a physical or mental infirmity which impairs the
Optionee's ability to perform substantially his or her duties for a period of
one hundred eighty (180) consecutive days.
4
<PAGE>
(l) "Disinterested Director" means a director of the Company who is
"disinterested" within the meaning of Rule 16b-3 under the Exchange Act.
(m) "Eligible Employee" means any officer or other key employee of the
Company or a Subsidiary designated by the Committee as eligible to receive
Options subject to the conditions set forth herein.
(n) "Employee Option" means an Option granted to an Eligible Employee
pursuant to Section 6.
(o) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(p) "Fair Market Value" on any date means the average of the high and low
sales prices of the Shares on such date on the principal national securities
exchange on which such Shares are listed or admitted to trading, or if such
Shares are not so listed or admitted to trading, the arithmetic mean of the per
Share closing bid price and per Share closing asked price on such date as quoted
on the National Association of Securities Dealers Automated Quotation System or
such other market in which such prices are regularly quoted, or, if there have
been no published bid or asked quotations with respect to Shares on such date,
the Fair Market Value shall be the value established by the Board in good faith
and in accordance with Section 422 of the Code.
(q) "Incentive Stock Option" means an Option satisfying the requirements of
Section 422 of the Code and designated by the Committee as an Incentive Stock
Option.
(r) "Nonemployee Director" means a director of the Company who is not an
employee of the Company or any Subsidiary.
(s) "Nonqualified Stock Option" means an Option which is not an Incentive
Stock Option.
(t) "Option" means an Employee Option, a Director Option, or either or both
of them.
(u) "Optionee" means a person to whom an Option has been granted under the
Plan.
(v) "Outside Director" means a director of the Company who is an "outside
director" within the meaning of Section 162(m) of the Code and the regulations
promulgated thereunder.
(w) "Parent" means any corporation which is a parent corporation (within
the meaning of Section 424(e) of the Code) with respect to the Company.
5
<PAGE>
(x) "Plan" means the Countrywide Credit Industries, Inc. 1993 Stock Option
Plan, as amended and restated effective March 27, 1996.
(y) "Shares" means the common stock, par value $.05 per share, of the
Company.
(z) "Subsidiary" means any corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) with respect to the Company.
(aa) "Successor Corporation" means a corporation, or a parent or subsidiary
thereof within the meaning of Section 424(a) of the Code, which issues or
assumes a stock option in a transaction to which Section 424(a) of the Code
applies.
(bb) "Ten-Percent Stockholder" means an Eligible Employee, who, at the time
an Incentive Stock Option is to be granted to him or her, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
or of a Parent or a Subsidiary.
3. ADMINISTRATION.
--------------
(a) The Plan shall be administered by the Committee, which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep minutes of its meetings. A quorum shall consist
of not less than two members of the Committee and a majority of a quorum may
authorize any action. Any decision or determination reduced to writing and
signed by a majority of all of the members shall be as fully effective as if
made by a majority vote at a meeting duly called and held. Each member of the
Committee shall be a Disinterested Director and an Outside Director. No member
of the Committee shall be liable for any action, failure to act, determination
or interpretation made in good faith with respect to this Plan or any
transaction hereunder, except for liability arising from his or her own willful
misfeasance, gross negligence or reckless disregard of his or her duties. The
Company hereby agrees to indemnify each member of the Committee for all costs
and expenses and, to the extent permitted by applicable law, any liability
incurred in connection with defending against, responding to, negotiation for
the settlement of or otherwise dealing with any claim, cause of action or
dispute of any kind arising in connection with any actions in administering this
Plan or in authorizing or denying authorization to any transaction hereunder.
(b) Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:
6
<PAGE>
(1) determine those Eligible Employees to whom Employee Options shall
be granted under the Plan and the number of Incentive Stock Options and/or
Nonqualified Stock Options to be granted to each Eligible Employee and to
prescribe the terms and conditions (which need not be identical) of each such
Employee Option, including the purchase price per Share subject to each Employee
Option, and make any amendment or modification to any Agreement consistent with
the terms of the Plan;
(2) to construe and interpret the Plan and the Options granted
hereunder and to establish, amend and revoke rules and regulations for the
administration of the Plan, including, but not limited to, correcting any defect
or supplying any omission, or reconciling any inconsistency in the Plan or in
any Agreement, in the manner and to the extent it shall deem necessary or
advisable so that the Plan complies with applicable law, including Rule 16b-3
under the Exchange Act and the Code to the extent applicable, and otherwise to
make the Plan fully effective. All decisions and determinations by the
Committee in the exercise of this power shall be final, binding and conclusive
upon the Company, its Subsidiaries, the Optionees and all other persons having
any interest therein;
(3) to determine the duration and purposes for leaves of absence which
may be granted to an Optionee on an individual basis without constituting a
termination of employment or service for purposes of the Plan;
(4) to exercise its discretion with respect to the powers and
rights granted to it as set forth in the Plan; and
(5) generally, to exercise such powers and to perform such acts as are
deemed necessary or advisable to promote the best interests of the Company with
respect to the Plan.
4. STOCK SUBJECT TO PROGRAM.
------------------------
(a) The maximum number of Shares that may be made the subject of Options
granted under the Plan is ten million five hundred thousand (10,500,000);
provided, however, that the maximum number of Shares that may be the subject of
- -------- -------
Options granted to any Eligible Employee from and after March 27, 1996 and
during the term of the Plan may not exceed three million (3,000,000). Upon a
Change in Capitalization the maximum number of Shares shall be adjusted in
number and kind pursuant to Section 8. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Shares or out of Shares
held in the Company's treasury, or partly out of each, such number of Shares as
shall be determined by the Board.
(b) Whenever any outstanding Option or portion thereof expires, is canceled
or is otherwise terminated for any reason (other than upon the surrender of the
Option
7
<PAGE>
pursuant to Section 7(e) hereof), the Shares allocable to the expired,
canceled or otherwise terminated Option or portion thereof may again be the
subject of Options granted hereunder.
5. OPTION GRANTS FOR NONEMPLOYEE DIRECTORS.
---------------------------------------
(a) Grant. Director Options shall be granted to each Nonemployee Director
-----
on the first business day of June of each year that the Plan is in effect. The
number of Shares and the purchase price therefor of each Director Option shall
be as provided in this Section 5 and such Options shall be evidenced by an
Agreement containing such other terms and conditions not inconsistent with the
provisions of this Plan as determined by the Board. Notwithstanding the
foregoing provisions of this Subsection (a), no Option shall be granted in any
year to a Nonemployee Director who makes a written election not to receive such
Option under the Plan, provided such election is filed with the Secretary of the
--------
Company at least one business day prior to the date such grant would otherwise
be made under the Plan; provided, further, that an election made pursuant to
-------- -------
this sentence shall remain effective until the next business day following the
date a written notice revoking such election is made and filed with the
Secretary of the Company. A Nonemployee Director who makes an election not to
receive an Option will not receive anything from the Company in lieu thereof.
(b) Number of Shares. Each Director Option granted shall be in respect of
a number of Shares equal to the lesser of (1) 7,500 multiplied by a fraction,
the numerator of which is the earnings per Share on a fully diluted basis of the
Company for the fiscal year of the Company ended immediately before the date of
grant of the Director Option (as reported in the audited Financial Statements
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission ("SEC"), but in no event less than zero) (the "EPS
Numerator Amount") and the denominator of which is $.68, or (2) 7,500 multiplied
by a fraction, the numerator of which is the EPS Numerator Amount and the
denominator of which is the earnings per share on a fully diluted basis of the
Company for the fiscal year immediately preceding the fiscal year in respect of
which the EPS Numerator Amount is determined as reported in the Company's Annual
Report on Form 10-K filed with the SEC. The number 7,500 and the $.68 amount
referred to in the previous sentence shall be equitably adjusted in the event of
a Change in Capitalization.
(c) Purchase Price. The purchase price for Shares under each Director
Option shall be equal to 100% of the Fair Market Value of a Share on the date
the Director Option is granted.
(d) Duration. Director Options shall be for a term of ten (10) years.
8
<PAGE>
(e) Vesting. Subject to Section 7(e) hereof, Director Options shall be
exercisable in whole or in part at any time after one year from the date of
grant of the Director Option.
(f) The provisions in this Section 5 shall not be amended more than once
every six months, other than to comport with changes in the Code or the rules
and regulations thereunder.
(g) Notwithstanding the foregoing, no Director Option will be granted to
any Nonemployee Director pursuant to this Section 5 on any day if such
Nonemployee Director is granted an option pursuant to Section 5 of the Company's
1991 Stock Option Plan on such day.
6. OPTION GRANTS FOR ELIGIBLE EMPLOYEES.
------------------------------------
(a) Subject to the provisions of the Plan and to Section 4(a) above, the
Committee shall have full and final authority to select those Eligible Employees
who will receive Employee Options, the terms and conditions of which shall be
set forth in an Agreement; provided, however, that no Eligible Employee shall
-------- -------
receive any Incentive Stock Options unless he or she is an employee of the
Company, a Parent or a Subsidiary at the time the Incentive Stock Option is
granted.
(b) Purchase Price. The purchase price or the manner in which the purchase
price is to be determined for Shares under each Employee Option shall be
determined by the Committee and set forth in the Agreement; provided, however,
-------- -------
that the purchase price per Share under each Employee Option shall not be less
than 100% of the Fair Market Value of a Share on the date the Employee Option is
granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).
(c) Duration. Employee Options granted hereunder shall be for such term as
the Committee shall determine, provided that no Employee Option shall be
exercisable after the expiration of ten (10) years from the date it is granted
(five (5) years in the case of an Incentive Stock Option granted to a Ten-
Percent Stockholder). The Committee may, subsequent to the granting of any
Employee Option, extend the term thereof but in no event shall the term as so
extended exceed the maximum term provided for in the preceding sentence.
(d) Vesting. Subject to Section 7(e) hereof, each Employee Option shall,
commencing not earlier than the first anniversary of the date of its grant,
become exercisable in such installments (which need not be equal) and at such
times as may be designated by the Committee and set forth in the Agreement. To
the extent not exercised, installments shall accumulate and be exercisable, in
whole or in part, at any time after becoming exercisable, but not later than the
date the Employee Option expires. The
9
<PAGE>
Committee may accelerate the exercisability of any Employee Option or portion
thereof at any time.
(e) Modification or Substitution. The Committee may, in its discretion,
modify outstanding Employee Options or accept the surrender of outstanding
Employee Options (to the extent not exercised) and grant new Options in
substitution for them. Notwithstanding the foregoing, no modification of an
Employee Option shall adversely alter or impair any rights or obligations under
the Employee Option without the Optionee's consent.
7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.
----------------------------------------------
(a) Non-transferability. Unless provided for to the contrary in the
Agreement, no Option granted hereunder shall be transferable by the Optionee to
whom granted otherwise than by will or the laws of descent and distribution, and
an Option may be exercised during the lifetime of such Optionee only by the
Optionee or his or her guardian or legal representative. The terms of such
Option shall be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
(b) Method of Exercise. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor and otherwise in accordance with
the Agreement pursuant to which the Option was granted. The purchase price for
any Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such exercise, by any one or a combination of the following: (1) cash, (2)
pursuant to the Company's Stock Option Financing Plan (approved by the Company's
shareholders at the Company's 1987 Annual Meeting) as amended from time to time
or any successor or additional financing plan approved by the Board, through the
execution of a promissory note and pledge agreement or (3) transferring Shares
to the Company. In addition, Options may be exercised through a registered
broker-dealer pursuant to such cashless exercise procedures (other than Share
withholding) which are, from time to time, deemed acceptable by the Committee.
Any Shares transferred to the Company as payment of the purchase price under an
Option shall be valued at their Fair Market Value on the day preceding the date
of exercise of such Option. If requested by the Committee, the Optionee shall
deliver the Agreement evidencing the Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued
upon exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
10
<PAGE>
(c) Rights of Optionees. No Optionee shall be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (1) the Option
shall have been exercised pursuant to the terms thereof, (2) the Company shall
have issued and delivered the Shares to the Optionee and (3) the Optionee's name
shall have been entered as a stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such Shares.
(d) Termination of Employment. Unless, in the case of an Employee Option,
otherwise provided in the Agreement evidencing the Employee Option, an Option
shall terminate upon or following an Optionee's termination of employment with
the Company and its Subsidiaries or service as a director of the Company and its
Subsidiaries as follows:
(1) if an Optionee's employment or service as a director terminates
for any reason other than death, Disability or Cause, the Optionee may at any
time within three (3) months after his or her termination of employment or
service as a director, exercise an Option to the extent, and only to the extent,
that the Option or portion thereof was exercisable on the date of termination;
(2) in the event the Optionee's employment or service as a director
terminates as a result of Disability, the Optionee may at any time within one
(1) year after such termination exercise such Option to the extent, and only to
the extent, the Option or portion thereof was exercisable at the date of such
termination;
(3) if an Optionee's employment or service as a director terminates
for Cause, the Option shall terminate immediately and no rights thereunder may
be exercised;
(4) if an Optionee dies while a director or an employee of the Company
or any Subsidiary or within three months after termination as described in
clause (1) of this Section 7(d) or within one (1) year after termination as a
result of Disability as described in clause (2) of this Section 7(d), the Option
may be exercised at any time within one (1) year after the Optionee's death by
the person or persons to whom such rights under the Option shall pass by will or
by the laws of descent and distribution; provided, however, that an Option may
-------- -------
be exercised to the extent, and only to the extent, that the Option or portion
thereof was exercisable on the date of death or earlier termination.
Notwithstanding the foregoing, (1) in no event may any Option be
exercised by anyone after the expiration of the term of the Option and (2) a
termination of service as a director shall not be deemed to occur so long as the
director continues to serve the Company as either a director or director
emeritus.
(e) Effect of Change in Control. Notwithstanding anything contained in the
Plan or an Agreement to the contrary, in the event of a Change in Control, (1)
all Options
11
<PAGE>
outstanding on the date of such Change in Control shall become immediately and
fully exercisable and (2) an Optionee shall be permitted to surrender for
cancellation within sixty (60) days after such Change in Control, any Option or
portion of an Option to the extent not yet exercised and the Optionee will be
entitled to receive a cash payment in an amount equal to the excess, if any, of
(x) (A) in the case of a Nonqualified Stock Option, the greater of (i) the Fair
Market Value, on the date preceding the date of surrender, of the Shares subject
to the Option or portion thereof surrendered or (ii) the Adjusted Fair Market
Value of the Shares subject to the Option or portion thereof surrendered or (B)
in the case of an Incentive Stock Option, the Fair Market Value, on the date
preceding the date of surrender, of the Shares subject to the Option or portion
thereof surrendered, over (y) the aggregate purchase price for such Shares under
the Option or portion thereof surrendered; provided, however, that in the case
of an Option granted within six (6) months prior to the Change in Control to any
Optionee who may be subject to liability under Section 16(b) of the Exchange
Act, such Optionee shall be entitled to surrender for cancellation his or her
Option during the sixty (60) day period commencing upon the expiration of six
(6) months from the date of grant of any such Option.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
-----------------------------------------
(a) Subject to Section 9, in the event of a Change in Capitalization, the
maximum number and class of Shares or other stock or securities with respect to
which Options may be granted under the Plan in the aggregate and to any
Optionee, the number and class of Shares or other stock or securities which are
subject to outstanding Options granted under the Plan, and the purchase price
therefor, if applicable, shall be appropriately and equitably adjusted by the
Committee.
(b) Any such adjustment in the Shares or other stock or securities subject
to outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a modification
as defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, an Optionee shall be
entitled to exercise an Option with respect to new, additional or different
shares of stock or securities, such new, additional or different shares shall
thereupon be subject to all of the conditions which were applicable to the
Shares subject to the Option, as the case may be, prior to such Change in
Capitalization.
9. EFFECT OF CERTAIN TRANSACTIONS.
------------------------------
Subject to Section 7(e), in the event of (1) the liquidation or dissolution
of the Company or (2) a merger or consolidation of the Company (a
"Transaction"), the Plan
12
<PAGE>
and the Options issued hereunder shall continue in effect in accordance with
their respective terms and each Optionee shall be entitled to receive in respect
of each Share subject to any outstanding Options, as the case may be, upon
exercise of any Option, the same number and kind of stock, securities, cash,
property, or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share. In the event that, after a
Transaction, there occurs any change of a type described in Section 2(e) hereof
with respect to the shares of the surviving or resulting corporation, then
adjustments similar to, and subject to the same conditions as, those in Section
8 hereof shall be made.
10. TERMINATION AND AMENDMENT OF THE PLAN.
-------------------------------------
(a) The Plan shall terminate on April 7, 2003, and no Option may be granted
thereafter. The Board may sooner terminate or amend the Plan at any time and
from time to time; provided, however, that to the extent necessary under Section
-------- -------
16(b) of the Exchange Act and the rules and regulations promulgated thereunder
or other applicable law, no amendment shall be effective unless approved by the
stockholders of the Company in accordance with applicable law and regulations at
an annual or special meeting held within twelve (12) months after the date of
adoption of such amendment.
(b) Except as provided in Sections 8 and 9 hereof, rights and obligations
under any Option granted before any amendment or termination of the Plan shall
not be adversely altered or impaired by such amendment or termination, except
with the consent of the Optionee, nor shall any amendment or termination deprive
any Optionee of any Shares which he may have acquired through or as a result of
the Plan.
11. NON-EXCLUSIVITY OF THE PLAN.
---------------------------
The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.
12. LIMITATION OF LIABILITY.
-----------------------
As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(a) give any person any right to be granted an Option other than at the
sole discretion of the Committee;
13
<PAGE>
(b) give any person any rights whatsoever with respect to Shares except as
specifically provided in the Plan;
(c) limit in any way the right of the Company to terminate the employment
of any person at any time; or
(d) be evidence of any agreement or understanding, expressed or implied,
that the Company will employ any person at any particular rate of compensation
or for any particular period of time.
13. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.
----------------------------------------------
(a) This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Delaware.
(b) The obligation of the Company to sell or deliver Shares with respect to
Options granted under the Plan shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.
(c) (1) The Plan is intended to comply with Rule 16b-3 promulgated
under the Exchange Act and the Committee shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.
(2) The Director Options described in Section 5 are intended to
qualify as formula awards under Rule 16b-3 promulgated under the Exchange Act
(thereby preserving the disinterested status of Nonemployee Directors receiving
such awards) and the Committee shall interpret and administer the provisions of
the Plan or any Agreement in a manner consistent therewith. Any provisions
inconsistent with the foregoing intent shall be inoperative and shall not affect
the validity of the Plan.
(3) Unless otherwise expressly stated in the relevant Agreement, each
Employee Option granted under the Plan is intended to be performance-based
compensation within the meaning of Section 162(m)(4)(C) of the Code.
(d) The Board may make such changes as may be necessary or appropriate to
comply with the rules and regulations of any government authority, or to obtain
for Eligible Employees granted Incentive Stock Options the tax benefits under
the applicable provisions of the Code and regulations promulgated thereunder.
14
<PAGE>
(e) Each Option is subject to the requirement that, if at any time the
Committee determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or the issuance of
Shares, no Options shall be granted or payment made or Shares issued, in whole
or in part, unless listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions as acceptable to the Committee.
(f) Notwithstanding anything contained in the Plan to the contrary, in the
event that the disposition of Shares acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act of
1933, as amended (the "Securities Act"), and is not otherwise exempt from such
registration, such Shares shall be restricted against transfer to the extent
required by the Securities Act and Rule 144 or other regulations thereunder.
The Committee may require any individual receiving Shares pursuant to the Plan,
as a condition precedent to receipt of such Shares upon exercise of an Option,
to represent and warrant to the Company in writing that the Shares acquired by
such individual are acquired without a view to any distribution thereof and will
not be sold or transferred other than pursuant to an effective registration
thereof under said Act or pursuant to an exemption applicable under the
Securities Act or the rules and regulations promulgated thereunder. The
certificates evidencing any of such Shares shall be appropriately amended to
reflect their status as restricted securities as aforesaid.
14. MISCELLANEOUS.
-------------
(a) Multiple Agreements. The terms of each Option may differ from other
Options granted under the Plan at the same time, or at some other time. The
Committee may also grant more than one Option to a given Eligible Employee
during the term of the Plan, either in addition to, or in substitution for, one
or more Options previously granted to that Eligible Employee.
(b) Withholding of Taxes. (1) The Company shall have the right to deduct
from any distribution of cash to any Optionee, an amount equal to the federal,
state and local income taxes and other amounts as may be required by law to be
withheld (the "Withholding Taxes") with respect to any Option. If an Optionee
is entitled to receive Shares upon exercise of an Option, the Optionee shall pay
the Withholding Taxes to the Company prior to the issuance, or release from
escrow, of such Shares. In satisfaction of the Withholding Taxes to the
Company, the Optionee may make a written election (the "Tax Election"), which
may be accepted or rejected in the discretion of the Committee, to have withheld
a portion of the Shares issuable to him or her upon exercise of the Option
having an aggregate Fair Market Value equal to the Withholding Taxes, provided
that in
15
<PAGE>
respect of an Optionee who may be subject to liability under Section 16(b) of
the Exchange Act either (A) (i) the Optionee makes the Tax Election at least six
(6) months after the date the Option was granted, (ii) the Option is exercised
during the ten day period beginning on the third business day and ending on the
twelfth business day following the release for publication of the Company's
quarterly or annual statements of earnings (a "Window Period") and (iii) the Tax
Election is made during the Window Period in which the Option is exercised or
prior to such Window Period and subsequent to the immediately preceding Window
Period or (B) (i) the Tax Election is made at least six (6) months prior to the
date the Option is exercised and (ii) the Tax Election is irrevocable with
respect to the exercise of all Options which are exercised prior to the
expiration of six (6) months following an election to revoke the Tax Election.
Notwithstanding the foregoing, the Committee may, by the adoption of rules or
otherwise, (x) modify the provisions in the preceding sentence or impose such
other restrictions or limitations on Tax Elections as may be necessary to ensure
that the Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, and (y) permit Tax Elections to be made at such other times and
subject to such other conditions as the Committee determines will constitute
exempt transactions under Section 16(b) of the Exchange Act.
(2) If an Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive
office, and immediately deliver to the Company the amount of Withholding Taxes.
15. EFFECTIVE DATE.
--------------
The effective date of the Amended and Restated Plan shall be the date of
its adoption by the Board, subject only to the approval by the affirmative votes
of the holders of a majority of the securities of the Company present, or
represented, and entitled to vote at a meeting of stockholders duly held in
accordance with the applicable laws of the State of Delaware within twelve (12)
months of such adoption.
Notwithstanding any provision contained herein to the contrary, any Option
outstanding on the date the Board adopts the Amended and Restated Plan will be
governed by the terms of the Plan as in effect immediately prior to such
adoption.
16
<PAGE>
SECOND RESTATED EMPLOYMENT AGREEMENT
------------------------------------
THIS RESTATED EMPLOYMENT AGREEMENT (the "Agreement") has been executed as
of March 26, 1996 by and between Countrywide Credit Industries, Inc., a Delaware
corporation ("Employer"), and David S. Loeb ("Officer").
W I T N E S S E T H:
--------------------
WHEREAS, Officer currently holds the offices of Chairman of the Board of
Directors of Employer (the "Board") and President of Employer; and
WHEREAS, Employer desires to obtain the benefit of continued services of
Officer and Officer desires to continue to render services to Employer; and
WHEREAS, the Board has determined that it is in Employer's best interest
and that of its stockholders to recognize the substantial contribution that
Officer has made and is expected to continue to make to the Company's business
and to retain his services in the future; and
WHEREAS, Employer and Officer set forth the terms and conditions of
Officer's employment with Employer under an employment agreement entered into as
of March 1, 1991 (the "Original Agreement"); and
WHEREAS, Employer and Officer entered into Amendment No. 1 to Employment
Agreement as of November 5, 1992 ("Amendment No. 1"), entered into Amendment No.
2 to Employment Agreement as of November 10, 1992 ("Amendment No. 2") and
entered into a Restated Employment Agreement as of February 2, 1993 (the "First
Restated Agreement"); and
WHEREAS, Employer and Officer desire to set forth the continued terms and
conditions of Officer's employment with Employer under this Agreement;
WHEREAS, the effectiveness of this Agreement is subject to the approval of
Employer's stockholders of the provisions of Section 4(b) hereof and the
amendments to the 1993 Plan (as defined herein) as submitted to stockholders for
approval.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
<PAGE>
1. Term. Employer agrees to employ Officer and Officer agrees to serve
----
Employer, in accordance with the terms hereof, for a term beginning on the
Effective Date (as defined in Section 8(c) hereof) and ending on February 28,
2001, unless earlier terminated in accordance with the provisions hereof.
2. Specific Position; Duties and Responsibilities. Employer and Officer
----------------------------------------------
hereby agree that, subject to the provisions of this Agreement, Employer will
employ Officer and Officer will serve Employer and its subsidiaries as Chairman
of the Board and President of Employer. Employer agrees that Officer's duties
hereunder shall be the usual and customary duties of the offices of Chairman of
the Board and President and such further duties consistent therewith as may be
designated from time to time by the Board, and shall not be inconsistent with
the provisions of the charter documents of Employer or applicable law. Officer
shall have such executive power and authority as shall reasonably be required to
enable him to discharge his duties in the offices which he may hold. All
compensation paid to Officer by Employer or any of its subsidiaries shall be
aggregated in determining whether Officer has received the benefits provided for
herein.
3. Scope of this Agreement and Outside Affiliations. During the term of
------------------------------------------------
this Agreement, Officer shall devote his full business time and energy, except
as expressly provided below, to the business, affairs and interests of Employer
and its subsidiaries, and matters related thereto, and shall use his best
efforts and abilities to promote its interests. Officer agrees that he will
diligently endeavor to promote the business, affairs and interests of Employer
and its subsidiaries and perform services contemplated hereby, in accordance
with the policies established by the Board, which policies shall be consistent
with this Agreement. Officer agrees to serve without additional remuneration in
such senior executive capacity not below the rank of President for one or more
(direct or indirect) subsidiaries of Employer as the Board may from time to time
request, subject to appropriate authorization by the subsidiary or subsidiaries
involved and any limitation under applicable law. Officer's failure to
discharge an order or perform a function because Officer reasonably and in good
faith believes such would violate a law or regulation or be dishonest shall not
be deemed a breach by him of his obligations or duties pursuant to any of the
provisions of this Agreement, including without limitation pursuant to Section
5(c) hereof.
During the course of Officer's employment as a full-time officer hereunder,
Officer shall not, without the consent of the Board, compete, directly or
indirectly, with Employer in the businesses then conducted by Employer.
2
<PAGE>
Officer may serve as a director or in any other capacity of any business
enterprise, including an enterprise whose activities may involve or relate to
the business of Employer, provided that such service is expressly approved by
the Board. Officer may make and manage personal business investments of his
choice and serve in any capacity with any civic, educational or charitable
organization, or any governmental entity or trade association, without seeking
or obtaining approval by the Board, provided such activities and services do not
materially interfere or conflict with the performance of his duties hereunder.
4. Compensation and Benefits.
-------------------------
(a) Base Salary. Employer shall pay to Officer a base salary in each
-----------
fiscal year of Employer (a "Fiscal Year") or portion thereof covered by this
Agreement at the annual rate of $1,300,000:
(b) Incentive Compensation. Employer shall pay to Officer for each of
----------------------
the Fiscal Years ending in 1997 through 2001 an incentive compensation award in
the amount of the incentive compensation award paid to Officer in the previous
Fiscal Year, multiplied by a fraction (the "Performance Ratio") the numerator of
which is the earnings per share on a fully diluted basis of Employer during such
current Fiscal Year as reported in the audited Financial Statements included in
Employer's Annual Report on Form 10-K filed with the Securities and Exchange
Commission (the "EPS") and the denominator of which is the EPS for the previous
Fiscal Year (adjusted proportionately in the event Employer (A) declares a stock
dividend on its common stock, (B) subdivides its outstanding common stock, (C)
combines the outstanding shares of its capital stock into a smaller number of
common stocks or (D) issues any shares of its capital stock in a
reclassification of the common stock (including any such reclassification in
connection with a consolidation or merger in which Employer is the continuing or
surviving corporation)); provided, however, that the Compensation Committee of
the Board (the "Compensation Committee") may reduce the amount of any incentive
compensation award in the event there is a substantial distortion in EPS for the
Fiscal Year in respect of which the award is being paid resulting from an
acquisition, a divestiture, or a change in accounting standards.
(c) Stock Options. Employer shall grant to Officer a stock option in
-------------
respect of 1,000,000 shares of the Employer's common stock on the first business
day following the Effective Date, such option to become exercisable as to
333,333, 333,333 and 333,334 shares on each of the first three (3) anniversaries
of the date of grant. Employer may also grant to Officer stock options in
respect of each of the Fiscal Years ending in 2000 and 2001 for such number of
shares of Employer's common stock as the Compensation Committee in its sole
discretion
3
<PAGE>
determines, taking into account Officer's and Employer's performance
in each of such Fiscal Years and the competitive practices then prevailing
regarding the granting of stock options. All stock options granted in
accordance with this Section 4(c) shall be granted pursuant to the Countrywide
Credit Industries, Inc. 1993 Stock Option Plan, as amended (the "1993 Plan"), or
such other stock option plan or plans as may be or come into effect during the
term of this Agreement and shall have a per share exercise price equal to the
fair market value (as defined in the 1993 Plan or such other plan or plans) of
the common stock at the time of grant. The stock options granted pursuant to
this Section shall consist of incentive stock options to the extent permitted by
law or regulation.
(d) Additional Benefits. Officer shall also be entitled to all rights
-------------------
and benefits for which he is otherwise eligible under any bonus plan, stock
purchase plan, participation or extra compensation plan, executive compensation
plan, pension plan, profit-sharing plan, life and medical insurance policy, or
other plans or benefits, which Employer or its subsidiaries may provide for him,
or provided he is eligible to participate therein, for senior officers generally
or for employees generally, during the term of this Agreement (collectively,
"Additional Benefits"). This Agreement shall not affect the provision of any
other compensation, retirement or other benefit program or plan of Employer.
(e) Continuation of Benefits. If Officer's employment is terminated
------------------------
hereunder, pursuant to Section 5(a), 5(b) or 5(d) hereof, Employer shall
continue for the period specified in Section 5(a) or 5(b) hereof or three years
in the case of a termination pursuant to Section 5(d) hereof, as the case may
be, to provide benefits substantially equivalent to Additional Benefits (other
than qualified pension or profit sharing plan benefits and option, equity or
stock appreciation or other incentive plan benefits as distinguished from
health, disability and welfare type benefits) on behalf of Officer and his
dependents and beneficiaries which were being provided to them immediately prior
to Officer's Termination Date, but only to the extent that Officer is not
entitled to comparable benefits from other employment.
(f) Deferral of Amounts Payable Hereunder. In the event Officer
-------------------------------------
should desire to defer receipt of any cash payments to which he would otherwise
be entitled hereunder, he may present such a written request to the Compensation
Committee which, in its sole discretion, may enter into a separate deferred
compensation agreement with Officer.
(g) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall the Performance Ratio be less than zero. Employer
shall pay the incentive compensation award described in Section 4(b) hereof for
4
<PAGE>
each Fiscal Year as early after the end of such Fiscal Year as practicable but
in no event more than 90 days after the end of such Fiscal Year; provided,
however, that the incentive compensation award described in Section 4(b) hereof
may be paid, in whole or in part, prior to the end of the Fiscal Year to which
such incentive compensation award relates, on such terms and conditions and at
such times as may otherwise be mutually agreed upon by Employer and Officer. If
the Compensation Committee shall determine to grant to Officer the stock options
described in Section 4(c) hereof in respect of either of the Fiscal Years ending
in 2000 or 2001, such options shall be granted at the same time as Employer
grants stock options to its other senior executives in respect of such Fiscal
Year (but in no event later than June 30 following the end of such Fiscal Year).
5. Termination. The compensation and benefits provided for herein and the
-----------
employment of Officer by Employer shall be terminated only as provided for below
in this Section 5:
(a) Disability. In the event that Officer shall fail, because of
----------
illness, injury or similar incapacity ("Disability"), to render for four (4)
consecutive calendar months, or for shorter periods aggregating eighty (80) or
more business days in any twelve (12) month period, services contemplated by
this Agreement, Officer's full-time employment hereunder may be terminated, by
written Notice of Termination from Employer to Officer; and thereafter, Employer
shall continue, from the Termination Date until Officer's death or the fifth
anniversary of such notice, whichever first occurs (the "Disability Payment
Period"), (i) to pay compensation to Officer, in the same manner as in effect
immediately prior to the Termination Date, in an amount equal to (1) fifty
percent (50%) of the then existing base salary payable immediately prior to the
termination, minus (2) the amount of any cash payments to him under the terms of
Employer's disability insurance or other disability benefit plans or Employer's
tax-qualified Defined Benefit Pension Plan, and any compensation he may receive
pursuant to any other employment, and (ii) to provide during the Disability
Payment Period the benefits specified in Section 4(e) hereof.
The determination of Disability shall be made only after 30 days
notice to Officer and only if Officer has not returned to performance of his
duties during such 30-day period. In order to determine Disability, both
Employer and Officer shall have the right to provide medical evidence to support
their respective positions, with the ultimate decision regarding Disability to
be made by a majority of Employer's disinterested directors.
(b) Death. In the event that Officer shall die during the term of
-----
this Agreement, Employer shall pay Officer's base salary for a period of twelve
5
<PAGE>
(12) months following the date of Officer's death and in the manner otherwise
payable hereunder, to such person or persons as Officer shall have directed in
writing or, in the absence of a designation, to his estate (the "Beneficiary").
Employer shall also provide during the twelve-month period following the date of
the Officer's death the benefits specified in Section 4(e) hereof. If Officer's
death occurs while he is receiving payments for Disability under Section 5(a)(i)
above, such payments shall cease and the Beneficiary shall be entitled to the
payments and benefits under this Subsection (b), which shall continue for a
period of twelve months thereafter at the full rate of compensation in effect
immediately prior to the Disability. This Agreement in all other respects will
terminate upon the death of Officer; provided, however, that the termination of
the Agreement shall not affect Officer's entitlement to all other benefits in
which he has become vested or which are otherwise payable in respect of periods
ending prior to its termination.
(c) Cause. Employer may terminate Officer's employment under this
-----
Agreement for "Cause." A termination for Cause is a termination by reason of (i)
a material breach of this Agreement by Officer (other than as a result of
incapacity due to physical or mental illness) which is committed in bad faith or
without reasonable belief that such breach is in the best interests of Employer
and which is not remedied within a reasonable period of time after receipt of
written notice from Employer specifying such breach, or (ii) Officer's
conviction by a court of competent jurisdiction of a felony, or (iii) entry of
an order duly issued by any federal or state regulatory agency having
jurisdiction in the matter removing Officer from office of Employer or its
subsidiaries or permanently prohibiting him from participating in the conduct of
the affairs of Employer or any of its subsidiaries. If Officer shall be
convicted of a felony or shall be removed from office and/or temporarily
prohibited from participating in the conduct of Employer's or any of its
subsidiaries' affairs by any federal or state regulatory authority having
jurisdiction in the matter, Employer's obligations under Sections 4(a), 4(b) and
4(c) hereof shall be automatically suspended; provided, however, that if the
charges resulting in such removal or prohibition are finally dismissed or if a
final judgment on the merits of such charges is issued in favor of Officer, or
if the conviction is overturned on appeal, then Officer shall be reinstated in
full with back pay for the removal period plus accrued interest at the rate then
payable on judgments. During the period that Employer's obligations under
Sections 4(a), 4(b) and 4(c) hereof are suspended, Officer shall continue to be
entitled to receive Additional Benefits under Section 4(d) until the conviction
of the felony or removal from office has become final and non-appealable. When
the conviction of the felony or removal from office has become final and non-
appealable, all of Employer's obligations hereunder shall terminate; provided,
however, that the termination of Officer's employment pursuant to this Section
5(c) shall not affect
6
<PAGE>
Officer's entitlement to all benefits in which he has become vested or which are
otherwise payable in respect of periods ending prior to his termination of
employment.
(d) Good Reason. Officer may terminate his employment for Good
-----------
Reason. For purposes of this Agreement, "Good Reason" shall be deemed to occur
if Employer notifies Officer of a termination of his employment other than for
Cause or if Employer breaches this Agreement in any material respect or if the
Board (i) elects a person other than Officer as Employer's President or Chairman
of the Board without Officer's consent, (ii) reorganizes management so as to
require him to report to a person or persons other than the Board, or (iii)
takes any other action which, in Officer's sole judgment, results in the
diminution in Officer's status, title, position and responsibilities other than
an insubstantial action not taken in bad faith and which is remedied by Employer
promptly after receipt of notice by Officer. Notwithstanding the foregoing,
Officer may terminate his employment for any or no reason within one year
following a "Change in Control" (as defined in Appendix A to this Agreement) and
such termination shall be considered a termination for Good Reason hereunder.
If Officer's employment shall be terminated by Employer other than for Cause or
by Officer for Good Reason, then Employer shall pay Officer in a single payment,
as severance pay and in lieu of any further salary and incentive compensation
for periods subsequent to the Termination Date, an amount in cash equal to three
times the sum of (A) Officer's annual base salary at the Termination Date and
(B) the aggregate bonus and/or incentive compensation paid or payable to Officer
in respect of the Fiscal Year preceding the fiscal year in which Officer's
Termination Date occurs.
Notwithstanding anything in this Agreement to the contrary, in the
event it shall be determined that any payment or distribution by Employer or any
other person or entity to or for the benefit of Officer (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise in connection with, or arising out of,
his employment with Employer or a change in ownership or effective control of
Employer or a substantial portion of its assets (a "Payment"), would be subject
to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), the
Payments shall be reduced (but not below zero) if and to the extent that such
reduction would result in Officer retaining a larger amount, on an after-tax
basis (taking into account federal, state and local income taxes and the
imposition of the Excise Tax), than if Officer received all of the Payments. If
the application of the preceding sentence should require a reduction in Payments
or other "parachute payments" (within the meaning of Section 280G of the Code),
unless Officer shall have designated otherwise, such reduction shall be
implemented, first, by reducing
7
<PAGE>
any non-cash benefits to the extent necessary and, second, by reducing any cash
benefits to the extent necessary. In each case, the reductions shall be made
starting with the payment or benefit to be made on the latest date following the
Termination Date and reducing payments or benefits in reverse chronological
order therefrom. All determinations concerning the application of this paragraph
shall be made by a nationally recognized firm of independent accountants,
selected by Officer and satisfactory to Employer, whose determination shall be
conclusive and binding on all parties. The fees and expenses of such accountants
shall be borne by Employer.
(e) Resignation. Except as provided in Section 5(d) hereof, if during
-----------
the term of this Agreement, Officer shall resign voluntarily, all of his rights
to payment or benefits hereunder shall immediately terminate; provided, however,
that the termination of Officer's employment pursuant to this Section 5(e) shall
not affect Officer's entitlement to all benefits in which he has become vested
or which are otherwise payable in respect of periods ending prior to his
termination of employment.
(f) Notice of Termination. Any purported termination by Employer or
---------------------
by Officer shall be communicated by a written Notice of Termination to the other
party hereto which indicates the specific termination provision in this
Agreement, if any, relied upon and which sets forth in reasonable detail the
facts and circumstances, if any, claimed to provide a basis for termination of
Officer's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination shall be effective without such Notice
of Termination. The "Termination Date" shall mean the date specified in the
Notice of Termination, which shall be no less than 30 or more than 60 days from
the date of the Notice of Termination. Notwithstanding any other provision of
this Agreement, in the event of any termination of Officer's employment
hereunder for any reason, Employer shall pay Officer his full base salary
through the Termination Date, plus any Additional Benefits which have been
earned or become payable, but which have not yet been paid as of such
Termination Date plus (unless Officer has resigned voluntarily pursuant to
Section 5(e) or been terminated for Cause in accordance with Section 5(c)
hereof) the Pro Rata Bonus (as defined below). The "Pro Rata Bonus" shall mean
the amount equal to the product of (x) the bonus or incentive award referred to
in Section 4(b) hereof paid or payable to Officer for the last full Fiscal Year
of Employer prior to Officer's Termination Date and (y) the fraction obtained by
dividing (A) the number of days elapsed since the end of such Fiscal Year
through the Termination Date and (B) 365.
8
<PAGE>
(g) Payments. All payments required under this Agreement (other than
--------
the Additional Benefits payable pursuant to Section 4(e) hereof) as a result of
the termination of Officer's employment hereunder shall be made within 15 days
of the Termination Date or, if any portion is not then reasonably determinable,
within five (5) days after such portion is so determinable. In the event of a
dispute concerning the validity of a purported termination which is maintained
in good faith, the Termination Date shall mean the date the dispute is finally
resolved and Employer will continue to provide Officer with the compensation and
benefits provided for under this Agreement, until the dispute is finally
resolved without any obligation by Officer to repay any of such amounts to
Employer, notwithstanding the final outcome of the dispute. Payments required
to be made by this Section 5(g) are in addition to all other amounts due under
Section 5 of this Agreement and shall not be offset against or reduce any other
amounts due under Section 5 of this Agreement. Officer shall be required to
render services to Employer during the period following his Termination Date but
before the dispute concerning the termination is finally determined unless
Employer fails to provide Officer with a reasonable opportunity to perform his
duties under this Agreement during such period.
6. Reimbursement of Business Expenses. During the term of this Agreement,
----------------------------------
Employer shall reimburse Officer promptly for all expenditures (including
travel, entertainment, parking, business meetings, and the monthly costs
(including dues) of maintaining memberships at appropriate clubs) to the extent
that such expenditures meet the requirements of the Code for deductibility by
Employer for federal income tax purposes or are otherwise in compliance with the
rules and policies of Employer and are substantiated by Officer as required by
the Internal Revenue Service and rules and policies of Employer.
7. Indemnity. To the extent permitted by applicable law, the Certificate
---------
of Incorporation and the By-Laws of Employer (as from time to time in effect)
and any indemnity agreements entered into from time to time between Employer and
Officer, Employer shall indemnify Officer and hold him harmless for any acts or
decisions made by him in good faith while performing services for Employer, and
shall use reasonable efforts to obtain coverage for him under liability
insurance policies now in force or hereafter obtained during the term of this
Agreement covering the other officers or directors of Employer.
8. Miscellaneous.
-------------
(a) Succession. This Agreement shall inure to the benefit of and
----------
shall be binding upon Employer, its successors and assigns, but without the
prior written consent of Officer, this Agreement may not be assigned other than
in
9
<PAGE>
connection with a merger or sale of substantially all the assets of the
Employer or similar transaction. Employer shall not agree to any such
transaction unless the successor to or assignee of the Company's business and/or
assets in such transaction expressly assumes all obligations of the Employer
hereunder. The obligations and duties of Officer hereby shall be personal and
not assignable.
(b) Notices. Any notices provided for in this Agreement shall be sent
-------
to Employer at 155 North Lake Avenue, Pasadena, California 91101, Attention:
Corporate Counsel/Secretary, with a copy to the Chairman of the Compensation
Committee at the same address, or to such other address as Employer may from
time to time in writing designate, and to Officer at such address as he may from
time to time in writing designate (or his business address of record in the
absence of such designation). All notices shall be deemed to have been given
two (2) business days after they have been deposited as certified mail, return
receipt requested, postage paid and properly addressed to the designated address
of the party to receive the notices.
(c) Effective Date. This Agreement shall become effective on the date
--------------
of the annual meeting of Employer's stockholders in 1996 (the "Effective Date")
provided Employer's stockholders vote to approve the provisions of Section 4(b)
hereof and the amendments to the 1993 Plan as submitted to the stockholders for
approval. If either of such matters is not approved by Employer's stockholders,
this Agreement shall be null and void and the First Restated Agreement shall
continue in full force and effect.
(d) Entire Agreement. This instrument contains the entire agreement
----------------
of the parties relating to the subject matter hereof, and it replaces and
supersedes any prior agreements between the parties relating to said subject
matter, including, but not limited to, the First Restated Agreement; provided,
however, that until this Agreement shall become effective, the First Restated
Agreement shall continue in full force and effect. No modifications or
amendments of this Agreement (including, but not limited to the provisions of
Section 4 hereof) shall be valid unless made in writing and signed by the
parties hereto.
(e) Waiver. The waiver of the breach of any term or of any condition
------
of this Agreement shall not be deemed to constitute the waiver of any other
breach of the same or any other term or condition.
(f) California Law. This Agreement shall be construed and interpreted
--------------
in accordance with the laws of California.
10
<PAGE>
(g) Attorneys' Fees in Action on Contract. If any litigation shall
-------------------------------------
occur between the Officer and Employer, which litigation arises out of or as a
result of this Agreement or the acts of the parties hereto pursuant to this
Agreement, or which seeks an interpretation of this Agreement, the prevailing
party in such litigation, in addition to any other judgment or award, shall be
entitled to receive such sums as the court hearing the matter shall find to be
reasonable as and for the attorneys' fees of the prevailing party.
(h) Confidentiality. Officer agrees that he will not divulge or
---------------
otherwise disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of Employer or any
of its subsidiaries which he may have learned as a result of his employment
during the term of this Agreement or prior thereto as an employee, officer or
director of or consultant to Employer or any of its subsidiaries, except to the
extent such use or disclosure is (i) necessary or appropriate to the performance
of this Agreement and in furtherance of Employer's best interests, (ii) required
by applicable law, (iii) lawfully obtainable from other sources, or (iv)
authorized by Employer. The provisions of this subsection shall survive the
expiration, suspension or termination, for any reason, of this Agreement.
(i) Remedies of Employer. Officer acknowledges that the services he
--------------------
is obligated to render under the provisions of this Agreement are of a special,
unique, unusual, extraordinary and intellectual character, which gives this
Agreement peculiar value to Employer. The loss of these services cannot be
reasonably or adequately compensated in damages in an action at law and it would
be difficult (if not impossible) to replace these services. By reason thereof,
Officer agrees and consents that if he violates any of the material provisions
of this Agreement, Employer, in addition to any other rights and remedies
available under this Agreement or under applicable law, shall be entitled during
the remainder of the term to seek injunctive relief, from a tribunal of
competent jurisdiction, restraining Officer from committing or continuing any
violation of this Agreement, or from the performance of services to any other
business entity, or both.
(j) Severability. If any provision of this Agreement is held invalid
------------
or unenforceable, the remainder of this Agreement shall nevertheless remain in
full force and effect, and if any provision is held invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.
(k) No Obligation to Mitigate. Officer shall not be required to
-------------------------
mitigate the amount of any payment provided for in this Agreement by seeking
11
<PAGE>
other employment or otherwise and, except as provided in Section 5(a)(i)(2)
hereof, no payment hereunder shall be offset or reduced by the amount of any
compensation or benefits provided to Officer in any subsequent employment.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COUNTRYWIDE CREDIT INDUSTRIES, INC.
ATTEST:
__________________________ By: _________________________________
Secretary
Title: ______________________________
OFFICER:
__________________________________
David S. Loeb, in his
individual capacity
116685.07
12
<PAGE>
APPENDIX A
TO DAVID LOEB EMPLOYMENT AGREEMENT
A "Change in Control" shall mean the occurrence during the term of the
Agreement, of any one of the following events:
(a) An acquisition (other than directly from Employer) of any common
stock or other "Voting Securities" (as hereinafter defined) of
Employer by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty five percent
(25%) or more of the then outstanding shares of Employer's common
stock or the combined voting power of Employer's then outstanding
Voting Securities; provided, however, in determining whether a
-------- -------
Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter defined)
shall not constitute an acquisition which would cause a Change in
Control. For purposes of this Agreement, (1) "Voting Securities"
shall mean Employer's outstanding voting securities entitled to
vote generally in the election of directors and (2) a "Non-
Control Acquisition" shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) maintained by
(A) Employer or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or
equity interest is owned, directly or indirectly, by Employer
(for purposes of this definition, a "Subsidiary"), (ii) Employer
or any of its Subsidiaries, or (iii) any Person in connection
with a "Non-Control Transaction" (as hereinafter defined);
(b) The individuals who, as of the date of the Agreement are members
of the Board (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the members of the Board;
provided, however, that if the election, or nomination for
-------- -------
election by Employer's common stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement,
be considered as a member of the Incumbent Board; provided
--------
further,
-------
A-1
<PAGE>
however, that no individual shall be considered a member
-------
of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy
Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization involving
Employer, unless such merger, consolidation or
reorganization is a "Non-Control Transaction." A "Non-
Control Transaction" shall mean a merger, consolidation or
reorganization of Employer where:
(A) the stockholders of Employer, immediately before such
merger, consolidation or reorganization, own directly
or indirectly immediately following such merger,
consolidation or reorganization, at least seventy
percent (70%) of the combined voting power of the
outstanding Voting Securities of the corporation
resulting from such merger, consolidation or
reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization;
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement
providing for such merger, consolidation or
reorganization constitute at least two-thirds of the
members of the board of directors of the Surviving
Corporation, or in the event that, immediately
following the consummation of such transaction, a
corporation beneficially owns, directly or indirectly,
a majority of the Voting
A-2
<PAGE>
Securities of the Surviving Corporation, the board of
directors of such corporation; and
(C) no Person other than (i) Employer, (ii) any Subsidiary,
(iii) any employee benefit plan (or any trust forming a
part thereof) maintained by Employer, the Surviving
Corporation, or any Subsidiary, or (iv) any Person who,
immediately prior to such merger, consolidation or
reorganization had Beneficial Ownership of twenty five
percent (25%) or more of the then outstanding Voting
Securities or common stock of Employer, has Beneficial
Ownership of twenty five percent (25%) or more of the
combined voting power of the Surviving Corporation's
then outstanding Voting Securities or its common stock;
(ii) A complete liquidation or dissolution of Employer; or
(iii) The sale or other disposition of all or substantially all
of the assets of Employer to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding common stock
or Voting Securities as a result of the acquisition of common stock or Voting
Securities by Employer which, by reducing the number of shares of common stock
or Voting Securities then outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons; provided, however, that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of common stock or Voting Securities by Employer, and
after such share acquisition by Employer, the Subject Person becomes the
Beneficial Owner of any additional common stock or Voting Securities which
increases the percentage of the then outstanding common stock or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
A-3
<PAGE>
SECOND RESTATED EMPLOYMENT AGREEMENT
------------------------------------
THIS RESTATED EMPLOYMENT AGREEMENT (the "Agreement") has been executed as
of March 26, 1996 by and between Countrywide Credit Industries, Inc., a Delaware
corporation ("Employer"), and Angelo R. Mozilo ("Officer").
W I T N E S S E T H:
--------------------
WHEREAS, Officer currently holds the offices of Vice Chairman of the Board
of Directors of Employer (the "Board") and Executive Vice President of Employer;
and
WHEREAS, Employer desires to obtain the benefit of continued services of
Officer and Officer desires to continue to render services to Employer; and
WHEREAS, the Board has determined that it is in Employer's best interest
and that of its stockholders to recognize the substantial contribution that
Officer has made and is expected to continue to make to the Company's business
and to retain his services in the future; and
WHEREAS, Employer and Officer set forth the terms and conditions of
Officer's employment with Employer under an employment agreement entered into as
of March 1, 1991 (the "Original Agreement"); and
WHEREAS, Employer and Officer entered into Amendment No. 1 to Employment
Agreement as of November 5, 1992 ("Amendment No. 1"), entered into Amendment No.
2 to Employment Agreement as of November 10, 1992 ("Amendment No. 2") and
entered into a Restated Employment Agreement as of February 2, 1993 (the "First
Restated Agreement"); and
WHEREAS, Employer and Officer desire to set forth the continued terms and
conditions of Officer's employment with Employer under this Agreement;
WHEREAS, the effectiveness of this Agreement is subject to the approval of
Employer's stockholders of the provisions of Section 4(b) hereof and the
amendments to the 1993 Plan (as defined herein) as submitted to stockholders for
approval.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
<PAGE>
1. Term. Employer agrees to employ Officer and Officer agrees to serve
----
Employer, in accordance with the terms hereof, for a term beginning on the
Effective Date (as defined in Section 8(c) hereof) and ending on February 28,
2001, unless earlier terminated in accordance with the provisions hereof.
2. Specific Position; Duties and Responsibilities. Employer and Officer
----------------------------------------------
hereby agree that, subject to the provisions of this Agreement, Employer will
employ Officer and Officer will serve Employer and its subsidiaries as Vice
Chairman of the Board and Executive Vice President of Employer. Employer agrees
that Officer's duties hereunder shall be the usual and customary duties of the
offices of Chairman of the Board and President and such further duties
consistent therewith as may be designated from time to time by the Board, and
shall not be inconsistent with the provisions of the charter documents of
Employer or applicable law. Officer shall have such executive power and
authority as shall reasonably be required to enable him to discharge his duties
in the offices which he may hold. All compensation paid to Officer by Employer
or any of its subsidiaries shall be aggregated in determining whether Officer
has received the benefits provided for herein.
3. Scope of this Agreement and Outside Affiliations. During the term of
------------------------------------------------
this Agreement, Officer shall devote his full business time and energy, except
as expressly provided below, to the business, affairs and interests of Employer
and its subsidiaries, and matters related thereto, and shall use his best
efforts and abilities to promote its interests. Officer agrees that he will
diligently endeavor to promote the business, affairs and interests of Employer
and its subsidiaries and perform services contemplated hereby, in accordance
with the policies established by the Board, which policies shall be consistent
with this Agreement. Officer agrees to serve without additional remuneration in
such senior executive capacity not below the rank of Vice President for one or
more (direct or indirect) subsidiaries of Employer as the Board may from time to
time request, subject to appropriate authorization by the subsidiary or
subsidiaries involved and any limitation under applicable law. Officer's
failure to discharge an order or perform a function because Officer reasonably
and in good faith believes such would violate a law or regulation or be
dishonest shall not be deemed a breach by him of his obligations or duties
pursuant to any of the provisions of this Agreement, including without
limitation pursuant to Section 5(c) hereof.
During the course of Officer's employment as a full-time officer hereunder,
Officer shall not, without the consent of the Board, compete, directly or
indirectly, with Employer in the businesses then conducted by Employer.
2
<PAGE>
Officer may serve as a director or in any other capacity of any business
enterprise, including an enterprise whose activities may involve or relate to
the business of Employer, provided that such service is expressly approved by
the Board. Officer may make and manage personal business investments of his
choice and serve in any capacity with any civic, educational or charitable
organization, or any governmental entity or trade association, without seeking
or obtaining approval by the Board, provided such activities and services do not
materially interfere or conflict with the performance of his duties hereunder.
4. Compensation and Benefits.
-------------------------
(a) Base Salary. Employer shall pay to Officer a base salary in each
-----------
fiscal year of Employer (a "Fiscal Year") or portion thereof covered by this
Agreement at the annual rate of $1,300,000:
(b) Incentive Compensation. Employer shall pay to Officer for each of
----------------------
the Fiscal Years ending in 1997 through 2001 an incentive compensation award in
the amount of the incentive compensation award paid to Officer in the previous
Fiscal Year, multiplied by a fraction (the "Performance Ratio") the numerator of
which is the earnings per share on a fully diluted basis of Employer during such
current Fiscal Year as reported in the audited Financial Statements included in
Employer's Annual Report on Form 10-K filed with the Securities and Exchange
Commission (the "EPS") and the denominator of which is the EPS for the previous
Fiscal Year (adjusted proportionately in the event Employer (A) declares a stock
dividend on its common stock, (B) subdivides its outstanding common stock, (C)
combines the outstanding shares of its capital stock into a smaller number of
common stocks or (D) issues any shares of its capital stock in a
reclassification of the common stock (including any such reclassification in
connection with a consolidation or merger in which Employer is the continuing or
surviving corporation)); provided, however, that the Compensation Committee of
the Board (the "Compensation Committee") may reduce the amount of any incentive
compensation award in the event there is a substantial distortion in EPS for the
Fiscal Year in respect of which the award is being paid resulting from an
acquisition, a divestiture, or a change in accounting standards.
(c) Stock Options. Employer shall grant to Officer a stock option in
-------------
respect of 1,000,000 shares of the Employer's common stock on the first business
day following the Effective Date, such option to become exercisable as to
333,333, 333,333 and 333,334 shares on each of the first three (3) anniversaries
of the date of grant. Employer may also grant to Officer stock options in
respect of each of the Fiscal Years ending in 2000 and 2001 for such number of
shares of Employer's common stock as the Compensation Committee in its sole
discretion
3
<PAGE>
determines, taking into account Officer's and Employer's performance in each of
such Fiscal Years and the competitive practices then prevailing regarding the
granting of stock options. All stock options granted in accordance with this
Section 4(c) shall be granted pursuant to the Countrywide Credit Industries,
Inc. 1993 Stock Option Plan, as amended (the "1993 Plan"), or such other stock
option plan or plans as may be or come into effect during the term of this
Agreement and shall have a per share exercise price equal to the fair market
value (as defined in the 1993 Plan or such other plan or plans) of the common
stock at the time of grant. The stock options granted pursuant to this Section
shall consist of incentive stock options to the extent permitted by law or
regulation.
(d) Additional Benefits. Officer shall also be entitled to all rights
-------------------
and benefits for which he is otherwise eligible under any bonus plan, stock
purchase plan, participation or extra compensation plan, executive compensation
plan, pension plan, profit-sharing plan, life and medical insurance policy, or
other plans or benefits, which Employer or its subsidiaries may provide for him,
or provided he is eligible to participate therein, for senior officers generally
or for employees generally, during the term of this Agreement (collectively,
"Additional Benefits"). This Agreement shall not affect the provision of any
other compensation, retirement or other benefit program or plan of Employer.
(e) Continuation of Benefits. If Officer's employment is terminated
------------------------
hereunder, pursuant to Section 5(a), 5(b) or 5(d) hereof, Employer shall
continue for the period specified in Section 5(a) or 5(b) hereof or three years
in the case of a termination pursuant to Section 5(d) hereof, as the case may
be, to provide benefits substantially equivalent to Additional Benefits (other
than qualified pension or profit sharing plan benefits and option, equity or
stock appreciation or other incentive plan benefits as distinguished from
health, disability and welfare type benefits) on behalf of Officer and his
dependents and beneficiaries which were being provided to them immediately prior
to Officer's Termination Date, but only to the extent that Officer is not
entitled to comparable benefits from other employment.
(f) Deferral of Amounts Payable Hereunder. In the event Officer
-------------------------------------
should desire to defer receipt of any cash payments to which he would otherwise
be entitled hereunder, he may present such a written request to the Compensation
Committee which, in its sole discretion, may enter into a separate deferred
compensation agreement with Officer.
(g) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall the Performance Ratio be less than zero. Employer
shall pay the incentive compensation award described in Section 4(b) hereof for
4
<PAGE>
each Fiscal Year as early after the end of such Fiscal Year as practicable but
in no event more than 90 days after the end of such Fiscal Year; provided,
however, that the incentive compensation award described in Section 4(b) hereof
may be paid, in whole or in part, prior to the end of the Fiscal Year to which
such incentive compensation award relates, on such terms and conditions and at
such times as may otherwise be mutually agreed upon by Employer and Officer. If
the Compensation Committee shall determine to grant to Officer the stock options
described in Section 4(c) hereof in respect of either of the Fiscal Years ending
in 2000 or 2001, such options shall be granted at the same time as Employer
grants stock options to its other senior executives in respect of such Fiscal
Year (but in no event later than June 30 following the end of such Fiscal Year).
5. Termination. The compensation and benefits provided for herein and the
-----------
employment of Officer by Employer shall be terminated only as provided for below
in this Section 5:
(a) Disability. In the event that Officer shall fail, because of
----------
illness, injury or similar incapacity ("Disability"), to render for four (4)
consecutive calendar months, or for shorter periods aggregating eighty (80) or
more business days in any twelve (12) month period, services contemplated by
this Agreement, Officer's full-time employment hereunder may be terminated, by
written Notice of Termination from Employer to Officer; and thereafter, Employer
shall continue, from the Termination Date until Officer's death or the fifth
anniversary of such notice, whichever first occurs (the "Disability Payment
Period"), (i) to pay compensation to Officer, in the same manner as in effect
immediately prior to the Termination Date, in an amount equal to (1) fifty
percent (50%) of the then existing base salary payable immediately prior to the
termination, minus (2) the amount of any cash payments to him under the terms of
Employer's disability insurance or other disability benefit plans or Employer's
tax-qualified Defined Benefit Pension Plan, and any compensation he may receive
pursuant to any other employment, and (ii) to provide during the Disability
Payment Period the benefits specified in Section 4(e) hereof.
The determination of Disability shall be made only after 30 days
notice to Officer and only if Officer has not returned to performance of his
duties during such 30-day period. In order to determine Disability, both
Employer and Officer shall have the right to provide medical evidence to support
their respective positions, with the ultimate decision regarding Disability to
be made by a majority of Employer's disinterested directors.
(b) Death. In the event that Officer shall die during the term of
-----
this Agreement, Employer shall pay Officer's base salary for a period of twelve
5
<PAGE>
(12) months following the date of Officer's death and in the manner otherwise
payable hereunder, to such person or persons as Officer shall have directed in
writing or, in the absence of a designation, to his estate (the "Beneficiary").
Employer shall also provide during the twelve-month period following the date of
the Officer's death the benefits specified in Section 4(e) hereof. If Officer's
death occurs while he is receiving payments for Disability under Section 5(a)(i)
above, such payments shall cease and the Beneficiary shall be entitled to the
payments and benefits under this Subsection (b), which shall continue for a
period of twelve months thereafter at the full rate of compensation in effect
immediately prior to the Disability. This Agreement in all other respects will
terminate upon the death of Officer; provided, however, that the termination of
the Agreement shall not affect Officer's entitlement to all other benefits in
which he has become vested or which are otherwise payable in respect of periods
ending prior to its termination.
(c) Cause. Employer may terminate Officer's employment under this
-----
Agreement for "Cause." A termination for Cause is a termination by reason of (i)
a material breach of this Agreement by Officer (other than as a result of
incapacity due to physical or mental illness) which is committed in bad faith or
without reasonable belief that such breach is in the best interests of Employer
and which is not remedied within a reasonable period of time after receipt of
written notice from Employer specifying such breach, or (ii) Officer's
conviction by a court of competent jurisdiction of a felony, or (iii) entry of
an order duly issued by any federal or state regulatory agency having
jurisdiction in the matter removing Officer from office of Employer or its
subsidiaries or permanently prohibiting him from participating in the conduct of
the affairs of Employer or any of its subsidiaries. If Officer shall be
convicted of a felony or shall be removed from office and/or temporarily
prohibited from participating in the conduct of Employer's or any of its
subsidiaries' affairs by any federal or state regulatory authority having
jurisdiction in the matter, Employer's obligations under Sections 4(a), 4(b) and
4(c) hereof shall be automatically suspended; provided, however, that if the
charges resulting in such removal or prohibition are finally dismissed or if a
final judgment on the merits of such charges is issued in favor of Officer, or
if the conviction is overturned on appeal, then Officer shall be reinstated in
full with back pay for the removal period plus accrued interest at the rate then
payable on judgments. During the period that Employer's obligations under
Sections 4(a), 4(b) and 4(c) hereof are suspended, Officer shall continue to be
entitled to receive Additional Benefits under Section 4(d) until the conviction
of the felony or removal from office has become final and non-appealable. When
the conviction of the felony or removal from office has become final and non-
appealable, all of Employer's obligations hereunder shall terminate; provided,
however, that the termination of Officer's employment pursuant to this Section
5(c) shall not affect
6
<PAGE>
Officer's entitlement to all benefits in which he has become vested or which are
otherwise payable in respect of periods ending prior to his termination of
employment.
(d) Good Reason. Officer may terminate his employment for Good
-----------
Reason. For purposes of this Agreement, "Good Reason" shall be deemed to occur
if Employer notifies Officer of a termination of his employment other than for
Cause or if Employer breaches this Agreement in any material respect or if the
Board (i) elects a person other than Officer as Employer's President or Chairman
of the Board without Officer's consent, (ii) reorganizes management so as to
require him to report to a person or persons other than the Board, or (iii)
takes any other action which, in Officer's sole judgment, results in the
diminution in Officer's status, title, position and responsibilities other than
an insubstantial action not taken in bad faith and which is remedied by Employer
promptly after receipt of notice by Officer. Notwithstanding the foregoing,
Officer may terminate his employment for any or no reason within one year
following a "Change in Control" (as defined in Appendix A to this Agreement) and
such termination shall be considered a termination for Good Reason hereunder.
If Officer's employment shall be terminated by Employer other than for Cause or
by Officer for Good Reason, then Employer shall pay Officer in a single payment,
as severance pay and in lieu of any further salary and incentive compensation
for periods subsequent to the Termination Date, an amount in cash equal to three
times the sum of (A) Officer's annual base salary at the Termination Date and
(B) the aggregate bonus and/or incentive compensation paid or payable to Officer
in respect of the Fiscal Year preceding the fiscal year in which Officer's
Termination Date occurs.
Notwithstanding anything in this Agreement to the contrary, in the
event it shall be determined that any payment or distribution by Employer or any
other person or entity to or for the benefit of Officer (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise in connection with, or arising out of,
his employment with Employer or a change in ownership or effective control of
Employer or a substantial portion of its assets (a "Payment"), would be subject
to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), the
Payments shall be reduced (but not below zero) if and to the extent that such
reduction would result in Officer retaining a larger amount, on an after-tax
basis (taking into account federal, state and local income taxes and the
imposition of the Excise Tax), than if Officer received all of the Payments. If
the application of the preceding sentence should require a reduction in Payments
or other "parachute payments" (within the meaning of Section 280G of the Code),
unless Officer shall have designated otherwise, such reduction shall be
implemented, first, by reducing
7
<PAGE>
any non-cash benefits to the extent necessary and, second, by reducing any cash
benefits to the extent necessary. In each case, the reductions shall be made
starting with the payment or benefit to be made on the latest date following the
Termination Date and reducing payments or benefits in reverse chronological
order therefrom. All determinations concerning the application of this paragraph
shall be made by a nationally recognized firm of independent accountants,
selected by Officer and satisfactory to Employer, whose determination shall be
conclusive and binding on all parties. The fees and expenses of such accountants
shall be borne by Employer.
(e) Resignation. Except as provided in Section 5(d) hereof, if during
-----------
the term of this Agreement, Officer shall resign voluntarily, all of his rights
to payment or benefits hereunder shall immediately terminate; provided, however,
that the termination of Officer's employment pursuant to this Section 5(e) shall
not affect Officer's entitlement to all benefits in which he has become vested
or which are otherwise payable in respect of periods ending prior to his
termination of employment.
(f) Notice of Termination. Any purported termination by Employer or
---------------------
by Officer shall be communicated by a written Notice of Termination to the other
party hereto which indicates the specific termination provision in this
Agreement, if any, relied upon and which sets forth in reasonable detail the
facts and circumstances, if any, claimed to provide a basis for termination of
Officer's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination shall be effective without such Notice
of Termination. The "Termination Date" shall mean the date specified in the
Notice of Termination, which shall be no less than 30 or more than 60 days from
the date of the Notice of Termination. Notwithstanding any other provision of
this Agreement, in the event of any termination of Officer's employment
hereunder for any reason, Employer shall pay Officer his full base salary
through the Termination Date, plus any Additional Benefits which have been
earned or become payable, but which have not yet been paid as of such
Termination Date plus (unless Officer has resigned voluntarily pursuant to
Section 5(e) or been terminated for Cause in accordance with Section 5(c)
hereof) the Pro Rata Bonus (as defined below). The "Pro Rata Bonus" shall mean
the amount equal to the product of (x) the bonus or incentive award referred to
in Section 4(b) hereof paid or payable to Officer for the last full Fiscal Year
of Employer prior to Officer's Termination Date and (y) the fraction obtained by
dividing (A) the number of days elapsed since the end of such Fiscal Year
through the Termination Date and (B) 365.
8
<PAGE>
(g) Payments. All payments required under this Agreement (other than
--------
the Additional Benefits payable pursuant to Section 4(e) hereof) as a result of
the termination of Officer's employment hereunder shall be made within 15 days
of the Termination Date or, if any portion is not then reasonably determinable,
within five (5) days after such portion is so determinable. In the event of a
dispute concerning the validity of a purported termination which is maintained
in good faith, the Termination Date shall mean the date the dispute is finally
resolved and Employer will continue to provide Officer with the compensation and
benefits provided for under this Agreement, until the dispute is finally
resolved without any obligation by Officer to repay any of such amounts to
Employer, notwithstanding the final outcome of the dispute. Payments required
to be made by this Section 5(g) are in addition to all other amounts due under
Section 5 of this Agreement and shall not be offset against or reduce any other
amounts due under Section 5 of this Agreement. Officer shall be required to
render services to Employer during the period following his Termination Date but
before the dispute concerning the termination is finally determined unless
Employer fails to provide Officer with a reasonable opportunity to perform his
duties under this Agreement during such period.
6. Reimbursement of Business Expenses. During the term of this Agreement,
----------------------------------
Employer shall reimburse Officer promptly for all expenditures (including
travel, entertainment, parking, business meetings, and the monthly costs
(including dues) of maintaining memberships at appropriate clubs) to the extent
that such expenditures meet the requirements of the Code for deductibility by
Employer for federal income tax purposes or are otherwise in compliance with the
rules and policies of Employer and are substantiated by Officer as required by
the Internal Revenue Service and rules and policies of Employer.
7. Indemnity. To the extent permitted by applicable law, the Certificate
---------
of Incorporation and the By-Laws of Employer (as from time to time in effect)
and any indemnity agreements entered into from time to time between Employer and
Officer, Employer shall indemnify Officer and hold him harmless for any acts or
decisions made by him in good faith while performing services for Employer, and
shall use reasonable efforts to obtain coverage for him under liability
insurance policies now in force or hereafter obtained during the term of this
Agreement covering the other officers or directors of Employer.
8. Miscellaneous.
-------------
(a) Succession. This Agreement shall inure to the benefit of and
----------
shall be binding upon Employer, its successors and assigns, but without the
prior written consent of Officer, this Agreement may not be assigned other than
in
9
<PAGE>
connection with a merger or sale of substantially all the assets of the Employer
or similar transaction. Employer shall not agree to any such transaction unless
the successor to or assignee of the Company's business and/or assets in such
transaction expressly assumes all obligations of the Employer hereunder. The
obligations and duties of Officer hereby shall be personal and not assignable.
(b) Notices. Any notices provided for in this Agreement shall be sent
-------
to Employer at 155 North Lake Avenue, Pasadena, California 91101, Attention:
Corporate Counsel/Secretary, with a copy to the Chairman of the Compensation
Committee at the same address, or to such other address as Employer may from
time to time in writing designate, and to Officer at such address as he may from
time to time in writing designate (or his business address of record in the
absence of such designation). All notices shall be deemed to have been given
two (2) business days after they have been deposited as certified mail, return
receipt requested, postage paid and properly addressed to the designated address
of the party to receive the notices.
(c) Effective Date. This Agreement shall become effective on the date
--------------
of the annual meeting of Employer's stockholders in 1996 (the "Effective Date")
provided Employer's stockholders vote to approve the provisions of Section 4(b)
hereof and the amendments to the 1993 Plan as submitted to the stockholders for
approval. If either of such matters is not approved by Employer's stockholders,
this Agreement shall be null and void and the First Restated Agreement shall
continue in full force and effect.
(d) Entire Agreement. This instrument contains the entire agreement
----------------
of the parties relating to the subject matter hereof, and it replaces and
supersedes any prior agreements between the parties relating to said subject
matter, including, but not limited to, the First Restated Agreement; provided,
however, that until this Agreement shall become effective, the First Restated
Agreement shall continue in full force and effect. No modifications or
amendments of this Agreement (including, but not limited to the provisions of
Section 4 hereof) shall be valid unless made in writing and signed by the
parties hereto.
(e) Waiver. The waiver of the breach of any term or of any condition
------
of this Agreement shall not be deemed to constitute the waiver of any other
breach of the same or any other term or condition.
(f) California Law. This Agreement shall be construed and interpreted
--------------
in accordance with the laws of California.
10
<PAGE>
(g) Attorneys' Fees in Action on Contract. If any litigation shall
-------------------------------------
occur between the Officer and Employer, which litigation arises out of or as a
result of this Agreement or the acts of the parties hereto pursuant to this
Agreement, or which seeks an interpretation of this Agreement, the prevailing
party in such litigation, in addition to any other judgment or award, shall be
entitled to receive such sums as the court hearing the matter shall find to be
reasonable as and for the attorneys' fees of the prevailing party.
(h) Confidentiality. Officer agrees that he will not divulge or
---------------
otherwise disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of Employer or any
of its subsidiaries which he may have learned as a result of his employment
during the term of this Agreement or prior thereto as an employee, officer or
director of or consultant to Employer or any of its subsidiaries, except to the
extent such use or disclosure is (i) necessary or appropriate to the performance
of this Agreement and in furtherance of Employer's best interests, (ii) required
by applicable law, (iii) lawfully obtainable from other sources, or (iv)
authorized by Employer. The provisions of this subsection shall survive the
expiration, suspension or termination, for any reason, of this Agreement.
(i) Remedies of Employer. Officer acknowledges that the services he
--------------------
is obligated to render under the provisions of this Agreement are of a special,
unique, unusual, extraordinary and intellectual character, which gives this
Agreement peculiar value to Employer. The loss of these services cannot be
reasonably or adequately compensated in damages in an action at law and it would
be difficult (if not impossible) to replace these services. By reason thereof,
Officer agrees and consents that if he violates any of the material provisions
of this Agreement, Employer, in addition to any other rights and remedies
available under this Agreement or under applicable law, shall be entitled during
the remainder of the term to seek injunctive relief, from a tribunal of
competent jurisdiction, restraining Officer from committing or continuing any
violation of this Agreement, or from the performance of services to any other
business entity, or both.
(j) Severability. If any provision of this Agreement is held invalid
------------
or unenforceable, the remainder of this Agreement shall nevertheless remain in
full force and effect, and if any provision is held invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.
(k) No Obligation to Mitigate. Officer shall not be required to
-------------------------
mitigate the amount of any payment provided for in this Agreement by seeking
11
<PAGE>
other employment or otherwise and, except as provided in Section 5(a)(i)(2)
hereof, no payment hereunder shall be offset or reduced by the amount of any
compensation or benefits provided to Officer in any subsequent employment.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COUNTRYWIDE CREDIT INDUSTRIES, INC.
ATTEST:
__________________________ By: _________________________________
Secretary
Title: ______________________________
OFFICER:
__________________________________
Angelo R. Mozilo, in his
individual capacity
12
<PAGE>
APPENDIX A
TO ANGELO R. MOZILO EMPLOYMENT AGREEMENT
A "Change in Control" shall mean the occurrence during the term of the
Agreement, of any one of the following events:
(a) An acquisition (other than directly from Employer) of any common
stock or other "Voting Securities" (as hereinafter defined) of
Employer by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty five percent
(25%) or more of the then outstanding shares of Employer's common
stock or the combined voting power of Employer's then outstanding
Voting Securities; provided, however, in determining whether a
-------- -------
Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter defined)
shall not constitute an acquisition which would cause a Change in
Control. For purposes of this Agreement, (1) "Voting Securities"
shall mean Employer's outstanding voting securities entitled to
vote generally in the election of directors and (2) a "Non-
Control Acquisition" shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) maintained by
(A) Employer or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or
equity interest is owned, directly or indirectly, by Employer
(for purposes of this definition, a "Subsidiary"), (ii) Employer
or any of its Subsidiaries, or (iii) any Person in connection
with a "Non-Control Transaction" (as hereinafter defined);
(b) The individuals who, as of the date of the Agreement are members
of the Board (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the members of the Board;
provided, however, that if the election, or nomination for
-------- -------
election by Employer's common stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement,
be considered as a member of the Incumbent Board; provided
--------
further,
-------
A-1
<PAGE>
however, that no individual shall be considered a member
-------
of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy
Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization involving
Employer, unless such merger, consolidation or
reorganization is a "Non-Control Transaction." A "Non-
Control Transaction" shall mean a merger, consolidation or
reorganization of Employer where:
(A) the stockholders of Employer, immediately before such
merger, consolidation or reorganization, own directly
or indirectly immediately following such merger,
consolidation or reorganization, at least seventy
percent (70%) of the combined voting power of the
outstanding Voting Securities of the corporation
resulting from such merger, consolidation or
reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization;
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement
providing for such merger, consolidation or
reorganization constitute at least two-thirds of the
members of the board of directors of the Surviving
Corporation, or in the event that, immediately
following the consummation of such transaction, a
corporation beneficially owns, directly or indirectly,
a majority of the Voting
A-2
<PAGE>
Securities of the Surviving Corporation, the board of
directors of such corporation; and
(C) no Person other than (i) Employer, (ii) any Subsidiary,
(iii) any employee benefit plan (or any trust forming a
part thereof) maintained by Employer, the Surviving
Corporation, or any Subsidiary, or (iv) any Person who,
immediately prior to such merger, consolidation or
reorganization had Beneficial Ownership of twenty five
percent (25%) or more of the then outstanding Voting
Securities or common stock of Employer, has Beneficial
Ownership of twenty five percent (25%) or more of the
combined voting power of the Surviving Corporation's
then outstanding Voting Securities or its common stock;
(ii) A complete liquidation or dissolution of Employer; or
(iii) The sale or other disposition of all or substantially all
of the assets of Employer to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding common stock
or Voting Securities as a result of the acquisition of common stock or Voting
Securities by Employer which, by reducing the number of shares of common stock
or Voting Securities then outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons; provided, however, that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of common stock or Voting Securities by Employer, and
after such share acquisition by Employer, the Subject Person becomes the
Beneficial Owner of any additional common stock or Voting Securities which
increases the percentage of the then outstanding common stock or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
A-3
<PAGE>
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[_]
UNMARKED PROXIES SHALL BE VOTED IN FAVOR OF EACH OF THE LISTED MATTERS UNLESS
SPECIFIED TO THE CONTRARY.
1. To elect to the Board of Directors for a term expiring at the 1999 Annual
Meeting.
FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
listed below for all nominees listed below.
[_] [_] [_]
Nominees: David S. Loeb and Angelo R. Mozilo
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions_____________________________________________________________________
2. To approve the annual cash bonus provisions of the employment agreements of
David S. Loeb and Angelo R. Mozilo.
FOR [_] AGAINST [_] ABSTAIN [_]
3. To approve the Company's Annual Incentive Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
4. To approve the Company's Amended and Restated 1993 Stock Option Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
5. To approve the selection of Grant Thornton LLP as the Independent
Accountants to audit the Company's financial statements for the fiscal year
ending February 28, 1997.
FOR [_] AGAINST [_] ABSTAIN [_]
I PLAN TO ATTEND THE MEETING [_] Change of Address and [_]
or Comments Mark Here
NOTE: Please date and sign exactly as the
name appears on this proxy. Joint owners
should each sign. If the signer is a
corporation, please sign full corporate
name by a duly authorized officer.
Executors, trustees, etc. should give
full title as such.
Dated: __________________________________
_________________________________________
Signature
_________________________________________
Signature
VOTES MUST BE INDICATED [_]
(X) IN BLACK OR BLUE INK.
PLEASE RETURN PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE U.S.A.
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COUNTRYWIDE CREDIT INDUSTRIES, INC.
P R O X Y
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS, JULY 10, 1996
The undersigned hereby appoints David S. Loeb and Angelo R. Mozilo, or
either of them, with full power of substitution, the attorney and proxy of the
undersigned, to appear and to vote all of the shares of stock of Countrywide
Credit Industries, Inc. (the "Company") which the undersigned would be entitled
to vote if personally present at the Annual Meeting of Stockholders of the
Company to be held at the Pasadena Hilton, 150 South Los Robles, Pasadena,
California on July 10, 1996 at 10:00 A.M. and any adjournment thereof.
Receipt of copies of the Annual Report to Shareholders, the Notice of the
Annual Meeting of Stockholders and the Proxy Statement dated May 31, 1996 is
hereby acknowledged.
(Continued and to be signed on reverse side)
COUNTRYWIDE CREDIT INDUSTRIES, INC.
P.O. BOX 11148
NEW YORK, N.Y. 10203-0148
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