<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF COUNTRYWIDE(R) CREDIT INDUSTRIES, INC.]
4500 Park Granada
Calabasas, California 91302
June 1, 1999
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
1999 Annual Meeting of Stockholders of Countrywide Credit Industries, Inc. The
meeting will be held on July 9, 1999 at 10:00 a.m. in the Plaza Nueva Room of
the Hyatt Westlake Plaza Hotel, 880 S. Westlake Boulevard, Westlake Village,
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/ Angelo R. Mozilo
Angelo R. Mozilo
Chairman of the Board
<PAGE>
[LOGO OF COUNTRYWIDE(R) CREDIT INDUSTRIES, INC.]
4500 Park Granada
Calabasas, California 91302
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 9, 1999
----------------
To the Stockholders:
The 1999 Annual Meeting of Stockholders of Countrywide Credit Industries,
Inc. (the "Company") will be held in the Plaza Nueva Room of the Hyatt
Westlake Plaza Hotel, 880 S. Westlake Boulevard, Westlake Village, California,
on July 9, 1999 at 10:00 a.m., Pacific 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 2002 Annual Meeting.
2. To adopt the Company's 1999 Employee Stock Purchase Plan.
3. 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 29, 2000.
4. 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, 1999 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: June 1, 1999
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS. 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.]
4500 Park Granada
Calabasas, California 91302
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
July 9, 1999
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 1999 Annual
Meeting of Stockholders to be held in the Plaza Nueva Room of the Hyatt
Westlake Plaza Hotel, 880 S. Westlake Boulevard, Westlake Village, California
on July 9, 1999 at 10:00 a.m., Pacific time, and at any adjournment thereof
(the "Meeting"). The Company expects to mail its proxy soliciting materials
for the Meeting on or about June 7, 1999.
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 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
attention of the Legal Department of the Company at its above address or by
attending the Meeting and voting in person.
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, 1999 is entitled to notice of and
to vote at the Meeting and at any adjournment or adjournments thereof. On that
date, there were 112,793,676 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. Broker non-votes are included in the determination of the number of
shares present and voting; however, they are not counted for purposes of
determining the number of votes cast with respect to a particular proposal.
Accordingly, broker non-votes are not counted as votes for or against the
proposal.
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 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 $7,000 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 and the Board has fixed the number
of directors at eight. The Company currently has eight 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 the Class III
directors, Angelo R. Mozilo and David S. Loeb, will expire at the Meeting.
Each of Messrs. Mozilo and Loeb has been nominated for election as a Class III
director for a new term which will expire at the annual meeting to be held in
2002.
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
---- ---------- --- --------
Nominees for Election--Term Expiring 2002 (Class III)
<S> <C> <C> <C>
Angelo R. Mozilo Chairman of the Board 60 1969
and Chief Executive Officer
of the Company
David S. Loeb President of the Company 75 1969
Incumbent Directors--Term Expiring 2000 (Class I)
Jeffrey M. Cunningham Chief Executive Officer 46 1998
Planet Direct
Andover, MA
Ben M. Enis Professor of Marketing (Retired) 57 1984
University of Southern California
Los Angeles, CA
Edwin Heller Attorney, Of Counsel, Fried, 69 1993
Frank, Harris, Shriver & Jacobson
New York, NY
Incumbent Directors--Term Expiring 2001 (Class II)
Robert J. Donato Senior Vice President, Branch Manager 59 1993
PaineWebber, Incorporated
Los Angeles, CA
Michael E. Dougherty Co-Founder and Chairman 58 1998
Dougherty Financial Group, LLC
Minneapolis, MN
Harley W. Snyder Senior Vice President, Real Estate 66 1991
Whiteco Industries, Inc.
Merrillville, IN
</TABLE>
2
<PAGE>
Angelo R. Mozilo is co-founder of the Company and has been Chairman of the
Board of the Company since March 1999 and Chief Executive Officer of the
Company since February 1998. Prior to his present position, he was Vice
Chairman of the Board and Executive Vice President of the Company, positions
which he held from the Company's formation in March 1969. Since February 1999,
Mr. Mozilo has served as Vice Chairman and President of IndyMac Mortgage
Holdings, Inc. ("IndyMac REIT"), formerly known as INMC Mortgage Holdings,
Inc., a publicly held real estate investment trust that was formerly managed
by a former subsidiary of the Company. He served as Chief Executive Officer of
IndyMac REIT from January 1997 to February 1999 and as the President of
IndyMac REIT from its formation in 1985 until he was appointed as Chief
Executive Officer in January 1997. Mr. Mozilo has been Vice Chairman of the
Board of Directors since 1993 and a director since October 1985 of IndyMac
REIT.
David S. Loeb is co-founder of the Company and has been President of the
Company since its formation in March 1969. He also served as the Chairman of
the Board of the Company from March 1969 to February 1999. Since its inception
in September 1985, Mr. Loeb has been Chairman of the Board of Directors of
IndyMac REIT. He also served as Chief Executive Officer of IndyMac REIT from
September 1985 to January 1997.
Jeffrey M. Cunningham has been Chief Executive Officer of Planet Direct, a
personalized internet web service, since December 1998. From June 1998 to
November 1998, he served as Chief Executive Officer of Knowledge Universe. He
was a Group Publisher of Forbes Inc. from 1993 to 1998. From 1989 to 1993, he
was Worldwide Sales Director of Forbes Inc. He also serves as a director of
Data General Corporation, Schindler Holding Ltd. (Zurich) and PageNet. He is a
member of the Board of National Policy Association, co-chairman of the Global
Economic Council and Vice-Chairman of the International Center of New York.
Robert J. Donato has been Senior Vice President, Branch Manager, of
PaineWebber, Incorporated since October 1997. From January 1997 through
September 1997, he was the President of Freedom Advisors, Inc., an investment
advisor company. For more than five years prior, he held the position of
Executive Vice President, Director of Regional Institutional Sales for
PaineWebber, Incorporated.
Michael E. Dougherty is co-founder and Chairman of Dougherty Financial Group
LLC, formed in 1977. He also controls and operates six asset management,
securities and commercial lending businesses, including Voyageur Asset
Management LLC, Segall Bryant & Hamill, LP, The Clifton Group, Inc., Dougherty
Funding LLC and Itasca Business Credit LLC. He is a director of Dougherty
Summit LLC, a broker-dealer, the St. Paul Chamber Orchestra and the Fairview
System, formerly known as the University of Minnesota Health System. Mr.
Dougherty also serves as Co-Chairman of the Fairview System Board of Trustees.
Ben M. Enis is a marketing consultant and mediator. In 1998, he retired as
Professor of Marketing at the University of Southern California in Los
Angeles, California, a position he had held since 1982. He is also a director
of Protection One, Inc., a publicly traded company that provides security
alarm monitoring services for residential and small business subscribers.
Edwin Heller is an attorney and has been of counsel to the law firm of
Fried, Frank, Harris, Shriver & Jacobson since October 1996. Prior to his
current position, Mr. Heller was a partner in that law firm for more than five
years.
Since April 1997, Harley W. Snyder has served as Senior Vice President, Real
Estate, of Whiteco Industries, Inc., a company engaged in outdoor advertising,
family entertainment, hotels and restaurants, land development and
construction. Mr. Snyder also is, and for more than five years has been,
President of S-W Corporation, a land development company. He was a director of
Bank One, Merrillville, N.A. through April 1997 and currently
3
<PAGE>
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 organization since 1972.
The Board recommends that the stockholders vote FOR each of the nominees.
Board and Committee Meetings
During the fiscal year ended February 28, 1999 ("fiscal 1999"), the Board
held fifteen 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 fiscal
1999, with the exception of Mr. Cunningham.
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), Dougherty and Snyder are
members of this committee which met five times during fiscal 1999.
2. The Nominating Committee considers and recommends to the Board
proposals to be presented for action by the Company's stockholders, and
considers and reviews issues relating to the Company's proxy and the annual
meeting of stockholders, including the consideration of nominations to the
Board of Directors submitted 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), Cunningham and
Heller are members of this committee which met three times during fiscal
1999.
3. The Compensation Committee determines matters relating to compensation
of (a) the Chairman of the Board and Chief Executive Officer, and (b) the
President of the Company (Messrs. Mozilo and Loeb) as well as the other
three highest compensated executive officers and administers the Company's
stock option and other benefit plans. Messrs. Snyder (chairman), Donato and
Cunningham are members of this committee. The Compensation Committee met
seven times during fiscal 1999.
4. The Strategic Planning Committee examines long range planning issues
facing the Company and its 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), Dougherty
and Enis were members of this committee during fiscal 1999. The Strategic
Planning Committee met four times during fiscal 1999.
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 for serving on the Board and its committees. The annual fee paid to
directors is $48,500 (payable monthly in arrears for each month during which
an individual serves as a director of the Company) and each Board member
receives a fee of $950 for each regular meeting attended. In addition, the
chairman of each committee receives $5,000 per year for serving as chairman.
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. These options become
4
<PAGE>
exercisable one year after the grant date. On June 1, 1998, each non-employee
director received a stock option grant of 9,452 shares at an exercise price of
$46.7188 per share, which was the average of the high and low sales prices on
the New York Stock Exchange of the Company's Common Stock ("fair market
value") on the date of grant.
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. Cunningham, Donato, Dougherty and Snyder deferred fees during fiscal
1999. Directors who are elected to the Board on or after March 24, 1998 and
elect to participate in the plan have interest credited to their deferred fees
under the plan at a rate equal to the Moody's Seasoned Corporate Bond Index.
Directors who were serving as members of the Board prior to March 24, 1998 and
elect to participate in the plan can elect the interest rate credited to their
deferred fees under the plan at 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).
At a meeting held on January 21, 1999, the Board approved the issuance on
June 1, 1999 to each non-employee director of 1,000 shares of Common Stock of
the Company. The shares will be subject to restrictions on transfer which will
lapse over a three year period in approximately equal increments.
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>
Years of Service Monthly 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.
5
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company selected at the annual meeting of the
Board of Directors held July 23, 1998 to serve at the pleasure of the Board of
Directors or subsequently appointed are as follows:
<TABLE>
<CAPTION>
Employed
Name Age Office Since
---- --- ------ --------
<C> <C> <S> <C>
Angelo R. Mozilo............ 60 Chairman of the Board and Chief 1969
Executive Officer
David S. Loeb............... 75 President 1969
Stanford L. Kurland......... 46 Senior Managing Director and 1979
Chief Operating Officer
Kevin W. Bartlett........... 41 Managing Director, Secondary 1986
Marketing
Thomas H. Boone............. 44 Managing Director, Portfolio 1984
Services
Carlos M. Garcia............ 43 Managing Director, Finance, Chief 1984
Financial Officer and Chief
Accounting Officer
Marshall M. Gates........... 47 Managing Director, Developing 1988
Markets
Gregory A. Lumsden.......... 44 Managing Director, Originations 1983
David Sambol................ 39 Managing Director, Capital 1985
Markets
Sandor E. Samuels........... 46 Managing Director, Legal, General 1990
Counsel and Secretary
</TABLE>
Angelo R. Mozilo is co-founder of the Company and has been Chairman of the
Board of the Company since March 1999 and Chief Executive Officer of the
Company since February 1998. Prior to his present position, he was Vice
Chairman of the Board and Executive Vice President of the Company, positions
which he held from the Company's formation in March 1969. Since February 1999,
Mr. Mozilo has served as Vice Chairman and President of IndyMac REIT. He
served as Chief Executive Officer of IndyMac REIT from January 1997 to
February 1999 and as the President of IndyMac REIT from its formation in 1985
until he was appointed as Chief Executive Officer in January 1997. Mr. Mozilo
has been Vice Chairman of the Board of Directors since 1993 and a director
since October 1985 of IndyMac REIT.
David S. Loeb is co-founder of the Company and has been President of the
Company since its formation in March 1969. He also served as the Chairman of
the Board of the Company from March 1969 to February 1999. Since its inception
in September 1985, Mr. Loeb has been Chairman of the Board of IndyMac REIT. He
also served as Chief Executive Officer of IndyMac REIT from September 1985 to
January 1997.
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. Mr. Kurland served as President and Chief Operating
Officer of Countrywide Home Loans, Inc. ("CHL"), the Company's subsidiary
engaged in mortgage lending and servicing, from March 1995 to February 1999
and assumed the role of Chief Executive Officer and President of CHL in March
1999.
Kevin W. Bartlett joined the Company in 1986. He became a Managing Director
in May 1991. His title was changed to Managing Director, Secondary Marketing
in 1994.
Thomas H. Boone joined the Company as a Vice President in 1984 and became a
Managing Director in 1988. His title was changed to Managing Director, Chief
Loan Administration Officer in 1996 and to Managing Director, Portfolio
Services in September 1997.
6
<PAGE>
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. In March 1999, Mr. Garcia also assumed the role of Chief Operating
Officer of CHL in addition to his position of Managing Director, Finance of
CHL.
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 and to Managing Director, Developing
Markets in 1996. Since February 1997, Mr. Gates has also served as Executive
Vice Chairman and Chief Executive Officer of LandSafe, Inc., a subsidiary of
the Company which oversees loan closing services.
Gregory Lumsden joined the Company in 1983. He served as an Executive Vice
President of CHL from 1989 to 1996. In September 1996, he was appointed
Managing Director, Originations.
David Sambol joined the Company in 1985 and became Managing Director,
Capital Markets in July 1994. Since October 1993, he has also served as the
President and Chief Executive Officer of Countrywide Capital Markets, Inc., a
subsidiary of the Company which oversees the entities engaged in brokering
purchases and sales of mortgage loan servicing portfolios and underwriting and
trading mortgage-backed securities.
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.
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 March 15, 1999, (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 March 15, 1999).
<TABLE>
<CAPTION>
Number of Percent
Name and Address of Beneficial Owner Shares of Class
------------------------------------ ---------- --------
<S> <C> <C>
Neuberger & Berman LLC(/1/)........................... 15,735,802 13.97%
605 Third Avenue
New York, New York 10158
Oppenheimer Capital(/2/).............................. 9,110,514 8.09%
Oppenheimer Tower, World Financial Center
New York, New York 10281
</TABLE>
- --------
(1) Based upon a Schedule 13G dated as of February 10, 1999 filed with the
Securities and Exchange Commission.
(2) Based upon a Schedule 13G dated as of February 9, 1999 filed with the
Securities and Exchange Commission.
7
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following information sets forth the number of shares of the Company's
Common Stock beneficially owned as of March 15, 1999 by each of the Company's
directors, including the nominees for election as directors, the Company's
Chief Executive Officer, President and the three other most highly compensated
executive officers (the "named 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>
Angelo R. Mozilo.......... 403,458(/3/) 1,764,338 2,167,796 1.92%
David S. Loeb............. 1,191,361 1,388,844 2,580,205 2.29%
Jeffrey M. Cunningham..... 0 0 0
Robert J. Donato.......... 54,609 24,541 79,150
Michael E. Dougherty...... 10,000 0 10,000
Ben M. Enis............... 37,846 82,151 119,997
Edwin Heller.............. 1,088 24,541 25,629
Harley W. Snyder.......... 12,285 9,308 21,593
Stanford L. Kurland....... 131,977 368,547 500,524
Carlos M. Garcia.......... 65,163 296,947 362,110
David Sambol.............. 1,996 26,575 28,571
All directors and
executive officers as a
group
(16 persons)............. 1,993,325 4,524,516 6,517,841 5.79%
</TABLE>
- --------
(1) Represents shares subject to stock options that are exercisable on March
15, 1999 or become exercisable within 60 days of March 15, 1999.
(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 wife as to which Mr. Mozilo
disclaims beneficial ownership.
8
<PAGE>
EXECUTIVE COMPENSATION
Executive Compensation
The following table sets forth the cash compensation paid by the Company and
its subsidiaries to the named 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 Ended Other Annual Stock Option All Other
Principal Position February 28 Salary(/1/) Bonus(/2/) Compensation(/3/) Shares Compensation(/4/)
------------------ ----------- ----------- ---------- ----------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Angelo R. Mozilo........ 1999 $1,400,000 $3,935,821 $ 2,611 0 $705,193
Chairman of the 1998 1,400,000 3,636,746 24,346 0 388,603
Board and Chief 1997 1,212,973 2,885,549 33,870 1,364,093 183,275
Executive Officer
David S. Loeb........... 1999 1,300,000 3,935,821 1,921 0 292,544
President 1998 1,300,000 3,636,746 15,644 0 309,781
1997 1,214,770 2,885,549 23,018 1,364,093 277,574
Stanford L. Kurland..... 1999 744,187 1,195,740 1,921 135,000 90,769
Senior Managing 1998 708,750 1,212,445 15,406 150,025 88,796
Director and Chief 1997 675,000 903,295 20,025 150,000 93,806
Operating Officer
David Sambol............ 1999 360,500 724,700 521 30,000 26,913
Managing Director, 1998 343,750 643,875 4,511 35,025 26,270
Capital Markets 1997 318,750 492,228 5,819 35,000 21,643
Carlos M. Garcia........ 1999 375,250 324,221 473 35,000 38,273
Managing Director, 1998 360,500 312,814 5,520 40,025 38,576
Finance, Chief 1997 337,500 286,650 8,579 40,000 33,541
Financial Officer and
Chief Accounting
Officer
</TABLE>
- --------
(1) Amounts shown for the indicated fiscal year include amounts deferred at
the election of the named executive officer pursuant to the Company's
401(k) plan and the officer's deferred compensation plan.
(2) Amounts shown represent the dollar value of the bonus earned by the named
executive officer during the indicated fiscal year whether or not paid in
such fiscal year. Messrs. Mozilo's and Loeb's bonus amounts were awarded
pursuant to their employment agreements; Mr. Kurland's bonus amount was
awarded pursuant to the Company's Annual Incentive Plan; Mr. Sambol's
bonus amount was awarded pursuant to a formula which was approved by the
Compensation Committee; and Mr. Garcia's bonus amount was awarded pursuant
to a formula approved by the Compensation Committee.
(3) Amounts shown represent the portion of interest accrued on the account of
the named executive officer with respect to deferred compensation that
exceeds 120% of the applicable federal rate.
9
<PAGE>
(4) Amounts shown for fiscal 1999 consist of the following: (i) Mr. Mozilo:
Company contribution to 401(k) Plan--$4,800; Company contribution to
deferred compensation account--$195,000; Company paid life insurance
premiums--$505,393; (ii) Mr. Loeb: Company contribution to deferred
compensation account--$227,500; Company paid life insurance premiums--
$65,044; (iii) Mr. Kurland: Company contribution to 401(k) Plan--$4,800;
Company contribution to deferred compensation account--$53,156; Company
paid life insurance premiums--$32,813; (iv) Mr. Sambol: Company
contribution to 401(k) Plan--$4,800; Company contribution to deferred
compensation account--$8,750; Company paid life insurance premiums--
$13,363; and (v) Mr. Garcia: Company contribution to 401(k) Plan--$4,800;
Company contribution to deferred compensation account--$18,200; Company
paid life insurance premiums--$15,273.
The following table sets forth information on the stock options granted to
the named executive officers in fiscal 1999.
STOCK OPTION GRANTS IN FISCAL YEAR 1999
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------------
Number of
Securities % of Total
Underlying Options Granted
Options to Employees in Exercise Price Expiration Grant Date
Name Granted(/1/) Fiscal Year ($/Share)(/2/) Date Present Value(/3/)
---- ------------ --------------- -------------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Angelo R. Mozilo........ 0 0% N/A N/A N/A
David S. Loeb........... 0 0 N/A N/A N/A
Stanford L. Kurland..... 135,000 8.19 $46.7188 6/1/2008 $1,343,844
David Sambol............ 30,000 1.82 46.7188 6/1/2008 298,632
Carlos M. Garcia........ 35,000 2.13 46.7188 6/1/2008 348,404
</TABLE>
- --------
(1) All options become exercisable at the rate of 25% on each of the first,
second, third and fourth anniversaries 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, 1998.
(3) The present value of the options as of their grant dates was calculated
using the Black-Scholes single option model. The assumptions used in the
model were: expected volatility of 31.3%, risk-free rate of return
(approximately equal to the five-year Treasury rate at the grant date) of
6.216%, dividend yield of 1.128% and time to exercise of five 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.
10
<PAGE>
The following table sets forth information on stock option exercises by
named executive officers' during fiscal 1999 and outstanding options and their
value at February 28, 1999. 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, as applicable.
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 28, 1999 February 28, 1999
Acquired Value ------------------------- -------------------------
Name on Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Angelo R. Mozilo........ 0 $ 0 1,764,339 560,191 $31,271,816 $8,555,869
David S. Loeb........... 362,226 7,820,280 1,388,844 560,190 22,871,577 8,555,850
Stanford L. Kurland..... 111,754 5,009,986 368,547 334,498 7,009,014 2,568,398
David Sambol............ 50,000 1,691,475 26,576 76,249 389,151 593,464
Carlos M. Garcia........ 0 0 296,947 90,500 7,695,318 729,550
</TABLE>
Pension Plan
The following table illustrates annual pension benefits under the Company's
Defined Benefit Pension Plan (the "Pension Plan") for participants retiring in
1999 at age 65 payable in the form of a life annuity under various levels of
base 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
------------------------------------------
Remuneration(/1/) 10 15 20 25 30 35
----------------- ------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
$ 250,000........................ 23,200 39,580 57,090 72,420 87,740 103,060
300,000......................... 23,200 39,580 57,090 72,420 87,740 103,060
400,000......................... 23,200 39,580 57,090 72,420 87,740 103,060
450,000......................... 23,200 39,580 57,090 72,420 87,740 103,060
500,000......................... 23,200 39,580 57,090 72,420 87,740 103,060
1,000,000........................ 23,200 39,580 57,090 72,420 87,740 103,060
1,200,000........................ 23,200 39,580 57,090 72,420 87,740 103,060
</TABLE>
- --------
(1) As the result of a limitation under the Internal Revenue Code of 1986, as
amended (the "Code"), annual compensation in excess of $160,000 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 $160,000
limitation under the Code. Benefits are 100% vested after five years of
service. Certain provisions in the Pension Plan become effective upon a Change
in Control (as defined in the Pension Plan). These provisions prevent the
Pension Plan from being amended in a way that would negatively impact
participants and allow a participant to become fully vested if terminated for
reasons other than Cause (as defined in the Pension Plan) within two years
following a Change in Control. The years of credited service under the Pension
Plan for the named executive officers are: Angelo R. Mozilo, 30; David S.
Loeb, 30; Stanford L. Kurland, 19; David Sambol, 13; and Carlos M. Garcia, 14.
11
<PAGE>
The Company adopted a Supplemental Executive Retirement Plan (the "SERP"),
effective in the fiscal year ended February 28, 1995, designed to provide
certain 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. In November 1997, the Compensation Committee of
the Board approved an amendment to the SERP to modify the benefit amount to
60% from 70% for new participants in the SERP and in January 1999, the
Compensation Committee approved an amendment reducing the benefit amount from
60% to 33.3% for new participants. Benefits under the SERP are reduced by
benefits the participant receives from (i) the estimated Pension Plan and (ii)
the Company's contributions to the participant's deferred compensation
account. The estimated annual benefit under the SERP will be: for Messrs.
Mozilo, Kurland, Sambol and Garcia (assuming retirement at age 65), $351,516,
$375,004, $438,027 and $233,452, respectively; and for Mr. Loeb (assuming
retirement at age 75), $428,623.
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.
Employment Agreements
The Company has entered into employment agreements with Messrs. Mozilo, Loeb
and Kurland which provide for certain compensation, death, disability and
termination benefits.
As of March 26, 1996, the Company amended and restated the employment
agreement with Angelo R. Mozilo, Chairman of the Board and Chief Executive
Officer of the Company. In February 1998, Mr. Mozilo's employment agreement,
which had provided that he serve as Vice Chairman and Executive Vice
President, was amended to reflect Mr. Mozilo's promotion to Chief Executive
Officer and Vice Chairman. Effective as of March 1, 1999, Mr. Mozilo was
appointed Chairman of the Board and Chief Executive Officer of the Company.
Mr. Mozilo's employment agreement provides for the retention of his services
for the period commencing July 10, 1996 and terminating on February 28, 2001.
Mr. Mozilo's employment agreement provides for a base salary of $1,400,000 per
year through February 28, 2001. His employment agreement provides for
additional incentive compensation in each year during the term thereof
beginning in the fiscal year ended February 28, 1997 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.
Mr. Loeb's employment agreement, which had provided that he serve as
Chairman of the Board and President of the Company, was amended and restated
effective March 1, 1999 to provide that he serve solely as President of the
Company. Under his amended and restated employment agreement, Mr. Loeb's
services have been retained for the period commencing March 1, 1999 and ending
on March 1, 2000; provided, however, that Mr. Loeb's employment will
automatically be extended through March 1, 2001 in the event that a "change in
control" (as defined in Mr. Loeb's employment agreement) shall occur prior to
March 1, 2000. Under the terms of this agreement, Mr. Loeb's annual base
salary is $650,000. He is also entitled to additional incentive compensation
for (i) fiscal year 1999 in the form of an annual cash bonus pursuant to a
formula that multiplies Mr. Loeb's prior year's bonus by the ratio of the
current year's earnings per share over that of the previous year, (ii) the
fiscal year ending February 29, 2000 in the form of an annual cash bonus which
is an amount equal to twenty-five percent of the cash bonus payable to Mr.
Mozilo, as Chairman of the Board, and (iii) if the agreement is extended as
described above, for the fiscal year ending February 28, 2001 in the form of
an annual cash bonus equal to 25% of the amount of Mr. Loeb's annual cash
bonus for the fiscal year ended February 28, 1999.
12
<PAGE>
Pursuant to Mr. Mozilo's and Mr. Loeb's employment agreements then in
effect, the Company made a grant in fiscal 1997 to each of Messrs. Mozilo and
Loeb of stock options in respect of 1,000,000 shares of Common Stock which
vest ratably on each of the first three anniversaries of the grant date. Under
the current employment agreement for Mr. Mozilo, the Compensation Committee is
authorized to grant stock options, in amounts to be determined by the
Compensation Committee, to Mr. Mozilo in respect of the fiscal years ending in
2000 and 2001. Under his agreement, Mr. Loeb will be eligible to receive stock
options at the same time during calendar year 2000 (but in no event later than
June 30, 2000) as the Company grants options to its senior executives
generally for that number of shares of Common Stock equal to the lesser of (i)
twenty-five percent of the number of shares of Common Stock subject to stock
options granted to Mr. Mozilo, as Chairman of the Board or (ii) eighty-five
thousand.
The Company has also entered into an employment agreement with Stanford L.
Kurland, Senior Managing Director and Chief Operating Officer of the Company,
and President and Chief Executive Officer of CHL, providing for certain
compensation, death, disability and termination benefits. Mr. Kurland's
employment agreement is effective as of March 1, 1999 and provides for the
retention of Mr. Kurland's services through February 28, 2002. The employment
agreement provides for a base annual salary for Mr. Kurland of $781,396 for
fiscal year 2000 with an increase of no less than 5% or more than 10% for
fiscal years 2001 and 2002 as may be approved by the Compensation Committee,
based on the recommendation of Mr. Mozilo. 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 as determined in
accordance with the Annual Incentive Plan which was approved by the
stockholders at the 1996 annual meeting. See "Executive Compensation--Annual
Incentive Plan" below. The agreement also provides for additional incentive
compensation in the form of grants of stock options under any stock option
plans which may exist 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 100,000 and no greater than 250,000 shares of the Company's
Common Stock.
Messrs. Mozilo's and Kurland's employment agreements each provide that in
the event of disability, he shall receive annual compensation in an 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 are to 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 employment agreement,
the Company is required to pay to his beneficiary an amount equal to the
officer's salary for 12 months following the date of death and to provide to
such beneficiary certain other rights or benefits to which the officer would
otherwise have been entitled. Messrs. Mozilo's and Kurland's employment
agreements each provides for certain benefits in the event of termination
without cause (as defined in each of the employment agreements) or if the
officer terminates his employment under specified conditions.
Annual Incentive Plan
The Company has in place an Annual Incentive Plan which was approved by the
Company's stockholders at the 1996 annual meeting. The purposes of the Annual
Incentive Plan are to promote the profitability of the Company, provide
officers an opportunity to receive incentive compensation depending upon that
profitability and to attract, retain and motivate such individuals. 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 29, 2000.
13
<PAGE>
Change in Control Arrangements
On September 12, 1996, the Compensation Committee approved a Change in
Control Severance Plan (the "Severance Plan") which provides for a salary
continuation payment and certain other benefits for eligible employees whose
employment with the Company is terminated involuntarily after a Change in
Control (as defined in the Severance Plan) or who leave the Company following
a Change in Control if a specified change in their compensation, position or
employment location occurs. Employees who are eligible to participate in the
Severance Plan include all active, full-time employees other than employees
who are covered under an individual employment or severance agreement which
provides for compensation and/or benefits upon termination of employment. The
amount of the separation payment is based on the employee's title and status
as an exempt or non-exempt employee within the meaning of the wage and hour
laws. In the event of a Change in Control, Messrs. Garcia and Sambol would be
entitled to participate in the Severance Plan and they would each be entitled
to receive a salary separation payment of two years of their base pay plus
200% of their average bonus as determined in accordance with the Severance
Plan. In addition, they would be entitled to receive medical, dental, vision
and prescription drug benefits, life insurance and other death benefits
coverage for a period of two years following the date of termination.
Compensation Committee Report on Executive Compensation
The Compensation Committee is composed of Messrs. Snyder, Donato and
Cunningham, 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.
Compensation of Chief Executive Officer, President and Chief Operating
Officer
Compensation for fiscal 1999 for Messrs. Mozilo, Loeb, and Kurland was
determined under their respective employment agreements. See "Executive
Compensation--Employment Agreements." Under these Agreements, neither Mr.
Mozilo nor Mr. Loeb received any stock option grants in fiscal 1999 because
they each received in the fiscal year ended February 28, 1997 a grant of stock
options in respect of 1,000,000 shares of Common Stock in lieu of receiving
grants in the fiscal years ended February 28, 1998 and 1999. Pursuant to his
employment agreement, Mr. Kurland received in fiscal 1999 a grant of stock
options in respect of 135,000 shares which are exercisable at the rate of 25%
on each of the first, second, third, and fourth anniversaries of the grant
date.
As provided by their employment agreements in effect for fiscal 1999, the
annual incentives received by Messrs. Mozilo and Loeb were determined by
multiplying the prior year's annual incentive by a performance ratio obtained
by dividing the most recent fiscal year's earnings per share by the prior
year's earnings per share. The performance ratio for the annual incentives
paid with respect to fiscal 1999 was calculated by comparing earnings per
share for fiscal 1999 with the fiscal year ended February 28, 1998. Mr.
Kurland's annual incentive was determined pursuant to the Annual Incentive
Plan which provides that Mr. Kurland will be awarded from 0% to 275% of a
specified target bonus, subject to the satisfaction of certain earnings per
share and return on equity goals. Earnings per share increased in fiscal 1999
compared to fiscal 1998 resulting in an increase in the annual incentives paid
to Messrs. Mozilo, Loeb, and Kurland with respect to fiscal 1999.
14
<PAGE>
Compensation of Other Executives for Fiscal 1999
With respect to the base salaries and annual incentives for fiscal 1999 for
the two most highly paid executives excluding Messrs. Mozilo, Loeb, and
Kurland, the Compensation Committee met with senior management to review
recommendations regarding their base salaries and annual incentive levels. The
decisions of the Compensation Committee with respect to the base salary 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, and an
assessment of the future contributions the executive should be able to make to
the Company. The annual incentives paid to Messrs. Sambol and Garcia were
approved by the Compensation Committee and were based on a plan which was
approved by that Committee.
Stock Options for Fiscal 1999
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.
The stock options granted in fiscal 1999 equaled 1.46% of the outstanding
stock of the Company at the end of the fiscal year.
Options were granted to executive officers on June 1, 1998 based on the
performance of the Company in fiscal 1998 compared to the performance in
fiscal 1997.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limits the corporate deduction
for compensation paid to the executive officers named in the Summary
Compensation Table to $1 million unless such compensation qualifies as
"performance-based compensation" which, among other things, requires approval
by the Company's stockholders. The incentive compensation arrangements for
fiscal 1999 applicable to Messrs. Mozilo, Loeb, and Kurland were approved by
the Company's stockholders at the Annual Meeting of Stockholders held on July
10, 1996 and otherwise qualify as "performance-based compensation." Therefore,
all amounts paid to Messrs. Mozilo, Loeb, and Kurland as incentive
compensation for fiscal 1999 are deductible although they exceed $1 million.
The Committee recognizes that the base salaries of Messrs. Mozilo and Loeb
will not be deductible to the extent they exceed $1 million, but considers
this additional amount not to be significant to the Company.
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
Jeffrey M. Cunningham
15
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Messrs. Snyder (chairman), Donato and
Cunningham. As noted below in the "Certain Transactions" section, Mr. Donato
had one loan outstanding under a plan maintained by the Company, which was
ratified and approved by the stockholders, to facilitate the exercise of stock
options (the "Financing Plan"). This loan, which was funded on November 17,
1997, bore an interest rate of 5.69% and was repaid in July 1998. Mr. Donato's
highest aggregate indebtedness to the Company under that loan during fiscal
1999 was $93,857, which amount was outstanding prior to repayment in July
1998. During fiscal 1999, Mr. Snyder had one mortgage loan outstanding with
the Company which was repaid in June 1998. This loan was in the initial
principal amount of $496,000 and bore interest at the rate of 7% per annum.
Mr. Snyder's highest aggregate indebtedness to the Company under this loan
during fiscal 1999 was $484,621 which was the amount outstanding as of March
1, 1998.
No member of the Compensation Committee was, during fiscal 1999, 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. Also, during that year, 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.
16
<PAGE>
PERFORMANCE GRAPH
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, 1994 in each of the Company, the S&P 500 Index and
the S&P Financial Index. The results and comparisons shown in the graph below
are based upon historical data and are not indicative of, nor intended to
forecast future performance of, the Company's Common Stock.
COMPARISON OF FIVE-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 COUNTRYWIDE S&P S&P
(Fiscal Year Covered) CREIT 500 INDEX FINANCIAL INDEX
- ------------------- ---------- --------- ---------------
<S> <C> <C> <C>
Measurement Pt- 1994 $100.00 $100.00 $100.00
1995 $100.00 $107.00 $109.00
1996 $131.00 $145.00 $160.00
1997 $184.00 $182.00 $227.00
1998 $283.00 $246.00 $317.00
1999 $243.00 $295.00 $344.00
</TABLE>
17
<PAGE>
CERTAIN TRANSACTIONS
Transactions Involving IndyMac REIT and IndyMac, Inc.
Messrs. Mozilo and Loeb, who serve as directors and executive officers of
the Company, also serve as directors and executive officers of IndyMac REIT.
In connection with the restructuring of their business relationship in July
1997, Countrywide Asset Management Corporation, formerly a wholly owned
subsidiary of the Company was merged into IndyMac REIT and the Company
received 3,440,800 newly issued shares of common stock of IndyMac REIT. In
addition, in connection with the restructuring, the Company received the right
to purchase from IndyMac REIT the right (the "Right of First Offer") to
purchase from IndyMac REIT in an offering (an "Offering") of voting capital
stock (or a security convertible or exchangeable into or exercisable for
voting capital stock) such number of shares of the capital stock as may be
required for the Company to maintain its then proportionate voting interest in
IndyMac REIT. Any purchase by the Company pursuant to the Right of First Offer
must be on the same terms and conditions applicable to other purchasers in the
Offering.
Messrs. Mozilo and Loeb and two other officers of the Company also serve as
directors of IndyMac, Inc. ("IndyMac"). IndyMac REIT owns all of the
outstanding preferred stock of IndyMac and CHL owns all of the outstanding
common stock of IndyMac.
The following describes certain transactions involving the Company, CHL,
IndyMac REIT and IndyMac during fiscal 1999.
In connection with the restructuring described above, the Company entered
into a Cooperation Agreement with IndyMac REIT and IndyMac whereby the Company
and certain affiliates agreed to provide certain services to IndyMac REIT and
IndyMac during a transition period. The Cooperation Agreement requires IndyMac
REIT and IndyMac to pay the Company for these services. In fiscal 1999, total
charges incurred by IndyMac REIT and/or IndyMac for services provided by the
Company under the Cooperation Agreement were $2.6 million.
Pursuant to a Mortgage Loan Purchase and Servicing Agreement dated as of
August 21, 1998, as amended, CHL sold to IndyMac REIT mortgage loans with an
aggregate unpaid principal balance of $460 million. These loans were sold on a
servicing retained basis.
Pursuant to the 1987 Amended and Restated Servicing Agreement dated as of
May 15, 1987, as amended (the "Servicing Agreement"), CHL services certain
mortgage loans for IndyMac REIT. Under the Servicing Agreement, CHL is
entitled to retain a servicing fee of $6.25 per loan for "A" paper loans and
$15.00 per loan for subprime loans. CHL earned servicing fees for all mortgage
loans serviced by it on behalf of IndyMac REIT of approximately $1.7 million
for the year ended February 28, 1999.
CHL also purchased from IndyMac REIT mortgage loans with an aggregate unpaid
principal balance of $76.4 million pursuant to two separate Mortgage Loan
Purchase and Servicing Agreements dated as of October 23, 1998 and January 15,
1999, respectively.
In November 1998, CHL entered into an Assignment and Assumption Agreement
pursuant to which CHL assumed certain IndyMac recourse obligations with
respect to the underlying mortgage loans which IndyMac had previously sold to
the Federal Home Loan Mortgage Corporation. In consideration of CHL's
assumption of these recourse obligations, IndyMac paid CHL a total of $6.0
million. Of this amount, a portion is reimbursable to IndyMac based upon
actual loss experience on the loans.
In October 1998, CHL purchased from IndyMac REIT for $35.5 million the
servicing rights related to a loan portfolio with an aggregate unpaid
principal balance of $2.7 billion. IndyMac REIT had previously entered
18
<PAGE>
into an agreement to acquire, but did not take delivery of, these servicing
rights from Flagstar Bank, FSB, a federally chartered savings and loan.
Countrywide Servicing Exchange, a subsidiary of the Company, represented
Flagstar Bank, FSB in the initial sale to IndyMac REIT.
During 1997, IndyMac REIT and IndyMac entered into a sublease agreement for
their corporate headquarters with the Company, while at the same time, the
Company subleased space from IndyMac REIT and IndyMac in their former
headquarters. As a result, IndyMac REIT and IndyMac paid the Company $3.4
million in fiscal 1999 and the Company paid IndyMac REIT and IndyMac $378,000
in fiscal 1999 for payments under these sublease arrangements.
Countrywide Securities Corporation, an indirect subsidiary of the Company,
provided brokerage services to IndyMac REIT and IndyMac in connection with the
sale of mortgage loans and/or servicing rights. The total fees paid to
Countrywide Securities Corporation by IndyMac REIT and IndyMac for these
services during fiscal 1999 were $572,000.
Transactions Involving Officers and Directors
During fiscal 1999, Mr. Loeb had one loan outstanding under the Financing
Plan. As of February 28, 1999, the amount of his loan remaining outstanding
was $224,047, which amount was the highest aggregate indebtedness to the
Company during fiscal 1999. The loan bears an annual interest rate of 3.25%.
On May 14, 1999, Mr. Loeb repaid $225,381.37, which was the amount outstanding
as of that date.
Mr. Donato had one loan under the Financing Plan during fiscal 1999, with an
interest rate of 5.69%. Mr. Donato's highest aggregate indebtedness to the
Company during fiscal 1999 under this loan was $93,857 as of July 1998, at
which time he repaid the entire balance.
During fiscal 1999, Harley Snyder had one mortgage loan outstanding which
was held by the Company. It was paid in full in June 1998. The loan was in the
initial principal amount of $496,000 with interest payable at 7% per annum.
This loan was secured by real property located in Indian Wells, California.
Mr. Snyder's highest aggregate indebtedness to the Company under this loan
during fiscal 1999 was $484,621, which was the amount outstanding as of March
1, 1998.
Mr. Samuels had three loans outstanding under the Financing Plan during
fiscal 1999. His highest aggregate indebtedness to the Company during fiscal
1999 was $203,648, which amount was outstanding as of February 28, 1999. The
three loans bear interest rates of 5.11%, 5.62% and 3.25%, respectively.
Mr. Heller is of counsel in the law firm of Fried, Frank, Harris, Shriver &
Jacobson. This firm performed services for the Company in fiscal 1999, and the
Company intends to retain the services of this firm in fiscal year ending
February 29, 2000.
19
<PAGE>
PROPOSAL TWO
APPROVAL OF
COUNTRYWIDE CREDIT INDUSTRIES, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
The stockholders are being asked to approve the Company's 1999 Employee
Stock Purchase Plan (the "Purchase Plan") under which 500,000 shares of the
Company's Common Stock initially will be reserved for issuance. The Purchase
Plan was adopted by the Board of Directors on March 24, 1999, was amended on
May 6, 1999 and will become effective on October 1, 1999, provided this
Proposal Two is approved at the Annual Meeting.
The Purchase Plan is designed to allow eligible employees of the Company and
participating subsidiaries (whether now existing or subsequently established)
to purchase shares of Common Stock periodically through their accumulated
payroll deductions during Offerings (as defined below) under the Purchase
Plan.
It is the intention of the Company that the Purchase Plan qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code.
The Purchase Plan is not subject to any provision of the Employee Retirement
Income Security Act of 1974, as amended.
Description of the 1999 Employee Stock Purchase Plan
The following is a summary description of the Purchase Plan. Capitalized
terms used but not otherwise defined herein shall have meanings ascribed to
them in the Purchase Plan.
Administration
The Purchase Plan will be administered by the Compensation Committee. The
Compensation Committee, as Plan Administrator, will have full authority to
adopt administrative rules and procedures and to interpret the provisions of
the Purchase Plan.
Securities Subject To The Purchase Plan
The number of shares of Common Stock initially reserved for issuance under
the Purchase Plan will be limited to 500,000 shares. The shares issuable under
the Purchase Plan will be made available from authorized but unissued shares
of the Company's Common Stock.
In the event that any change is made to the outstanding Common Stock
(whether by reason of any recapitalization, stock dividend, stock split,
exchange or combination of shares or other change in corporate structure),
appropriate adjustments will be made to (i) the maximum number and class of
securities issuable under the Purchase Plan, (ii) the maximum number and class
of securities purchasable per participant during any Offering, and (iii) the
number and class of securities and the price per share in effect under each
outstanding purchase right. Such adjustments will be designed to preclude any
dilution or enlargement of benefits under the Purchase Plan or the outstanding
purchase rights thereunder.
Eligibility
Each employee of the Company and its Participating Subsidiary Corporations
will be eligible to participate in the Purchase Plan, provided, however, that
with respect to any Offering, the Compensation Committee may
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exclude from participation any employee or group of employees that are
permitted to be excluded from participation pursuant to Section 423 of the
Internal Revenue Code and the regulations promulgated and proposed thereunder.
In addition, no employee will be granted a purchase right under the Purchase
Plan (a) if, immediately after the grant, such employee, taking into account
stock owned by any other person whose stock would be attributed to such
employee pursuant to Section 424(d) of the Internal Revenue Code, would own
stock and/or hold outstanding options to purchase stock possessing 5% or more
of the total combined voting power or value of all classes of stock of the
Company, or (b) which permits the employee to purchase, in any calendar year
in which the purchase right is outstanding, more than $25,000 worth of stock
based on the fair market value of the shares at the time such purchase right
is granted. The fair market value per share of Common Stock on any particular
date under the Purchase Plan will be deemed to be equal to the average of the
high and low sales price per share of Common Stock on such date on the New
York Stock Exchange.
Offering Periods And Purchase Rights
Shares of Common Stock will be offered from time to time under the Purchase
Plan through a series of offerings, each with a minimum duration of 3 months
and a maximum duration of 12 months as determined by the Compensation
Committee ("Offerings"). The Offerings will commence as designated from time
to time by the Compensation Committee. The first day of an Offering is the
"Offering Commencement Date" and the last day is the "Offering Termination
Date." Each Offering Commencement Date and Offering Termination Date shall in
all cases occur on a business day.
On the Offering Commencement Date of each Offering, each eligible employee
who elects to participate in the Purchase Plan with respect to that Offering
will be granted a purchase right to acquire shares of Common Stock through
payroll deductions made during that Offering. The purchase date of shares
purchased in connection with each Offering will occur on the Offering
Termination Date with respect to such Offering, and all payroll deductions
collected from the participant for the Offering ending on such date will
automatically be applied to the purchase of the number of full shares of
Common Stock which the participant's payroll deduction will purchase at the
offering price applicable to that Offering. Notwithstanding the foregoing, no
participant may purchase more than 3,000 shares of Common Stock during any
Offering.
Offering Price
The price per share of the Common Stock acquired in connection with any
Offering will be determined by the Compensation Committee, but shall in no
event be less than 85% of the lower of (i) the fair market value per share of
Common Stock on the Offering Commencement Date of that Offering, and (ii) the
fair market value on the Offering Termination Date of that Offering. Prior to
the commencement of an Offering, the Compensation Committee shall determine
the amount of the price discount, if any, which will apply to shares of Common
Stock to be purchased at the end of such Offering. On April 1, 1999, the fair
market value of a share of Common Stock was $37.91.
Payroll Deductions And Stock Purchases
Each participant may authorize periodic payroll deductions in an amount not
exceeding ten percent (10%) (or such other percent or fixed dollar amount
which the Board or Compensation Committee may from time to time determine) of
his or her gross cash wage, salary and overtime earnings, production bonus
payments and compensation paid in a form other than cash (excluding
discretionary bonus payments and reimbursements for
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out-of-pocket expenses) ("Compensation") for each pay period during an
Offering. These payroll deductions will be credited to an account established
for that participant and will be applied to the acquisition of Common Stock on
the Offering Termination Date of the applicable Offering. Accordingly, on each
Offering Termination Date, the accumulated payroll deductions of each
participant will automatically be applied to the purchase of shares of Common
Stock at the price in effect for that Offering.
A participant may elect to reduce or increase future payroll deductions. The
effective date of any such increase or reduction will be the first day of the
next Offering following the Company's timely receipt of the change form or
such earlier date as the Compensation Committee shall determine.
Each participant's purchase right will be deemed to have been exercised
automatically on the applicable Offering Termination Date for the purchase of
the number of full shares of Common Stock which the accumulated payroll
deductions in the participant's account at the time will purchase at the
applicable offering price.
Fractional shares of Common Stock will not be issued under the Purchase
Plan. Any accumulated payroll deductions which would have been used to
purchase fractional shares, unless refunded as described below, will be held
for the purchase of Common Stock in the next following Offering, without
interest.
Termination Of Participation/Withdrawal
A participant may withdraw from the Purchase Plan at any time by giving
written notice to the Plan Representative. Upon processing of any such written
notice, no further payroll deductions will be made from the participant's
Compensation during such Offering or thereafter, unless and until such
participant elects to resume participation. Such participant's payroll
deductions accumulated prior to processing of such notice to stop
participation shall be refunded (without interest) to such participant as soon
as reasonably practicable.
A participant's withdrawal from any Offering will not have any effect upon
such participant's eligibility to participate in any succeeding Offering.
A participant's participation in the Purchase Plan will immediately
terminate upon his or her cessation of employment or loss of eligible employee
status. Any payroll deductions which the participant may have accumulated
prior to such cessation of employment or loss of eligibility, if any, will be
refunded to such participant (or such participant's designated beneficiary, in
the event of such participant's death) and will not be applied to the purchase
of Common Stock.
Stockholder Rights
No participant will have any stockholder rights with respect to the shares
covered by his or her purchase rights unless and until (a) such purchase right
has been exercised, (b) the Company shall have issued and delivered the shares
of Common Stock to the participant, and (c) the participant's name shall have
been entered as a stockholder of record on the books of the Company. No
adjustment will be made for dividends, distributions or other rights for which
the record date is prior to the date of such purchase.
Resale Restrictions
The shares of Common Stock issued under the Purchase Plan may contain such
restrictions, terms and conditions as the Board or Compensation Committee may,
in its discretion, determine and the Board or the
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Compensation Committee may, in its discretion, require that an appropriate
legend be placed on the stock certificates evidencing such shares of Common
Stock.
Assignability
Neither payroll deductions credited to a participant's account nor purchase
rights under the Purchase Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company
may, in its discretion, treat such act as an election to withdraw from
participation in the Purchase Plan.
Change In Control
In the event of a Change in Control, the Offering Termination Date with
respect to the Offering in which the Change in Control would otherwise occur
will be accelerated to the last payday immediately preceding the Change in
Control and all outstanding purchase rights will automatically be exercised on
such Offering Termination Date.
Amendment And Termination
The Board shall have complete power and authority to terminate or amend the
Purchase Plan; provided however, that no termination, modification, or
amendment of the Purchase Plan may, without the consent of a participant then
having a purchase right under the Purchase Plan to purchase shares of Common
Stock, adversely affect the rights of such participant under such purchase
right, except that the foregoing shall not prohibit the Company from
terminating the Purchase Plan at any time (including during an Offering) and
applying the amounts theretofore withheld from participants to the purchase of
shares of Common Stock as if the termination date of the Purchase Plan were an
Offering Termination Date. Any cash balance remaining after the purchase of
shares of Common Stock in such Offering shall be refunded (without interest)
to such participant as soon as reasonably practicable.
Federal Tax Consequences
The Purchase Plan is intended to be an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue Code. Under a plan which so
qualifies, no taxable income will be recognized by a participant, and no
deductions will be allowable to the Company, upon either the grant or the
exercise of the purchase rights. Taxable income will not be recognized until
there is a sale or other disposition of the shares acquired under the Purchase
Plan.
If the participant sells or otherwise disposes of the purchased shares
within two years after the grant date of the purchase right with respect to
which such shares were acquired or within one year after the date on which
such shares were actually acquired, then the participant will recognize
ordinary income in the year of sale or disposition equal to the amount by
which the fair market value of the shares on the purchase date exceeded the
purchase price paid for those shares, and the Company will be entitled to an
income tax deduction, for the taxable year in which such disposition occurs,
equal in amount to such excess. If a participant sells or otherwise disposes
of the purchased shares within either such period at a price which is less
than the fair market value of those shares at the date of purchase, then the
participant will have a capital loss equal to the amount by which the purchase
date fair market value exceeds the sale price.
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If the participant sells or disposes of the purchased shares more than two
years after the grant date of the purchase right with respect to which the
shares were acquired and more than one year after the date on which such
shares were actually acquired, then the participant will recognize ordinary
income in the year of sale or disposition equal to the lesser of (i) the
amount by which the fair market value of the shares on the sale or disposition
date exceeded the purchase price paid for those shares, and (ii) the amount by
which the fair market value of the shares on the purchase date exceeded the
purchase price paid for those shares and any additional gain upon the
disposition will be taxed as a long-term capital gain. Any loss will be
treated as long-term capital loss. The Company will not be entitled to an
income tax deduction with respect to such disposition.
The foregoing general description of federal income tax consequences is
based upon federal income tax laws in effect on the date of this proxy
statement. This description does not purport to be complete, and does not
discuss foreign, state or local income tax consequences.
Accounting Treatment
Under current accounting principles applicable to employee stock purchase
plans qualified under Section 423 of the Internal Revenue Code, the issuance
of Common Stock under the Purchase Plan will not result in a compensation
expense chargeable against the Company's reported earnings. However, the
Company must disclose, in pro-forma statements to the Company's financial
statements, the impact the purchase rights granted under the Purchase Plan
would have upon the Company's reported earnings if the fair value of those
purchase rights were treated as compensation expense.
Vote Required
The affirmative vote of a majority of the outstanding voting shares of the
Company present or represented and entitled to vote at the Annual Meeting is
required for approval of the Purchase Plan. Should such stockholder approval
not be obtained, then the Purchase Plan will not be implemented.
New Plan Benefits
Because the benefits under the Purchase Plan will depend on employees'
elections to participate and the fair market value of Common Stock at various
future dates, it is not possible to determine the benefits that will be
received by executive officers and other employees if the Purchase Plan is
approved by stockholders. Non- employee directors are not eligible to
participate in the Purchase Plan.
The Board recommends that the stockholders vote FOR this proposal.
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PROPOSAL THREE
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 29, 2000. 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 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 fiscal 1999. Based solely on its review of the copies of the reports
received by it, the Company believes that all such filing requirements were
satisfied, except that Mr. Donato filed one late report relating to one
transaction. The failure to timely file such report was solely due to an
inadvertent error of the Company and not the reporting person.
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 28, 1999,
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 28, 1999, filed with the SEC,
including the financial statements and schedules thereto, without the
accompanying exhibits, by writing to Investor Relations, Countrywide Credit
Industries, Inc., 4500 Park Granada, MSN CH-19, Calabasas, California 91302-
1613, (818) 225-3550. 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.
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STOCKHOLDER PROPOSALS
Any proposal that a stockholder wishes to present for consideration at the
2000 Annual Meeting of Stockholders must be received by the Company no later
than February 8, 2000 for inclusion in the 2000 Notice of Annual Meeting,
Proxy Statement and Proxy. Any other proposal that a stockholder wishes to
bring before the 2000 Annual Meeting of Stockholders must also be received by
the Company no later than February 8, 2000. All proposals must comply with the
applicable requirements or conditions established by the Securities and
Exchange Commission and Article II, Section 13 of the Company's Bylaws, which
requires among other things, certain information to be provided in connection
with the submission of stockholder proposals. All proposals must be directed
to the Secretary of the Company at 4500 Park Granada, MSN CH-11, Calabasas,
California 91302.
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
June 1, 1999
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COUNTRYWIDE CREDIT INDUSTRIES, INC.
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting of Stockholders, July 9, 1999
The undersigned hereby appoints Angelo R. Mozilo and David S. Loeb, 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 Hyatt Westlake Plaza Hotel, 880 S. Westlake Boulevard,
Westlake Village, California on July 9, 1999 at 10:00 A.M. and any adjournment
thereof.
Receipt of copies of the Annual Report to Stockholders, the Notice of
Annual Meeting of Stockholders and the Proxy Statement dated June 1, 1999 is
hereby acknowledged.
(Continued and to be marked, dated and signed on reverse side)
COUNTRYWIDE CREDIT INDUSTRIES, INC.
P.O. BOX 11148
NEW YORK, N.Y. 10203-0148
Comments:
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UNMARKED PROXIES SHALL BE VOTED IN FAVOR OF EACH OF THE LISTED MATTERS UNLESS
SPECIFIED TO THE CONTRARY.
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<S> <C> <C> <C>
1. To elect to the Board of Directors for a FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
term expiring at the 2002 Annual Meeting. listed below. [_] for all nominees listed below. [_] [_]
Nominees: Angelo R. Mozilo and David S. Loeb
(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
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2. To adopt the Company's 1999 Employee Stock Purchase Plan. 3. To ratify the selection of Grant Thornton LLP as the
Independent Accountants to audit the Company's
FOR [_] AGAINST [_] ABSTAIN [_] financial statements for the fiscal year ending
February 29, 2000.
In their discretion, the proxies are authorized to vote upon FOR [_] AGAINST [_] ABSTAIN [_]
such other business as may properly come before the annual
meeting.
I PLAN TO ATTEND 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:
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Signature
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Signature
PLEASE RETURN PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.A.
Votes must be indicated (x) in Black or Blue ink. [X]
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