COUNTRYWIDE CREDIT INDUSTRIES, INC.
CHANGE IN CONTROL SEVERANCE PLAN
(As Amended and Restated September 11, 2000)
WHEREAS, the Board of Directors (the "Board") of Countrywide Credit
Industries, Inc., a Delaware corporation (the "Company"), originally adopted
this Plan on September 12, 1996, recognizing that the threat of an unsolicited
takeover or other change in control of the Company may occur which can result in
significant distractions of its personnel and disrupt the business of the
Company with respect to attracting and retaining employees of every level
because of the uncertainties inherent in such a situation; and
WHEREAS, the Board has determined that it is essential and in the best
interests of the Company and its shareholders to be able to retain the services
of its personnel at a time when the Company is considering its strategic
alternatives, including possible change in control transactions, in order to
ensure their continued dedication and efforts without undue concern for their
personal financial and employment security.
NOW, THEREFORE, in order to fulfill the above objectives, the following
plan has been developed and is hereby adopted.
1. Purpose
It is the purpose of the Company, through this Plan, to provide a
salary continuation payment and certain other benefits for each of its
employees who is a Participant in the Plan and (a) who separates from
service with the Company for Good Reason or (b) whose employment with
the Company is involuntarily terminated (other than for Cause, death or
an Excluded Termination), in either case, on or after the date on which
a Change in Control occurs and within the time limits specified in
Section 5.1.
2. Contractual Right
Upon and after a Change in Control, each Participant shall have a fully
vested, nonforfeitable contractual right, enforceable against the
Company, to the benefits provided for under Section 6 of this Plan upon
the conditions specified in Section 5.1. Such contractual right to
receive such benefits if the conditions specified in Section 5.1 are
fulfilled shall arise on the date on which the Change in Control
occurs.
3. Duration
This Plan shall be effective as of the date the Plan is approved by the
Board or such other date as the Board shall designate in its resolution
approving the Plan. The Plan shall continue in effect until terminated
in accordance with Section 9.
4. Definitions. For purposes of this Plan, the following
definitions shall apply: -----------
4.1 Affiliate: "Affiliate" shall mean with respect to any person
or entity, any entity, directly or indirectly, controlled by,
controlling or under common control with such person or
entity.
4.2 Board: "Board" shall mean the Board of Directors of
Countrywide Credit Industries, Inc. -----
4.3 Cause: "Cause" shall exist where the Participant (a)
intentionally and continually failed to perform reasonably
assigned duties, (b) willfully engaged in misconduct which is
demonstrably and materially injurious to the Company,
monetarily or otherwise , (c) engaged in a transaction in
connection with the performance of his or her duties to the
Company for personal profit to himself or herself or (d)
willfully violated any law, rule or regulation in connection
with the performance of his or her duties (other than traffic
violations or similar offenses). Failure by a Participant to
perform the Participant's duties during any period of
disability shall not constitute Cause.
4.4 Change in Control: A "Change in Control" shall mean the
occurrence during the term of this -----------------
Plan, of any one of the following events:
(a) An acquisition (other than directly from Company) of any
common stock or other "Voting Securities" (as hereinafter
defined) of Company 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 Company's common stock or
the combined voting power of Company'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 Plan, (1)
"Voting Securities" shall mean Company'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) the Company 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 the Company
(for purposes of this definition, a "Subsidiary"), (ii) the
Company 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 May 6, 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 the Company'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 Plan, 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-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 the Company, unless such merger,
consolidation or reorganization is a
"Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger,
consolidation or reorganization of the
Company where:
(A) the Company's stockholders, 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 Securities of the
Surviving Corporation, the board of directors of such
corporation; and
(C) no Person other than (i) the Company, (ii) any
Subsidiary, (iii) any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, 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 the Company, 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 the Company;
or
(iii) The sale or other disposition of all or
substantially all of the assets of the
Company 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 the Company 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 Person; 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 the Company, and after such
share acquisition by the Company, 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.
Notwithstanding anything to the contrary contained herein, if
the employment of a Participant is terminated (i) at the
request of a third party who has indicated an intention or
taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control or (ii)
otherwise in connection with, or in anticipation of, a Change
in Control which actually occurs, then for purposes of this
Plan the date of a Change in Control with respect to that
Participant shall be deemed to be the date immediately prior
to the date of the Participant's termination.
4.5 Company: "Company" shall mean Countrywide Credit Industries,
Inc. and any successor thereto, including, without limitation,
any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended),
partnership(s) or corporation(s) acquiring directly or
indirectly all or substantially all of the business or assets
of the Company.
4.6 Excluded Termination: "Excluded Termination" shall have
the meaning as set forth in Section --------------------
5.2 of this Plan.
4.7 Good Reason: A Participant shall have "Good Reason" for
terminating employment with the Company only if one or more of
the following occurs, within one year after a Change in
Control, without the Participant's express written consent:
(a) a reduction by the Company in the Participant's base
salary or the termination or reduction of award
opportunities (other than equity-based opportunities)
under any bonus or commission in which the
Participant participates unless a comparable
arrangement (embodied in an ongoing substitute or
alternative plan, practice or formula) has been made
with respect to the Participant's participation in
such bonus or commission; or
(b) for any Participant who immediately prior to the
Change in Control is a member of employee
classification A or B (as set forth in Appendix A), a
change in the Participant's title, position, duties
or responsibilities which represents an adverse
change from his or her title, position, duties or
responsibilities as in effect immediately prior to
such change; or
(c) the relocation of the office at which the Participant
is principally employed immediately prior to the
Change in Control to a location more than fifty (50)
miles from the location of such office, or the
Participant being required to be based anywhere other
than such office, except to the extent the
Participant was not previously assigned to a
principal location and except for required travel on
the Company's business to an extent substantially
consistent with the Participant's business travel
obligations at the time of the Change in Control.
(d) notwithstanding the foregoing, the Participant shall
not have Good Reason to terminate employment with the
Company (or otherwise have the right to claim that he
or she has been constructively terminated from
employment) due solely to the fact that the Company
shall cease to be a public company and shall become a
subsidiary of another publicly-traded corporation.
Any event described in Section 4.7(a), (b) or (c) which occurs
prior to a Change in Control but which the Executive
reasonably demonstrates to the Senior Human Resources Manager
(1) was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a
Change in Control or (2) otherwise arose in connection with,
or in anticipation of, a Change in Control, shall constitute
Good Reason for purposes of this Plan notwithstanding that it
occurred prior to a Change in Control.
Notwithstanding the foregoing, no action by the Company shall
give rise to Good Reason if it results from the Participant's
termination for Cause, death or an Excluded Termination.
4.8 Operating Unit: "Operating Unit" shall mean any
subsidiary, division or other business unit of
--------------
Company or any Affiliate.
4.9 Participant: "Participant" shall mean a full-time regular
employee of the Company or any of its subsidiaries who is
either active or on a legally protected leave of absence who,
on the date immediately preceding the date of a Change in
Control, is employed in one of the employee classifications
set forth in Appendix A. Employees of the Company who are
Managing Directors and above who are covered under individual
employment agreements shall not be Participants in this Plan.
4.10 Plan: "Plan" shall mean the Countrywide Credit
Industries, Inc. Change in Control Severance ----
Plan (As Amended and Restated September 11, 2000).
4.11 "Post-Transaction Good Reason" means with respect to offered
employment or the continued employment, as the case may be,
with a Post-Transaction Employer (as defined in Section 5.2)
following a Transaction (as defined in Section 5.2):
(a) a reduction in the Participant's annual base salary
or the termination or reduction of award
opportunities (other than equity-based opportunities)
under any bonus or commission plan in which the
Participant participates unless a comparable
arrangement (embodied in an ongoing substitute or
alternative plan, practice or formula) has been made
with respect to the Participant's participation in
such bonus or commission in either case below the
greater of the rate in effect (i) as of the date of
the Transaction or (ii) on any date following the
Transaction;
(b) for any Participant who immediately prior to the
Change in Control is a member of employee
classification A or B (as set forth in Appendix A), a
change in the Participant's title, position, duties
or responsibilities which represents an adverse
change from his or her title, position, duties or
responsibilities as in effect immediately prior to
such change, in any case as determined by the
Participant in Good Faith; or
(c) the relocation of the office at which the Participant
is principally employed immediately prior to the
Transaction to a location more than fifty (50) miles
from the location of such office, or the Participant
being required to be based anywhere other than such
office, except to the extent the Participant was not
previously assigned to a principal location and
except for required travel on the Company's business
to an extent substantially consistent with the
Participant's business travel obligations at the time
of the Transaction;
4.12 Senior Human Resources Manager: "Senior Human Resources
Manager" shall mean the Chief ------------------------------
Administrative Officer of the Company prior to a Change in
Control or such person's designee.
4.13 Severance Benefit: "Severance Benefit" shall mean the
benefits payable in accordance with -----------------
Section 6 of this Plan.
5. When Provisions Apply
5.1 The benefits provided for under Section 6 shall be provided to
each Participant who incurs a "Qualifying Termination." For
purposes of this Plan, a "Qualifying Termination" shall occur
only if a Change in Control occurs and
(a) within one year after the Change in Control occurs, the
Company terminates the Participant's employment other than
for Cause; or
(b) (i) within one year after the Change in Control occurs,
Good Reason occurs, and
(ii) the Participant terminates employment with the Company
within six months after the Good Reason occurs;
provided, however, that for any Participant who is a member of
employee classification A, the period of time described in
subparagraphs 5.1(a) and (b)(i) shall be twenty-four (24)
months; provided, further, however, notwithstanding any
provision in this Plan to the contrary, the period of time
described in subparagraphs 5.1 (a) and (b)(i) above shall be
extended an additional six months for Participants who are
members of employee classification B, C, D and E in the event
the Participant's employment is terminated in connection with
a consolidation of the facility (branch, etc.) employing the
Participant with another or a closing or shutdown of such
facility (branch, etc.); provided, further, however, that a
Qualifying Termination shall not occur if the Participant's
employment with the Company terminates by reason of Cause, the
Participant's death, or an Excluded Termination (as defined in
Section 5.2).
5.2 Sale of Business or Assets. If, following a Change in Control,
a Participant's employment with the Company and its Affiliates
terminates in connection with the sale, divestiture or other
disposition of any Operating Unit (or part thereof) (a
"Transaction"), such termination shall not be a termination of
employment of the Participant for purposes of the Plan, and
(notwithstanding the rights provided to the Participant by
Section 5.1) the Participant shall not be entitled to a
Severance Benefit as a result of such termination of
employment if (i) the Participant is offered continued
employment, or continues in employment, with the divested
Operating Unit or the purchaser of the assets of the Operating
Unit, as the case may be, (the "Post-Transaction Employer") or
their respective Affiliates on terms and conditions that would
not constitute Post-Transaction Good Reason and (ii) the
Company obtains an agreement from the acquiror of the stock or
assets of the divested Operating Unit, enforceable by the
Participant, to provide or cause the Post-Transaction Employer
to provide severance pay and benefits, if the Participant
accepts the offered employment or continues in employment with
the Post-Transaction Employer or its Affiliates following the
Transaction, (A) at least equal to the Severance Benefit and
(B) payable upon a termination of the Participant's employment
with the Post-Transaction Employer and its Affiliates within
the period described in Section 5.1 (or such part of it as is
then remaining) for any reason other than Cause, the
Participant's death or a termination by the Participant
without Post-Transaction Good Reason. For purposes of this
Section 5.2, the term Cause shall have the meaning ascribed to
it in Section 4.3, but the term Company as it is used in
Section 4.3 shall be deemed to refer to the entity employing
the Participant after the Transaction.
A termination of employment described in this Section 5.2 is
herein referred to as an "Excluded Termination." In the
circumstances described in this Section 5.2, the Participant
shall not be entitled to receive any Severance Benefit under
this Plan whether or not the Participant accepts the offered
employment or continues in employment. The provisions of this
Section 5.2 do not create any entitlement to any Severance
Benefit from the Company and its Affiliates in any
circumstances whatsoever and are to be construed solely as a
limitation on such entitlement in the circumstances herein set
forth.
5.3 The fact that a Participant is eligible to immediately receive
retirement benefits under the Countrywide Credit Industries,
Inc. Defined Benefit Pension Plan or any other Company
employee benefit plan, practice or policy shall not render him
or her ineligible for the benefits under this Plan.
6. Severance Benefits
6.1 Severance Payment
(a) Each Participant entitled to benefits under this Plan
shall receive as continuation of salary and bonus
and/or commission an amount as determined in
accordance with Appendix A reduced (but not below
zero) by the payments and benefits paid or payable
under an employment agreement or letter offering
employment as a result of or in connection with the
Qualifying Termination (the "Salary Separation
Payment").
For purposes of calculating the Salary Separation
Payment, (1) the Participant's "Base Pay" shall be
the Participant's base annual salary as of the date
of his or her termination of employment or, if
greater, as of the date on which the Change in
Control occurs and (2) the Participant's " Bonus"
shall be the greater of (x) the average of the
aggregate bonus and/or commission, if any, paid or
payable to the Participant for each of the two (2)
fiscal years preceding the fiscal year in which the
Participant's termination of employment occurs (or
such fewer number of fiscal years for which the
Participant was eligible to receive a bonus and/or
commission and (y) the bonus and/or commission paid
for the fiscal year immediately preceding the date of
the Change in Control.
(b) Except as required by Section 7, the Salary Separation
Payment provided for in Section 6.1(a) shall be payable in
addition to, and not in lieu of, all other accrued, vested,
earned, or deferred compensation rights, options, or other
benefits (other than severance pay or similar benefits)
which may be payable or owing to a Participant following
termination of his or her employment under any plan,
including but not limited to retirement and supplemental
retirement benefits, bonus, accrued vacation or sick pay,
compensation, or benefits payable under any of the Company's
employee benefit plans, practices or policies.
(c) The Salary Separation Payment shall not be offset or
reduced by any unemployment insurance benefit,
payment in lieu of notice required under any law or
act, or income from subsequent employment that the
Participant may receive.
6.2 The period used in computing the Salary Separation Payment
pursuant to Section 6.1(a)(the "Salary Separation Pay Period")
shall be included as accredited service for the purpose of
receiving or accruing benefits under all employee benefit
plans of the Company, including, but not limited to, group
health and life insurance, long-term disability, the
Countrywide Credit Industries, Inc. Defined Benefit Pension
Plan, the Countrywide Credit Industries, Inc. Tax Deferred
Savings and Investment Plan, the Countrywide Credit
Industries, Inc. Supplemental Executive Retirement Plan and
the Countrywide Credit Industries, Inc. Deferred Compensation
Plan.
6.3 For the period equal to the Salary Separation Pay Period and
commencing on the date of Participant's termination of
employment (the "Continuation Period"), the Company shall at
its expense (and without contribution by the Participant)
continue on behalf of the Participant and his or her
dependents and beneficiaries (a) medical, health, dental and
prescription drug benefits, (b) short and long-term disability
coverage, (c) life insurance and other death benefits coverage
and (d) individual outplacement services for members of
employee classification A and B (as set forth in Appendix A)
and outplacement services at a level to be determined by the
Senior Human Resources Manager for employee classification C,
D and E. For a period of thirty-six (36) months for members of
employee classification A, and commencing on the date of
Participant's Qualifying Termination, the Company shall at its
expense (and without contribution by the Participant)
continue, on behalf of the Participant, financial planning,
executive medical examination program and executive long term
disability. The coverages and benefits (including deductibles,
if any) provided under this Section 6.3 during the
Continuation Period shall be no less favorable in the
aggregate to the Participant and his or her beneficiaries than
the most favorable of such coverages and benefits provided the
Participant and his or her dependents during the 90-day period
immediately preceding the Change in Control or as of any date
following the Change in Control but preceding the date of
Participant's termination. The obligation under this Section
6.3 with respect to the foregoing benefits shall be limited if
the Participant obtains any such benefits pursuant to a
subsequent employer's benefit plans, in which case the Company
may reduce or eliminate the coverage and benefits it is
required to provide the Participant hereunder as long as the
aggregate coverages and benefits of the combined benefit plans
are no less favorable to the Participant than the coverages
and benefits required to be provided hereunder. Any period
during which benefits are continued pursuant to this Section
6.3 shall be considered to be in satisfaction of the Company's
obligation to provide "continuation coverage" pursuant to
Section 4980B of the Internal Revenue Code of 1986, as
amended, and the period of coverage required under said
Section 4980B shall be reduced by the period during which
benefits were provided pursuant to this Section 6.3.
6.4 Notwithstanding Section 6.1, a Participant may elect to
receive the Salary Separation Payment in a lump sum. Benefits
otherwise receivable by the Participant pursuant to clause
(a), (b) and (c) of Section 6.3 shall be discontinued if the
Participant accepts alternative employment with the Company or
any of its Affiliates, or requests and receives a lump sum
payment. Payments under Section 6.1 shall also cease upon a
Participant accepting alternative employment with the Company
or any of its Affiliates. If the Participant elects to receive
the Salary Separation Payment as a lump sum, and the
Participant accepts alternative employment with the Company,
such Participant shall owe the Company the portion of the
Salary Separation Payment which exceeds the amount of Base
Salary the Participant would have earned had the Participant
been actively employed by the Company from the date his or her
termination of employment commenced to the new employment
commencement date.
6.5 Any termination of employment following a Change in Control by
the Company or by the Participant shall be communicated by a
Notice of Termination to the other party herein in accordance
with Section 11. For purposes of this Plan, a "Notice of
Termination" shall mean a written notice which shall indicate
the specific Qualifying Termination provision in this Plan, if
any, relied upon and shall set forth in reasonable detail the
facts and circumstances that provide a basis for termination
of the Participant's employment under the provision so
indicated and shall specify the effective date of the
Qualifying Termination which shall not be less than thirty
(30) days nor more than sixty (60) days from the date such
Notice of Termination is given or such shorter or longer
period as may be mutually agreed between the Company and the
Participant. For purposes of this Plan, no such purported
Qualifying Termination shall be effective without such Notice
of Termination.
6.6 If a Participant who is entitled to Severance Benefits under
this Plan dies before receiving the Salary Separation Payment,
such Payment shall be made to the Participant's surviving
spouse, or, if there is no surviving spouse, to the
Participant's estate. If a Participant who is entitled to
Severance Benefits under this Plan dies before the end of the
Continuation Period, then for the balance of the Continuation
Period, the Company shall be required to continue the benefits
provided for under Section 6.3 to the Participant's spouse and
dependents.
6.7 A Participant who is entitled to benefits under this Plan
shall not be required to accept or to seek other employment as
a condition of receiving such benefits, and a Participant's
benefits provided under this Plan shall not be offset by any
future compensation received by the Participant.
7. Excise Tax
7.1 Excise Tax Limitation.
------------------------
(a) With respect to any Participant who immediately prior to
the Change in Control is a member of employee classification
A (as set forth in Appendix A), except as provided in
subsection (b), in the event it shall be determined that any
payment or distribution of any type to a Participant,
including accelerated vesting, to or for the benefit of the
Participant, by the Company, any Affiliate of the Company,
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) who acquires ownership or effective
control of the Company or ownership of a substantial portion
of the Company's assets (within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder) or any Affiliate of
such Person, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or
otherwise (the "Payments"), is or will be subject to the
excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties,
are collectively referred to as the "Excise Tax"), then the
Participant shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after
payment by the Participant of all taxes (including any
interest or penalties imposed with respect to such taxes),
including any income tax, employment tax or Excise Tax
imposed upon the Gross-Up Payment, the Participant retains
an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) With respect to any Participant who immediately prior to
the Change in Control is a member of employee classification
A, notwithstanding Section (a) or any other provision of
this Plan to the contrary, in the event that the Payments
(excluding the payment provided for in subsection 7.1(a))
exceed by less than 10% or $100,000 the maximum amount of
Payments which if made or provided to the Participant would
not be subject to an Excise Tax, the Participant will not be
entitled to a Gross-Up Payment and the Payments shall be
reduced (but not below zero) to the extent necessary so that
no Payment to be made or benefit to be provided to the
Participant shall be subject to the Excise Tax; it being the
intent of the parties that the Payments shall be reduced
only if the economic detriment to the Participant (on a
pre-tax basis) is less than the greater of $100,000 or 10%
of the Payments. Unless the Participant shall have given
prior written notice specifying a different order to the
Company to effectuate the foregoing, the Company shall
reduce or eliminate the Payments, by first reducing or
eliminating the portion of the Payments which are not
payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order beginning with
payments or benefits which are to be paid the farthest in
time from the "Determination" (as defined below). Any notice
given by the Participant pursuant to the preceding sentence
shall take precedence over the provisions of any other plan,
arrangement or agreement governing the Participant's rights
and entitlements to any benefits or compensation.
(c) With respect to any Participant who immediately prior to
the Change in Control is a member of employee classification
A, the determination of whether the Payments shall be
reduced pursuant to this Plan and the amount of such
reduction, all mathematical determinations, and all
determinations as to whether any of the Payments are
"parachute payments" (within the meaning of Section 280G of
the Code), that are required to be made under this Section,
including determinations as to whether a Gross-Up Payment is
required, the amount of such Gross-Up Payment and amounts
relevant to the last sentence of this subsection (c), shall
be made by an independent accounting firm selected by the
Company from among the five (5) largest accounting firms in
the United States or any nationally recognized financial
planning and benefits consulting company (the "Accounting
Firm"), which shall provide its determination (the
"Determination"), together with detailed supporting
calculations regarding the amount of any Gross-Up Payment
and any other relevant matter, both to the Company and the
Participant by no later than ten (10) days following the
Termination Date, if applicable, or such earlier time as is
requested by the Company or the Participant (if the
Participant reasonably believes that any of the Payments may
be subject to the Excise Tax). If the Accounting Firm
determines that no Excise Tax is payable by the Participant,
it shall furnish the Participant and the Company with an
opinion reasonably acceptable to the Participant and the
Company that no Excise Tax is payable (including the reasons
therefor) and that the Participant has substantial authority
not to report any Excise Tax on his federal income tax
return. If a Gross-Up Payment is determined to be payable,
it shall be paid (including through withholding of taxes) to
the Participant no later than the due date for payment of
the Excise Tax. Any determination by the Accounting Firm
shall be binding upon the Company and the Participant,
absent manifest error. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments not made by the Company
should have been made ("Underpayment"), or that Gross-Up
Payments will have been made by the Company which should not
have been made ("Overpayment"). In either such event, the
Accounting Firm shall determine the amount of the
Underpayment or Overpayment that has occurred. In the case
of an Underpayment, the amount of such Underpayment
(together with any interest and penalties payable by the
Participant as a result of such Underpayment) shall be
promptly paid by the Company to or for the benefit of the
Participant. In the case of an Overpayment, the Participant
shall, at the direction and expense of the Company, take
such steps as are reasonably necessary (including the filing
of returns and claims for refund), follow reasonable
instructions from, and procedures established by, the
Company, and otherwise reasonably cooperate with the Company
to correct such Overpayment, provided, however, that (i) the
Participant shall not in any event be obligated to return to
the Company an amount greater than the net after-tax portion
of the Overpayment that he has retained or has recovered as
a refund from the applicable taxing authorities and (ii) if
a Gross-Up Payment is determined to be payable, this
provision shall be interpreted in a manner consistent with
an intent to make the Participant whole, on an after-tax
basis, from the application of the Excise Tax, it being
understood that the correction of an Overpayment may result
in the Participant repaying to the Company an amount which
is less than the Overpayment. The cost of all such
determinations made pursuant to this Section shall be paid
by the Company. (d) With respect to any Participant who
immediately prior to the Change in Control is a member of
employee classification B, C, D or E (as set forth in
Appendix A), notwithstanding anything in this Plan to the
contrary, in the event it shall be determined that any
Payment to or for the benefit of a Participant would be
subject to the Excise Tax, the Payments shall be reduced
(but not below zero) if and to the extent that such
reduction would result in Participant 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 Participant received all of the
Payments. Unless the Participant shall have given prior
written notice specifying a different order to the Company
to effectuate the foregoing, the Company shall reduce or
eliminate the Payments, by first reducing or eliminating the
portion of the Payments which are not payable in cash and
then by reducing or eliminating cash payments, in each case
in reverse order beginning with payments or benefits which
are to be paid the farthest in time from the determination.
Any notice given by the Participant pursuant to the
preceding sentence shall take precedence over the provisions
of any other plan, arrangement or agreement governing the
Participant's rights and entitlements to any benefits or
compensation. All determinations concerning the application
of this paragraph shall be made by a nationally recognized
firm of independent accountants or any nationally recognized
financial planning and benefits consulting company, selected
by Participant 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 Participant. The Company shall hold in confidence
and not disclose, without the Participant's prior written
consent, any information with regard to the Participant's
tax position which the Company obtains pursuant to this
Section.
7.2 Pooling Transactions. Notwithstanding anything contained in
this Plan to the contrary, in the event of a Change in Control
which is also intended to be treated as a "pooling of
interests" under generally accepted accounting principles (a
"Pooling Transaction"), the Board shall take such actions, if
any, as are specifically recommended by an independent
accounting firm retained by the Company to the extent
reasonably necessary in order to assure that the Pooling
Transaction will qualify as such, including but not limited to
(a) deferring the vesting, exercise, payment, settlement or
lapsing of restrictions with respect to any option or award,
(b) providing that the payment or settlement in respect of any
option or award be made in the form of cash, shares of common
stock or securities of a successor or acquirer of the Company,
or a combination of the foregoing, (c) providing for the
extension of the term of any option or award to the extent
necessary to accommodate the foregoing, but not beyond the
maximum term permitted for any option or award and (d)
amending, deleting or making inapplicable to the Participant
any provision in this Plan or other arrangement pursuant to
which he or she receives compensation, payments or benefits.
8. Successor to Company
This Plan shall bind any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, in the same manner
and to the same extent that the Company would be obligated under this
Plan if no succession had taken place. In the case of any transaction
in which a successor would not by the foregoing provision or by
operation of law be bound by this Plan, the Company shall require such
successor expressly and unconditionally to assume and agree to perform
the Company's obligations under this Plan, in the same manner and to
the same extent that the Company would be required to perform if no
such succession had taken place.
9. Amendment and Plan Termination
9.1 Amendment and Termination. Prior to a Change in Control, the
Plan may be amended or modified in any respect, and may be
terminated, by resolution adopted by two-thirds of the Board;
provided, however, that no such amendment, modification or
termination, which would adversely affect the benefits or
protections hereunder of any individual who is a Participant
as of the date such amendment, modification or termination is
adopted shall be effective as it relates to such individual
unless no Change in Control occurs within six (6) months after
such adoption, any such attempted amendment, modification or
termination adopted within six (6) months prior to a Change in
Control being null and void ab initio as it relates to all
individuals who were Participants as of the date of such
adoption; provided, further, however, that the Plan may not be
amended, modified or terminated, (a) at the request of a third
party who has indicated an intention or taken steps to effect
a Change in Control and who effectuates a Change in Control or
(b) otherwise in connection with, or in anticipation of, a
Change in Control which actually occurs, if the amendment,
modification or termination adversely affects the rights of
any Participant under the Plan, any such attempted amendment,
modification or termination being null and void ab initio.
From and after the occurrence of a Change in Control, the Plan
(x) may not be amended or modified in any manner that would in
any way adversely affect the benefits or protections provided
to any individual hereunder and (y) may not be terminated
until the later of (i) twenty-four (24) months after the date
of the Change in Control or (ii) the date that all
Participants who have become entitled to a Severance Benefit
hereunder shall have received such payments in full.
9.2 Form of Amendment. Any amendment or termination of the Plan
shall be effected by a written instrument signed by a duly
authorized officer or officers of the Company, certifying that
the amendment or termination has been approved by the Board.
10. Employment Status/Waiver of Rights
This Plan does not constitute a contract of employment or impose on the
Company any obligation to retain the Participant as an employee, to
change the status of the Participant's employment, or to change the
Company's policies regarding termination of employment.
Following a Change in Control, no waiver of rights by the Participant
in return for continued employment shall be effective with respect to
the rights and benefits provided under this Plan.
11. Notices
Any notice provided for in this Plan shall be sent to the Company at
4500 Park Granada, Calabasas, California 91302, Attention: Senior Human
Resources Manager or to such other address as the Company may from time
to time in writing designate, and to a Participant at such address as
he or she may from time to time in writing designate (or his or her
business address of record in the absence of such designation). Such
notice shall be deemed to have been given two (2) business days after
it has been deposited as certified mail, return receipt requested,
postage paid and properly addressed to the designated address of the
party to receive the notice.
12. Severability
If any provision of this Plan is held invalid or unenforceable, the
remainder of this Plan 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.
13. Governing Law
The interpretation, construction and performance of this Plan shall in
all respects be governed by the laws of the State of California.
<PAGE>
IN WITNESS WHEREOF, this Amendment and Restatement has been approved by
the Board of Directors of the Company at its meeting on September 11, 2000.
Countrywide Credit Industries, Inc.
By: ---------------------------------------- Anne D.
McCallion Managing Director, Chief Administrative Officer
Attest:
----------------------------------------
Susan Bow Assistant Secretary
<PAGE>
Page 38
APPENDIX A
Eligible Employee
Classifications Members
A Managing Directors
B Executive Vice Presidents, Senior Vice Presidents,
Presidents
C First Vice Presidents, Vice Presidents, Regional Vice
Presidents
D Branch Managers and all other Exempt
Employees
E All Non-Exempt Employees
Salary Separation Payment
The Salary Separation Payment to which a Participant is entitled shall be based
on the Participant's employee classification as of the date immediately
preceding the date of the Participant's Qualifying Termination or, if greater,
as of the date on which the Change in Control occurs, and shall equal the amount
described in the table below; provided, however, that the Salary Separation
Payment for each Participant shall not exceed twenty-four months Base Pay plus
Bonus for Employee Classification B and twelve (12) months Base Pay plus Bonus
for Employee Classification C, D and E. The Salary Separation Payment (without
regard to any payments described in Section 7.2) for Employee Classification A
shall not exceed the sum of (I) thirty (30) months Base Pay and (II) 200% Bonus.
Employee
Classification Salary Separation Payment
A Two (2) years Base Pay (as defined in Section
6.1(a)) plus 200% Bonus (as defined in Section
6.1(a)) plus two (2) weeks Base Pay for each full
year of service from first hire date.
B One (1) year Base Pay plus 100% Bonus plus two (2) weeks
Base Pay for each full year of service from first hire date.
C Six (6) months Base Pay plus 75% Bonus plus one and
one-half (1.5) weeks Base Pay for each full year of service
from first hire date.
D Four (4) months Base Pay plus 33% Bonus plus one (1) week
Base Pay for each full year of service from first hire date.
E Two (2) months Base Pay plus 15% Bonus plus one (1) week
Base Pay for each full year of service from first hire date.
