<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 26, 1996
Registration No. 33-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
Registration Statement
under
The Securities Act of 1933
_______________________
CWM MORTGAGE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3983415
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
35 North Lake Avenue, 91101
Pasadena, CA
(Address of Principal Executive Offices) (Zip Code)
CWM MORTGAGE HOLDINGS, INC.
1996 STOCK INCENTIVE PLAN
(Full title of the plan)
Michael W. Perry
Executive Vice President and Chief Operating Officer
35 North Lake Avenue
Pasadena, California 91101
(Name and address of agent for service)
(800) 669-2300
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
TITLE OF SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF REGISTRATION
REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 4,000,000 (1) $17.0625 (2) $68,250,000 (2) $23,534.48
$.01 par value
==================================================================================================================================
</TABLE>
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, options and other rights to purchase or acquire the
shares of Common Stock covered by the Prospectus and, pursuant to Rule 416, an
additional indeterminate number of shares which may become subject to the Plan
by reason of certain events specified in the Plan.
(2) In accordance with Regulation 457(c), the offering price has been
calculated on the basis of the average of the high and low prices for the Common
Stock as reported by the New York Stock Exchange on July 22, 1996.
<PAGE>
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents which CWM Mortgage Holdings, Inc. (the
"Company") previously filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(b) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996; and
(c) The description of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), contained in its Registration
Statement on Form 8-B dated April 10, 1987, and any amendment or
report filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended,
subsequent to the date of this registration statement and prior to the
termination of the offering of the Company's Common Stock pursuant to
the Company's 1996 Stock Incentive Plan shall be deemed to be
incorporated by reference into this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES
The description of the Company's Common Stock incorporated by
reference in Item 3(c) above is hereby updated to reflect that the
Certificate of Incorporation now authorizes the issuance of 100
million shares and the transfer agent for the Common Stock is The Bank
of New York.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation eliminates personal
liability of directors to the Company or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for: (i)
any breach of the duty of loyalty to the Company or its shareholders;
(ii) acts or omissions not in good faith or which involve intentional
misconduct or knowing violations of law; (iii) liability under Section
174 of the Delaware General Corporation Law relating to certain
unlawful dividends and stock repurchases; or (iv) any transaction from
which the director derived an improper personal benefit. The
Certificate also provides that the Company shall indemnify and advance
expenses to each director, officer, employee and agent to the fullest
extent permitted by the Delaware General Corporation Law.
1
<PAGE>
As permitted by Section 145 of the General Corporation Law of
Delaware, the Company's Bylaws provide for indemnification of
directors, officers, employees and agents of the Company to the
fullest extent authorized by Delaware law against expenses (including
attorney's fees) and other amounts paid in settlement actually and
reasonably incurred by them in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which any such person was or is a
party or is threatened to be made a party. The right to
indemnification includes the right to be paid the expenses incurred in
defending or investigating a threatened or pending action, suit or
proceeding in advance of the final disposition of such action, suit or
proceeding; provided that, if required by Delaware law, payment of
expenses in advance to an officer or director shall be conditioned
upon receipt by the Company of an undertaking by or on behalf of such
director or officer to repay such amount if it is ultimately
determined that he is not entitled to indemnification. The advancement
of expenses, as well as indemnification, pursuant to the Company's
Bylaws is not exclusive of any other rights which those seeking
indemnification or advancement of expenses from the Company may have.
The Company also maintains an insurance policy pursuant to which its
directors and officers are insured against certain liabilities which
might arise out of their relationship with the Company as directors
and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4. CWM Mortgage Holdings, Inc. 1996 Stock Incentive Plan.
5. Opinion of Richard H. Wohl, General Counsel of the Company,
as to the legality of the Common Stock being registered.
23.1 Consent of Grant Thornton LLP.
23.2 Consent of Richard H. Wohl (included in Opinion filed as
Exhibit 5).
24. Power of Attorney (included in this Registration Statement
under "Signatures").
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, unless the information required to
be included in such post-effective amendment is contained in
periodic reports filed by registrant pursuant to Section 13 or
Section 15(d) of the
2
<PAGE>
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement,
unless the information required to be included in such post-
effective amendment is contained in periodic reports filed by
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
3
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Pasadena, State of California, on the 26th day
of July, 1996.
CWM Mortgage Holdings, Inc.
By: /s/ David S. Loeb
--------------------------------
David S. Loeb
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Michael
W. Perry and Richard H. Wohl his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, each acting alone, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ David S. Loeb Chairman of the July 26, 1996
- ----------------- Board of Directors
David S. Loeb and Chief Executive Officer
/s/ Angelo R. Mozilo Vice Chairman of the July 26, 1996
- -------------------- Board of Directors
Angelo R. Mozilo and President
/s/ Michael W. Perry Executive Vice July 26, 1996
- -------------------- President and Chief
Michael W. Perry Operating Officer (Principal
Financial Officer)
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Carmella L. Grahn Senior Vice President and July 26, 1996
- --------------------- Chief Accounting Officer
Carmella L. Grahn (Principal Accounting
Officer)
/s/ Lyle E. Gramley Director July 26, 1996
- -------------------
Lyle E. Gramley
/s/ Thomas J. Kearns Director July 26, 1996
- --------------------
Thomas J. Kearns
/s/ Frederick J. Napolitano Director July 26, 1996
- ---------------------------
Frederick J. Napolitano
</TABLE>
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER EXHIBIT NUMBER
- ------ ------- ------
<S> <C> <C>
4. CWM Mortgage Holdings, Inc. 1996 Stock Incentive Plan
5. Opinion of Richard H. Wohl, General Counsel of the
Company, as to the legality of the Common Stock being
registered.
23.1 Consent of Grant Thornton LLP.
23.2 Consent of Richard H. Wohl (included in Opinion filed
as Exhibit 5).
24. Power of Attorney (included in this Registration Statement
under "Signatures").
</TABLE>
<PAGE>
EXHIBIT 4
CWM MORTGAGE HOLDINGS, INC.
1996 STOCK INCENTIVE PLAN
1. Purpose of Plan. The purpose of this 1996 Stock Incentive Plan
---------------
("Plan") of CWM Mortgage Holdings, Inc., a Delaware corporation (the "Company")
---- -------
is to enable the Company and any subsidiaries to attract, retain and motivate
their employees, consultants, agents, officers and directors by providing
incentives related to equity interests in and the financial performance of the
Company.
2. Persons Eligible Under Plan. Any person, including any
---------------------------
director of the Company, who is an officer or employee of the Company or any
subsidiary or an individual who performs services for the Company or any
subsidiary of a nature similar to those performed by officers or employees, such
as consultants and agents (any of the foregoing, "Employee") shall be eligible
--------
to be considered for the grant of an Award (as defined in Section 5 below) or
Awards under Section 5 of this Plan. No member of the Board of Directors of the
Company (the "Board") who is not an officer or employee of the Company or any
-----
subsidiary (a "Non-Officer Director") shall be eligible to receive any Awards
--------------------
under this Plan, except for nonqualified stock options granted automatically
under the provisions of Section 10 ("Director Options").
----------------
3. Stock Subject to Plan.
---------------------
(a) ISO Limit. The maximum number of Common Shares, $0.01 par
---------
value per share, of the Company (the "Common Shares") that may be issued
-------------
pursuant to options qualified as incentive stock options ("Incentive Stock
---------------
Options") under Section 422 of the Internal Revenue Code of 1986, as
-------
amended (the "Code") granted under this Plan is 4,000,000, and provided
----
further, that the aggregate fair market value of Common Shares with respect
to which Incentive Stock Options are exercisable for the first time by any
individual during any calendar year shall not exceed the limit, if any, set
forth in Section 422(d) of the Code or any successor provision thereto. For
purposes of this subsection (a), the fair market value of any Common Shares
shall be determined as of the time the Incentive Stock Option with respect
to the Common Shares is granted.
<PAGE>
(b) Aggregate/Individual Share Limit.
--------------------------------
(1) The maximum number of Common Shares that may be issued pursuant
to all Awards (including Incentive Stock Options) granted under this
Plan, other than Common Shares that are issued pursuant to Awards and
subsequently reacquired by the Company pursuant to the terms and
conditions of such Awards ("Reacquired Common Shares"), is 4,000,000,
------------------------
subject to adjustment as provided in or pursuant to Sections 6 or 10
hereof (such maximum number, as so adjusted, shall be referred to as
the "Share Limit").
-----------
(2) Notwithstanding anything contained herein to the contrary, the
aggregate number of Common Shares subject to options and stock
appreciation rights granted during any calendar year to any individual
shall be limited to 250,000.
(c) Share Reservation. No Award may be granted under this Plan
-----------------
unless, on the date of grant, the sum of (i) the maximum number of Common
Shares issuable at any time pursuant to such Award, plus (ii) the number of
Common Shares that have previously been issued pursuant to Awards granted
under this Plan, other than Reacquired Common Shares available for reissue,
plus (iii) the maximum number of Common Shares that may be issued at any
time after such date of grant pursuant to Awards that are outstanding on
such date, does not exceed the Share Limit. Common Shares distributed
under the Plan may be treasury shares, authorized but unissued shares or
shares purchased in the open market for this purpose.
(d) Provisions for Certain Cash Awards. Unless otherwise
----------------------------------
permitted under Rule 16b-3 under Section 16 ("Rule 16b-3") of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), for
purposes of determining the maximum number of Awards payable solely in cash
under the Plan that would constitute derivative securities but for the
exclusion in Rule 16a-l(c)(3)(i) under the Exchange Act ("Cash Only
---------
Awards"), the number of Common Shares referenced for purposes of
------
determining the value or price of the Cash Only Award shall be deducted
from the Share Limit as if the Awards were payable in Common Shares.
(e) Reissue of Awards and Common Shares. Cash Only Awards and
-----------------------------------
other Awards payable in cash or Common Shares that are forfeited or for any
reason are not so paid under this Plan, as well as Common Shares subject to
Awards that expire or for any reason are terminated and are not
2
<PAGE>
issued or constitute Reacquired Common Shares, shall again be available for
subsequent Awards under the Plan. Except as limited by Rule 16b-3, if an
Award is or may be settled only in cash and satisfies the requirements for
exemption under Rule 16b-3 or for exclusion from the definition of
derivative security under Rule 16a-1(c)(3)(ii), such Award need not be
counted against any of the limits under this Section 3.
(f) Fractional Shares/Minimum Issue. Fractional share interests
-------------------------------
shall be disregarded, but may be accumulated. No fewer than 100 Common
Shares may be purchased on exercise of any option granted under this Plan
("Option") at one time unless the number purchased is the total number at
------
the time available for purchase under the Option.
(g) Privileges of Stock Ownership. Except as otherwise
-----------------------------
expressly authorized by this Plan, a Participant shall not be entitled to
any privilege of stock ownership as to any Common Shares subject to an
Option granted under this Plan prior to the satisfaction of all conditions
to the valid exercise of the Option.
4. Administration of Plan.
----------------------
(a) The Committee. Except for the provisions of Section 10
-------------
(which to the maximum extent feasible shall be self-effectuating), this
Plan shall be administered by a committee of the Board (the "Committee")
---------
consisting of two or more directors, each of whom is a "disinterested
-------------
person", as such term is defined in Rule 16b-3.
------
(b) Powers of the Committee. Subject to the express provisions
-----------------------
of this Plan, the Committee shall be authorized and empowered to do all
things necessary or desirable in connection with the administration of this
Plan including, without limitation, the following:
(i) adopt, amend and rescind rules and regulations
relating to this Plan;
(ii) determine which persons meet the requirements of
Section 2 hereof for eligibility under this Plan and to which of such
eligible persons, if any, Awards will be granted hereunder;
(iii) grant Awards to eligible persons and determine the
terms and conditions thereof, including, but not limited to, the
number of Common Shares
3
<PAGE>
issuable pursuant thereto, the time not more than five (5) years after
the date of an Award at which time the Award shall expire or (if not
vested) terminate, and the conditions upon which Awards become
exercisable or vest or shall expire or terminate, and the
consideration, if any, to be paid upon receipt, exercise or vesting of
Awards;
(iv) determine whether, and the extent to which,
adjustments are required pursuant to Section 6 hereof:
(v) interpret and construe this Plan and the terms and
conditions of any Award granted under Section 5, whether before or
after the date set forth in Section 7; and
(vi) determine the circumstances under which, consistent
with the provisions of Section 7, any outstanding Award under Section
5 may be amended;
which authority (except as to clause (ii) and (iii) above) shall remain in
effect so long as any Award remains outstanding under this Plan.
(c) Specific Committee Responsibility and Discretion Regarding
----------------------------------------------------------
Awards. Subject to the express provisions of this Plan, the Committee, in
------
its sole and absolute discretion, shall determine all of the terms and
conditions of each Award granted under Section 5 of this Plan, which terms
and conditions may include, subject to such limitations as the Committee
may from time to time impose, among other things, provisions that:
(i) permit the recipient of such Award, including any
recipient who is a director or officer of the Company, to pay the
purchase price of the Common Shares or other property issuable
pursuant to such Award, or such recipient's tax withholding obligation
upon such issuance or in respect of such Award or Shares, in whole or
in part, by any one or more of the following:
(A) the delivery of previously owned shares of
capital stock of the Company (including shares acquired as or
pursuant to Awards) or other property,
4
<PAGE>
(B) a reduction in the amount of Common Shares or
other property otherwise issuable pursuant to such Award, or
(C) the delivery of a promissory note, under any
applicable financing plan or on such other terms and conditions,
as in either case authorized by the Committee, consistent with
applicable law;
(ii) accelerate the receipt of benefits pursuant to such
Award upon the occurrence of specified events, including, without
limitation, a change of control of the Company, an acquisition of a
specified percentage of the voting power of the Company, the
dissolution or liquidation of the Company, a sale of substantially all
of the property and assets of the Company or an event of the type
described in Section 6 hereof, or in other circumstances or upon the
occurrence of other events as deemed appropriate by the Committee;
(iii) qualify such Award as an Incentive Stock Option;
(iv) extend the exercisability or term of any or all such
outstanding Awards, change the price of any or all such outstanding
Awards or otherwise change previously imposed terms and conditions, in
the specified events described in clause (ii) above or in other
circumstances or upon the occurrence of other events as deemed
appropriate by the Committee, in each case subject to Section 7;
(v) authorize the conversion, succession or substitution
of outstanding Awards under Section 5 upon the occurrence of an event
of the type described in Section 6, or in other circumstances or upon
the occurrence of other events as deemed appropriate by the Committee;
and/or
(vi) provide for automatic grants of Awards or successive
Awards.
(d) Binding Determinations. Any action taken by, or inaction
----------------------
of, the Company, the Board or the Committee relating or pursuant to this
Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Board or
officer of the Company shall be liable for any such
5
<PAGE>
action or inaction of the entity or body, of another person or, except in
circumstances involving bad faith, of himself or herself.
(e) Reliance on Experts. In making any determination or in
-------------------
taking or not taking any action under this Plan, the Board and the
Committee may obtain and may rely upon the advice of experts, including
professional advisors to the Company. No director, officer or agent of the
Company shall be liable for any such action or determination taken or made
or omitted in good faith.
(f) Delegation. The Committee may delegate ministerial, non-
----------
discretionary functions to individuals who are officers or employees of the
Company.
5. Awards.
------
(a) Types of Awards. The Committee, on behalf of the Company,
---------------
is authorized under this Plan to enter into any type of arrangement with an
Employee that is not inconsistent with the provisions of this Plan and that
by its terms, involves or might involve the issuance of (i) Common Shares,
(ii) an option, warrant, convertible security, stock appreciation right or
similar right with an exercise or conversion privilege at a fixed or
variable price related to the Common Shares or other equity securities of
the Company and/or the passage of time, the occurrence of one or more
events, or the satisfaction of performance criteria or other conditions, or
any combination of these variables, or any similar security contemplated by
clause (b) below, or (iii) any similar security with a value derived from
the value of the Common Shares or other equity securities of the Company,
all of which may or may not involve the payment of cash consideration,
subject to subsection (e) below. The authorization of any such arrangement
(including any benefits described in Section 5(e)) is referred to herein as
the grant of an "Award". The date of grant may be at or after (but not
-----
before) the date the Committee authorizes the Award. The Committee may
authorize an officer or officers (other than the particular recipient) to
execute any or all agreements memorializing any grant of an Award by the
Committee under this Plan. All Awards shall be evidenced by a writing
("Award Agreement") executed on behalf of the Company and, if required by
---------------
the Committee, by the recipient of the Award.
(b) Form of Awards. Awards are not restricted to any specified
--------------
form or structure and may include, without limitation, sales or bonuses of
stock, restricted stock,
6
<PAGE>
performance restricted stock, stock options, reload stock options, stock
purchase warrants, other rights to acquire stock, securities convertible
into or redeemable for stock, stock appreciation rights, limited stock
appreciation rights, phantom stock, dividend equivalents, performance units
or performance shares, and an Award may consist of one such security or
benefit, or two or more of them in any combination or alternative.
(c) Restricted Stock Awards. If expressly provided by the
-----------------------
Committee, and without limiting subsection (b) above, Awards of restricted
Common Shares ("Restricted Stock") may be made to the holder of any Option,
based upon dividends or distributions that would have been received had the
Common Shares covered by the Option been issued and outstanding on the
applicable dividend record date. The terms and conditions of any such
Awards of Restricted Stock shall be specified by the applicable Award
Agreement.
(d) Time and Method of Exercise. Awards may be exercised in
---------------------------
whole or in part at such time or times as shall be determined by the
Committee and set forth in the applicable Award Agreement. Awards shall be
exercised in accordance with procedures established by the Committee.
(e) Price; Consideration; Option Pricing Limit. Common Shares
------------------------------------------
may be issued pursuant to an Award for any lawful consideration as
determined by the Committee, including, without limitation, cash, Common
Shares (valued at then Fair Market Value), or services rendered by the
recipient of such Award; provided that no Common Shares shall be issued for
-------- ----
less than the minimum lawful consideration and no Option shall be granted
with an exercise price that is less than the Fair Market Value of the
underlying Common Shares on the date of grant.
(f) Effect of Termination of Employment or Death; Change in
-------------------------------------------------------
Subsidiary Status. Each Option and all other rights thereunder, to the
-----------------
extent not exercised (whether or not presently exercisable), shall
terminate and become null and void at such time as the holder of such
Option ceases to be employed by either the Company or any subsidiary,
except that
(i) if the holder terminates for a reason other than by death,
permanent and total disability (as defined in clause (ii) below) or
for cause (as determined by the Committee in its sole discretion), the
holder may at any time within a period of three months after such
termination exercise such Option to
7
<PAGE>
the extent such Option was exercisable at the date of such
termination;
(ii) if the holder terminates by reason of permanent and total
disability (within the meaning of Section 22(e)(3) of the Code), or if
the holder becomes permanently and totally disabled within three
months after termination described in clause (i), the holder may at
any time within a period of twelve (12) months after such termination
exercise such Option to the extent such Option was exercisable on such
date;
(iii) if the holder dies while in the employ of the Company or
any subsidiary, or within three months after a termination described
in clauses (i) or (ii), then such Option may be exercised within a
period of twelve (12) months after the holder's termination from
employment, to the extent such Award was exercisable on such date;
provided, however, that in no event may any such Option be exercised by any
holder after its expiration date.
If the holder of an Option is employed by an entity which ceases
to be a subsidiary, such event shall be deemed for purposes of this
subsection (f) to be a termination of the holder's employment described in
clause (i) above. Absence from work caused by military service or
authorized sick leave shall not be considered a termination of employment
for purposes of this subsection (f).
(g) Cash Awards; Loans. The Committee shall have the express
------------------
authority to create, add or include a cash payment or benefit under this
Plan, whether in lieu of, in addition to or as an Award or as a component
of another type of Award, and to make or authorize loans to finance, or to
otherwise accommodate the financing of, the acquisition or exercise of an
Award.
(h) Transfer Restrictions. Unless otherwise permitted under
---------------------
Rule 16b-3(a)(2), any Award that constitutes a derivative security (as
defined in Rule 16a-1(c) under the Exchange Act) and that is granted to or
held by a person subject to Section 16 of the Exchange Act (a "Section 16
----------
Person") shall not be transferable other than by will or the laws of
------
descent and distribution or pursuant to a qualified domestic relations
order.
(i) Tax Withholding. Upon the issuance of Common Shares, the
---------------
payment of cash or any other taxable event in
8
<PAGE>
respect of an Award under this Plan, such number of shares or amount of
cash or other consideration, as the case may be, otherwise issuable or
payable may be reduced by the amount necessary to satisfy the minimum
applicable tax withholding requirements imposed on the Company or any
subsidiary in respect of such Award or event, all to the extent and in such
manner as the Committee may determine. The participant shall have no
discretion as to whether such shares or amount will or will not be withheld
by the Company; and, if the withholding offset is not mandatory and
automatic, the payment of any such Award shall be subject to the delivery
(or provision for delivery) to the Company of the full amount due for such
withholding in cash equivalent.
6. Adjustments and Acceleration.
----------------------------
(a) Adjustments. If (i) the outstanding securities of the
-----------
class then subject to this Plan (the "outstanding shares") (A) are
------------------
increased, decreased, exchanged or converted as a result of a stock split
(including a split in the form of a stock dividend), reverse stock split,
recapitalization, or similar event or (B) are exchanged for or converted
into cash, property or a different number or kind of securities (or if
cash, property or securities are distributed in respect of the outstanding
shares), as a result of a reorganization, merger, consolidation, exchange,
recapitalization, restructuring, or reclassification, or (ii) substantially
all of the property and assets of the Company are sold as an entirety, or
(iii) the Company is liquidated and dissolved, then, the Committee (or, in
the case of Director Options, the Board) shall, in such manner and to such
extent (if any) as is equitable and appropriate, make proportionate
adjustments in (x) the number and type of shares or other securities or
cash or other property that may be acquired pursuant to Options and other
Awards previously granted under this Plan (and, where applicable, the
exercise price thereof so as to maintain the same aggregate exercise
price), and (y) the maximum number and type of shares or other securities,
cash, or property that may be issued or delivered pursuant to Options
(including Incentive Stock Options and Director Options) and other Awards
thereafter granted under this Plan, and (z) such other terms as necessarily
are affected by such event. In the case of an extraordinary distribution,
merger, reorganization, consolidation, combination, sale of assets,
exchange, or spin off, the Committee (or the Board, in the case of Director
Options) may make provisions for a substitution or exchange of any or all
outstanding Options or other Awards or rights (or for the securities, cash
or property deliverable upon exercise of such outstanding
9
<PAGE>
Options or other Awards or rights), based upon the distribution or
consideration payable to holders of the Common Shares of the Company upon
or in respect of such event; provided, however, that (i) such adjustment
and the acting body's actions in respect thereof are based on objective
criteria and (in the case of holders subject to Section 16(a) of the
Exchange Act) satisfy applicable criteria in respect of anti-dilutive or
similar adjustments, substitutions or exchanges, as the case may be, under
Rule 16b-3, and, as to Director Options, the provisions of Rule 16b-
3(c)(2)(ii), and (ii) such adjustment is approved by shareholders or is
otherwise consistent with the effect of such event on shareholders, and
(iii) the accuracy of such adjustments is confirmed by the Company's
independent auditors.
(b) Acceleration.
------------
(i) A "Change in Control" for purposes of this Plan shall
-----------------
mean (u) approval by the shareholders of the Company of the
dissolution or liquidation of the Company; (v) approval by the
shareholders of the Company of an agreement of merger or
consolidation, or other reorganization, with or into one or more
entities that are not subsidiaries or affiliates, as a result of which
less than 25% of the outstanding voting securities of the surviving or
resulting entity immediately after the reorganization are, or will be,
owned by shareholders of the Company immediately before such
reorganization (assuming for purposes of such determination that there
is no change in the record ownership of the Company's securities from
the record date for such approval until such reorganization); (x)
approval by the shareholders of the Company of the sale of
substantially all of the Company's business and/or assets to a person
or entity which is not a subsidiary or other affiliate; (y) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 25% of the combined voting power of the
Company's then outstanding securities entitled to then vote generally
in the election of directors of the Company; or (z) during any period
not longer than two consecutive years, individuals who at the
beginning of such period constituted the Board cease to constitute at
least a majority thereof, unless the election, or the nomination for
election by the Company's shareholders, of each new Board member was
approved by a vote of at
10
<PAGE>
least a majority of the Board members then still in office who were
Board members at the beginning of such period (including for these
purposes, new members whose election or nomination was so approved,
but, in the case of successors to such new members, without
duplication).
(ii) Prior to a Change in Control, the Committee may
determine in respect of Awards held by Employees that upon or in
anticipation of the occurrence of the Change in Control benefits under
Awards shall be accelerated only for a limited period of time, not
less than a period of time reasonably necessary to realize the
benefits of such acceleration nor more than one year after the Change
in Control. Unless such a determination is made, then (subject to the
last sentence of this clause) upon the occurrence of a Change in
Control (x) each Option and stock appreciation right shall become
immediately exercisable, (y) Performance Restricted Stock shall
immediately vest free of restrictions, and (z) each Performance Share
Award shall become payable to the Participant; provided, however, that
in no event shall any Award be accelerated as to any Section 16 Person
to a date less than six months after the date of such Award. The
Committee may override the limitations on acceleration in this Section
6(b)(ii) by express provision in the Award Agreement or otherwise, and
may accord any holder of an Award a right to refuse any acceleration,
whether pursuant to the Award Agreement or otherwise, in such
circumstances as the Committee may approve. Any acceleration of Awards
shall comply with any applicable regulatory requirements, including
without limitation Section 422 of the Code.
(iii) Any Awards that are (or but for a holder's rejection
of acceleration would have been) accelerated under this Section 6 and
that are not exercised or vested prior to a dissolution of the Company
or a reorganization event described in Section 6(a) that the Company
does not survive shall terminate, provided that if provision has been
made, consistent with the terms hereof, for the substitution, exchange
or other settlement of Awards, such Awards shall be substituted,
exchanged or otherwise settled in accordance with such provision.
(iv) Any Awards that are (or but for the holder's rejection
of the acceleration would have been) accelerated that are not
exercised or vested prior to
11
<PAGE>
an abandonment or termination of a transaction subject to shareholder
approval that triggered the Change in Control (as evidenced by public
announcement, Board resolution, execution of documents terminating the
transaction, or other action or document objectively confirming such
abandonment or termination), shall be restored to their prior status
(except for the effects of the passage of time) as if no Change in
Control had occurred.
7. Amendment and Termination of Plan. (a) No Award shall be granted
under this Plan after March 31, 2006. Although Common Shares may be issued after
March 31, 2006 pursuant to Awards granted prior to such date, no Common Shares
otherwise shall be issued under this Plan after such date. Notwithstanding the
foregoing, any Award granted prior to such date may vest or be amended after
such date in any manner that would have been permitted prior to such date,
except that (except as provided herein) no such amendment shall increase the
number of shares subject to or comprising such Award, or extend the final
expiration date of the Award or reduce (below the Fair Market Value on the date
of the amendment) the exercise price of or under such Award.
(b) The Board may, without shareholder approval, at any time and from time
to time, suspend, discontinue or amend this Plan in any respect whatsoever,
except that no such amendment shall impair any rights under any Award
theretofore made under the Plan without the consent of the holder of such Award.
Furthermore, and except as and to the extent otherwise permitted by the
provisions hereof, no such amendment shall, without shareholder approval:
(1) materially increase the benefits accruing to grantees under the
Plan;
(2) increase the maximum number of Common Shares which may be made
subject to Awards to an individual as Options or stock appreciation rights
in any year;
(3) materially increase, beyond the amounts set forth in Section 3,
the number of Common Shares in respect of which Awards may be issued under
the Plan;
(4) materially modify the designation in Section 2 of the class of
persons eligible to receive awards under the Plan;
(5) provide for the grant of Options or Stock Appreciation Rights
having an exercise price or appreciation
12
<PAGE>
base per Common Share less than 100% of the Fair Market Value of a Common
Share on the date of such grant; or
(6) extend the term of the Plan beyond the period set forth herein.
8. Effective Date of Plan: Shareholder Approval. This Plan shall be
--------------------------------------------
effective as of April 1, 1996, the date upon which it was approved by the Board;
provided, however, that no Common Shares may be issued under this Plan until it
has been approved by the affirmative votes of the holders of a majority of the
Common Shares of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with applicable law.
9. Legal Issues.
------------
(a) Compliance and Choice of Law: Severability. This Plan, the
------------------------------------------
granting and vesting of Awards under this Plan and the issuance and
delivery of Common Shares and/or the payment of money under this Plan or
under Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin
requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company,
be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions as the
Company may deem necessary or desirable to assure compliance with all
applicable legal requirements. This Plan, the Awards, all documents
evidencing Awards and all other related documents shall be governed by, and
construed in accordance with the laws of the State of Delaware. If any
provision shall be held by a court of competent jurisdiction to be invalid
and unenforceable, the remaining provisions of this Plan (subject to
Section 9(b)) shall continue in effect.
(b) Plan Construction. It is the intent of the Company that
-----------------
this Plan and Awards hereunder satisfy and be interpreted in a manner that
in the case of recipients who are or may become Section 16 Persons
satisfies the applicable requirements of Rule 16b-3 so that such persons
will be entitled to the benefits of Rule 16b-3 or other exemptive rules
under Section 16 of the Exchange Act and will not be subjected to avoidable
liability thereunder. If any provision of this Plan or of any Award would
otherwise frustrate or conflict with the intent expressed above, that
provision to the extent possible shall be interpreted and deemed amended so
as to avoid such conflict, but to the
13
<PAGE>
extent of any remaining irreconcilable conflict with such intent as to such
persons in the circumstances, such provision shall be deemed inoperative.
(c) REIT Qualification. Notwithstanding anything contained
------------------
herein to the contrary, no participant may receive any Common Shares upon
the grant, exercise or vesting of an option or right or other Award to the
extent it will cause such person to beneficially or constructively own
equity shares in excess of the 9.8% of the equity shares of the Company. In
the event that a participant would be otherwise entitled to claim or seek
to exercise any right which upon delivery of Common Shares would cause such
participant to beneficially or constructively own equity shares in excess
of the ownership limit, the Company shall have the right, notwithstanding
any option or right previously granted to the participant, to deliver a
check or cash to the participant in lieu thereof.
(d) Non-Exclusivity of Plan. Nothing in this Plan shall limit
-----------------------
or be deemed to limit the authority of the Board or the Committee to grant
awards or authorize any other compensation, with or without reference to
the Common Shares, under any other plan or authority.
10. Non-Officer Director Options
----------------------------
(a) Participation. Awards relating to the Common Shares
-------------
authorized under this Plan shall be made under this Section 10 only to Non-
Officer Directors.
(b) Certain Definitions. The following definitions shall apply
-------------------
to this Section 10:
"Business Day" shall mean any day, other than Saturday, Sunday or
------------
any statutory holiday in the state of California.
"Director Option" shall mean an Option granted to a Non-Officer
---------------
Director pursuant to this Section 10.
"Disability" shall mean a "permanent and total disability" within
----------
the meaning of Section 22(e)(3) of the Code.
"Fair Market Value" on a specified date shall mean (i) if the
-----------------
Common Shares are listed or admitted to trade on a national securities
exchange, the average of the high and low reported sales prices of the
Common Shares on the Composite Tape on such date, as published in the
Western
14
<PAGE>
Edition of The Wall Street Journal, on the principal national securities
exchange on which the Common Shares are so listed or admitted to trade, or,
if there is no trading of the Shares on such date, then the average of the
high and low reported sales prices of the Common Shares as quoted on such
Composite Tape on the next preceding date on which there was trading in
such Shares; (ii) if the Common Shares are not listed or admitted to trade
on a national securities exchange, the average of the high and low reported
prices for the Common Shares on such date, as furnished by the National
Association of Securities Dealers, Inc. ("NASD") through the NASDAQ
National Market Reporting System (or a similar organization, if the NASD is
no longer reporting such information); (iii) if the Common Shares are not
listed or admitted to trade on a national securities exchange and are not
reported on the National Market Reporting System, the arithmetic mean
between the bid and asked prices for the Shares on such date, as furnished
by the NASD or a similar organization; or (iv) if the Common Shares are not
listed or admitted to trade on a national securities exchange nor reported
on the National Market Reporting System and if bid and asked prices for the
stock are not furnished by the NASD or a similar organization, the value as
established by the Board at such time for purposes of this Plan.
"Retirement" shall mean retirement or resignation as a director
----------
after at least five (5) years service as a director.
(c) Annual Awards. On the first Business Day in June in each
-------------
calendar year during the term of the Plan, commencing in June 1996, there
shall be granted automatically (without any action by the Committee or the
Board) a nonqualified stock option (the grant date of which shall be such
date in June) to each Non-Officer Director then in office to purchase the
number of Common Shares equal to 30,000 multiplied by a fraction, the
numerator of which is the earnings per Common Share (on a fully diluted
basis) of the Company for the fiscal year of the Company ended immediately
before the date of grant of the Non-Officer Director option (as reported in
the audited Financial Statements included in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission ("SEC"), but in
no event less than zero) (the "EPS Numerator Amount") and the denominator
--------------------
of which is (i) in 1996, $1.15; and (ii) in each year after 1996, the
greater of (x) $1.32 compounded at a rate of 15% per year (i.e., in 1998,
$1.52; in 1999, $1.75; and in 2000, $2.01), or (y) the EPS Numerator Amount
for the fiscal year of the Company ended immediately before the fiscal year
used in determining the
15
<PAGE>
EPS Numerator Amount. The number 30,000 and the specific dollar amounts
herein are subject to adjustment in those events set forth in clause (i)
below.
(d) Maximum and Minimum Number of Shares. Notwithstanding
------------------------------------
anything to the contrary contained herein, a Non-Officer Director shall not
receive Options for less than 20,000 nor more than 50,000 Common Shares
pursuant to this Section 10 in any year.
(e) Purchase Price. The exercise price for Shares under each
--------------
Non-Officer Director option shall be equal to 100% of the Fair Market Value
of a Common Share on the date the Director Option is granted. The exercise
price of any option granted under this Section 10 shall be paid in full at
the time of each purchase in cash equivalent or in Common Shares valued at
their Fair Market Value on the date of exercise of such option, or partly
in such shares and partly in cash, provided that any such Common Shares
-------- ----
used in payment shall have been owned by the Non-Officer Director at least
six months prior to the date of exercise.
(f) Option Period and Exercisability. Each Director Option
--------------------------------
granted under this Section 10 shall become fully exercisable, in whole or
in part, on the first anniversary of the grant date. Each option granted
under this Section 10 and all rights or obligations thereunder shall expire
on the earlier of the fifth anniversary of the date of grant or the
liquidation or dissolution of the Company and shall be subject to earlier
termination as provided below.
(g) Termination of Directorship. If a Non-Officer Director's
---------------------------
services as a member of the Board of Directors terminate by reason of
death, Disability or Retirement, an option granted pursuant to this Section
10 then held by such Non-Officer Director shall immediately become and
shall remain exercisable for one year after the date of such termination or
until the expiration of the stated term of such option, whichever first
occurs. If a Non-Officer Director's services as a member of the Board
terminate for any other reason (other than Cause), any option granted
pursuant to this Section 10 which is not then exercisable shall terminate
and any such option which is then exercisable may be exercised for three
months after the date of such termination or until the expiration of the
stated term, whichever first occurs. If Non-Officer Director is terminated
for Cause, all Director Options granted to such Non-Officer Director shall
be forfeited and shall no longer be exercisable, effective on the date of
16
<PAGE>
such termination for Cause. For purposes of this Section 10, "Cause" shall
mean, with respect to any Non-Officer Director, termination on account of
any act of (i) fraud or intentional misrepresentation, (ii) embezzlement,
misappropriation or conversion of assets or opportunities of the Company or
any affiliate, or (iii) conviction of a felony.
(h) Adjustments. The provisions of this Section 10 and Director
-----------
Options granted hereunder shall be subject to Section 6. If there shall
occur any event described in Section 6(a), then in addition to the matters
contemplated thereby, the Board shall, in such manner and to such extent
(if any) as is appropriate and equitable, proportionately adjust the dollar
amounts set forth elsewhere in this Section 10.
(i) Loans. Subject to the requirements of applicable law, the
-----
Board may authorize loans to Non-Officer Directors to finance the exercise
of Awards; provided, however, that no loan shall be made to any Non-Officer
Director to finance the exercise of an Award made under this Section 10
unless (i) such loan is made pursuant to a full recourse promissory note,
and (ii) such loan, if secured by Common Shares (whether issuable under the
Award in question or otherwise), is made in compliance with Regulation G of
the Federal Reserve Board.
(j) Acceleration Upon a Change in Control. Upon the
-------------------------------------
occurrence of a Change in Control referred to in Section 6(b), each
Director Option granted under this Section 10 shall become immediately
exercisable in full subject to the terms thereof (other than with respect
to the Committee's discretion). To the extent that any Director Option
granted under this Section 10 is not exercised prior to (i) a dissolution
of the Company or (ii) a merger or other corporate event that the Company
does not survive, and no provision is (or consistent with the provisions of
Sections 9 or 10 can be) made for the assumption, conversion, substitution
or exchange of the option, the Director Option shall terminate upon the
occurrence of such event.
(k) Limitation on Amendments and Changes. Without limiting the
------------------------------------
generality of Section 7, unless otherwise permitted under Rule 16b-3, the
provisions of this Section 10 shall not be amended more than once every six
months other than to comport with changes in the Code, the Employee
Retirement Income Security Act ("ERISA") or the rules thereunder.
-----
17
<PAGE>
(l) Other Provisions. The provisions of Sections 3(f)-(g),
----------------
5(h) and 7 through 9 are incorporated herein by this reference. It is the
intent of the Company that this Section 10 constitute a formula plan within
the meaning of Rule 16b-3(c)(2)(ii) and that this Section 10 be construed
in a manner consistent with such intent. Unless the context otherwise
requires and to the extent required for purposes of Rule 16b-3, the
provisions of this Section 10 shall be construed as a separate plan.
18
<PAGE>
EXHIBIT 5
[CWM MORTGAGE HOLDINGS, INC. LETTERHEAD]
July 26, 1996
CWM Mortgage Holdings, Inc.
35 North Lake Avenue
Pasadena, California 91101
Ladies and Gentlemen:
I have acted as counsel to CWM Mortgage Holdings, Inc., a Delaware
Corporation (the "Company") in connection with the preparation of a Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, relating to the offer of up to 4,000,000 shares (the "Shares") of common
stock of the Company, par value $.01, to be issued under the terms and
conditions of awards granted under the Company's 1996 Stock Incentive Plan (the
"1996 Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Securities Act").
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
(i) the Registration Statement, filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act on July 26, 1996 (as such
Registration Statement may be subsequently amended and together with all
exhibits thereto, the "Registration Statement"), (ii) the 1996 Plan, (iii) the
Certificate of Incorporation of the Company as currently in effect, (iv) the By-
laws of the Company as currently in effect, (v) a specimen of the certificate to
be used to represent the Common Stock, and (vi) resolutions of the Board of
Directors of the Company relating to the issuance of the Shares and the filing
of the Registration Statement. I have also examined originals or copies,
certified or otherwise identified to my satisfaction, of such records of the
Company and such agreements, certificates of public officials, certificates of
officers or representatives of the Company and others, and such other documents,
certificates and records, as I have deemed necessary or appropriate as a basis
for the opinion set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinion expressed herein, I have relied upon oral or written statements
and representations of officers and other representatives of the Company and
others. I have also assumed that the Shares will be issued for proper and
sufficient consideration, in accordance with the terms of the 1996 Plan, and
that the certificates representing such Shares will be properly issued.
<PAGE>
Based upon and subject to the foregoing, I am of the opinion that the
Shares, when issued and paid for in accordance with the 1996 Plan, will be
validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement. This opinion is furnished to you solely
in connection with the Registration Statement.
Very truly yours,
/s/ Richard H. Wohl
Richard H. Wohl
General Counsel
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We have issued our report dated February 19, 1996, accompanying the consolidated
financial statements and schedules included in the Annual Report of CWM Mortgage
Holdings, Inc. on Form 10-K for the year ended December 31, 1995. We hereby
consent to the incorporation by reference of said report in this Registration
Statement of CWM Mortgage Holdings, Inc. on Form S-8.
/s/ GRANT THORNTON LLP
Los Angeles, California
July 26, 1996
