2003 Non-Employee Directors' Fee Plan - Countrywide Financial Corp.
COUNTRYWIDE FINANCIAL CORPORATION
2003 NON-EMPLOYEE DIRECTORS' FEE PLAN
SECTION 1
PURPOSE
The Countrywide Financial Corporation 2003 Non-Employee Directors' Fee
Plan (the "Plan") has been established by Countrywide Financial Corporation (the
"Company"), effective as of January 1, 2004 (the "Effective Date") to attract
and retain as members of its Board of Directors persons who are not employees of
the Company or any of its subsidiaries but whose business experience and
judgment are a valuable asset to the Company and its subsidiaries. The Plan
provides for the payment to Directors of fees in the form of some or all of the
following: Annual Retainer Fee, Chairman Retainer Fee, Meeting Fees, and
Restricted Stock Awards (generally, the "Director Fees").
SECTION 2
DIRECTORS COVERED
As used in the Plan, the term "Director" means any person who is
elected to the Board of Directors of the Company as of the Effective Date or at
any time thereafter, and is not an employee of the Company or any of its
subsidiaries.
SECTION 3
FEES PAYABLE TO DIRECTORS
3.1 Annual Retainer Fee. Each Director shall be entitled to an
annual retainer fee (the "Retainer Fee") to be paid quarterly, on the last
business day of the quarter for which the Director served in the capacity as a
Director (excluding, on a pro rata basis, the month in which he or she is first
elected a Director and any whole months in which he or she did not serve in such
capacity). The amount of the Annual Retainer Fee shall be as determined in the
sole discretion of the Board of Directors of the Company (the "Board"), with
such amount initially set at Seventy Thousand ($70,000.00) per year until such
time as the Board adjusts such amount.
3.2 Chairman Retainer Fee. A Director who serves as Chairman of
the Board or any committee created by the Board shall be entitled to an
additional annual retainer fee (the "Chairman Retainer Fee") to be paid
quarterly, on the last business day of the quarter for which the Director served
in the capacity as a chairman (excluding, on a pro rata basis, the month in
which he or she is first selected to be the chairman and any whole months in
which he or she did not serve in such capacity). The amount of the Chairman
Retainer Fee shall be as determined in the sole discretion of the Board, with
such amount initially set at Seven Thousand Five Hundred ($7,500.00) per year
until such time as the Board adjusts such amount.
3.3 Meeting Fees. A Director who attends a meeting of the full
Board shall be entitled to an additional fee (the "Meeting Fee") to be paid on
the last business day of the quarter in which the meeting was held. The amount
of the Meeting Fee shall be as determined in the sole discretion of the Board,
with such amount initially set at One Thousand Five Hundred Dollars ($1,500.00)
for each Board attended in person and Seven Hundred and Fifty Dollars
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($750.00) for each meeting attended other than in person, in a manner acceptable
to the Board, until such time as the Board adjusts such amounts.
SECTION 4
RESTRICTED STOCK.
4.1 Annual Restricted Stock Award. Annually, on the first business
day of April, each Director (other than a Director Emeritus - as may be defined
by the Committee from time to time), shall be granted shares of Company's Common
Stock, par value $0.05 per share (the "Stock"), subject to certain restrictions
set forth below (the "Restricted Stock"). The number of shares covered by the
Restricted Stock Award shall be equal to that number of shares whose aggregate
value (based on the Fair Market Value of a share of Stock on the date of grant)
equals Two Hundred Twenty Thousand Dollars ($220,000.000), until such time as
the Board adjusts such amounts, rounded down to the next whole share. The term
"Fair Market Value" shall be as defined in the 2000 Plan (as defined in Section
6.6 below).
4.2 Issuance of Certificates. Subject to the deferral provisions
of Section 9, as soon as practicable following the date of grant of a Restricted
Stock Award, the Company shall issue certificates (the "Certificates") to the
Director receiving the Restricted Stock Award, representing the number of shares
of Stock covered by the Award. Each Certificate shall bear a legend describing
the restrictions on such shares imposed by this Section 4 and may be retained by
the Company during the Restricted Period.
4.3 Rights. Upon issuance of the Certificates, the Directors in
whose names they are registered shall, subject to the restrictions of this
Section 4, have all of the rights of a shareholder with respect to the shares
represented by the Certificate, including the right to vote such shares and to
receive cash dividends and other distributions thereon.
4.4 Restricted Period. The shares covered by Awards granted under
this Section 4 may not be sold or otherwise disposed of within six (6) months
following their grant date (unless such sale would not affect the exemption
under Rule 16b-3 of the Securities and Exchange Commission) and in addition
shall be subject to the restrictions of this paragraph 4 during the "Restricted
Period." The Restricted Period shall be the period commencing as of the date of
grant and shall lapse with respect to all of the Restricted Stock as of the
business day immediately preceding the anniversary date of the grant.
Notwithstanding the foregoing, the Restricted Period shall lapse and the
Director shall become fully vested in the Restricted Stock upon the earliest of
the following to occur:
(i) The date of the Director's death or disability (as defined by
the Board);
(ii) The date of a Corporate Change (as defined in Section 9 of the
2000 Plan); or
(iii) The date on which the Director becomes a Director Emeritus.
4.5 Restrictions. All shares covered by Awards granted under this
Section 4 shall be subject to the following restrictions during the Restricted
Period:
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(i) Except as may otherwise be provided by the Board, the shares
may not be sold, assigned, transferred, pledged, hypothecated
or otherwise disposed of.
(ii) Any additional common shares of the Company or other
securities or property issued with respect to shares covered
by Awards granted under this Section 4 as a result of any
stock dividend, stock split or reorganization, shall be
subject to the restrictions and other provisions of this
Section 4.
(iii) A Director shall not be entitled to receive any shares prior
to completion of all actions deemed appropriate by the Company
to comply with federal or state securities laws and stock
exchange requirements.
4.6 Forfeiture. Except as otherwise provided in Section 4.4(i),
(ii) and (iii), in the event that the Director's Date of Termination occurs
prior to the business day immediately preceding the first anniversary of the
date of grant, the Director shall forfeit any and all rights and interests with
respect to such unvested Restricted Stock (or Restricted Stock Units, if a
Deferral Election is applicable) and the Company shall have the right to cancel
any such Certificates evidencing such Restricted Stock.
4.7 Date of Termination. A Director's "Date of Termination" shall
be the date on which the Director is no longer providing services to the Company
as a Director.
SECTION 5
CHANGE IN CONTROL
In the event of a Corporate Change, the Restricted Period with respect
to all unvested Restricted Stock (or corresponding Restricted Stock Units) shall
immediately lapse and the Director shall become fully vested in such shares of
Stock (or Stock Units, as the case may be).
SECTION 6
OPERATION AND ADMINISTRATION
6.1 Administration.
(i) The Plan and all benefits pursuant thereto shall be
administered by the full Board.
(ii) The Board shall have the authority and discretion to interpret
and administer the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan and to determine
the terms and provisions of any Award Agreement made pursuant
to the Plan. All questions of interpretation with respect to
the Plan, the benefits established herein, the number of
shares of Stock, or other security, or rights granted and the
terms of any agreements evidencing any of the Director Fees
(the "Award Agreements"), including the timing, pricing, and
amounts of Awards, shall be determined by the Board, and its
determination shall be final and conclusive upon all parties
in interest. In the event of any conflict between an Award
Agreement and this Plan, the terms of this Plan shall govern.
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(iii) Except to the extent prohibited by applicable law or the
applicable rules of a stock exchange, the Board may delegate
to the officers or employees of the Company and its
Subsidiaries the authority to execute and deliver such
instruments and documents, to do all such acts and things, and
to take all such other steps deemed necessary, advisable or
convenient for the effective administration of the Plan in
accordance with its terms and purpose, except that the Board
may not delegate any discretionary authority with respect to
substantive decisions or functions regarding the Plan or
benefits and Awards thereunder, including, but not limited to,
decisions regarding the timing, eligibility, pricing, amount
or other material terms of such benefits or Awards. Any such
delegation may be revoked by the Board at any time.
(iv) To the extent that the Board determines that the restrictions
imposed by the Plan preclude the achievement of the material
purposes of the benefit provided herein in jurisdictions
outside the United States, if applicable, the Board will have
the authority and discretion to modify those restrictions as
the Board determines to be necessary or appropriate to conform
to applicable requirements or practices of jurisdictions
outside of the United States.
6.2 Limits of Liability.
(i) Any liability of the Company to any Director with respect to
an Award shall be based solely upon contractual obligations
created by the Plan and the applicable Award Agreement.
(ii) Neither the Company, nor any member of the Board, nor any
other person participating in any determination of any
question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any
liability to any party for any action taken or not taken in
good faith under the Plan except as may be expressly provided
by statute.
6.3 Rights of Directors. Nothing contained in this Plan or in any
Award Agreement (or in any other documents related to this Plan or to any Award
or Award Agreement) shall confer upon any Director any right to continue in the
service of the Company or a Subsidiary, constitute any contract or limit in any
way the right of the Company or a Subsidiary to change such person's
compensation or other benefits or to terminate the service of such person with
or without cause or confer any right on the part of such person to be nominated
for reelection to the Board, to be reelected to the Board or to be appointed to
any committee of the Board.
6.4 Form and Time of Elections. Any election required or permitted
under the Plan shall be in writing, and shall be deemed to be filed when timely
delivered to the Company. Any election to defer Director Fees, as provided in
Section 9, shall be irrevocable after the commencement of the year for which it
is filed, and such election shall remain in effect with respect to any
subsequent years unless a new election with respect to such subsequent years is
filed in accordance with rules established by the Board, in which case such new
election shall be applicable with respect to such subsequent years.
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6.5 Action by Company. Any action required or permitted to be
taken by the Company shall be by resolution of the Board, or by action of one or
more members of the Board (including a committee of the Board) who are duly
authorized to act for the Board or (except to the extent prohibited by the
provisions of Rule 16b-3, applicable local law, the applicable rules of any
stock exchange, or any other applicable rules) by a duly authorized officer of
the Company.
6.6 2000 Equity Incentive Plan. Any shares of Stock awarded to, or
subject to Awards granted to Directors under this Plan as Director Fees shall be
issued pursuant to the 2000 Equity Incentive Plan of Countrywide Financial
Corporation (the "2000 Plan") or any successor plan, subject to all of the terms
and conditions herein. Except in the event of conflict, all provisions of the
2000 Plan shall apply to this Plan. In the event of any conflict between the
provisions of the 2000 Plan and this Plan, this Plan shall control, provided
that the Director Fees granted herein may not exceed the share limitations set
forth in the 2000 Plan.
SECTION 7
MISCELLANEOUS
7.1 Beneficiaries. Each Director or former Director entitled to
payment of Director Fees hereunder, from time to time may name any person or
persons (who may be named contingently or successively) to whom any Director
Fees earned by him and payable to him are to be paid in case of his death before
he or she receives any or all of such Director Fees. Each designation will
revoke all prior designations by the same Director or former Director, shall be
in form prescribed by the Company, and will be effective only when filed by the
Director or former Director in writing with the Secretary of the Company during
his lifetime. If a deceased Director or former Director shall have failed to
name a beneficiary in the manner provided above, or if the beneficiary named by
a deceased Director or former Director dies before him or before payment of all
the Director's or former Director's Director Fees, the Company, in its
discretion, may direct payment in a single sum of any remaining Director Fees to
either:
(i) any one or more or all of the next of kin (including the
surviving spouse) of the Director or former Director, and in
such proportions as the Company determines; or
(ii) the legal representative or representatives of the estate of
the last to die of the Director or former Director and his
last surviving beneficiary.
The person or persons to whom any deceased Director's or former Director's
Director Fees are payable under this paragraph will be referred to as his
"beneficiary."
7.2 Alienation of Rights. Payment of Director Fees will be made
only to the person entitled thereto in accordance with the terms of the Plan,
and Director Fees are not in any way subject to the debts or other obligations
of persons entitled thereto, and may not be voluntarily or involuntarily sold,
transferred or assigned. When a person entitled to a payment under the Plan, in
the Company's opinion, is in any way incapacitated so as to be unable to manage
his financial affairs, the Company may direct that payment be made to such
person's legal representative, or to a relative or friend of such person for his
benefit. Any payment made in accordance with the
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preceding sentence shall be in complete discharge of the Company's obligation to
make such payment under the Plan.
7.3 Unfunded Plan. The Plan shall be unfunded. Neither the Company
nor the Board shall be required to segregate any assets that may at any time be
represented by benefits or Awards made pursuant to the Plan. Neither the Company
nor the Board shall be deemed to be a trustee of any amounts to be paid under
the Plan. Neither the Director nor any other person shall, by reason of
participation in the Plan, the deferral of shares of Stock or the deferral of a
cash payment, acquire any right in or title to any assets, funds or property of
the Company whatsoever prior to the date such shares of Stock or cash are
distributed. A Director shall have only a contractual right to the shares of
Stock and cash, if any, distributable under the Plan, unsecured by any assets of
the Company. Nothing contained in the Plan shall constitute a guarantee by the
Company that the assets of the Company shall be sufficient to provide any
benefits to any person. The Company may, but shall not be obligated to,
establish a trust to hold assets for the purpose of satisfying obligations under
this Plan.
7.4 Adjustment Provisions. In the event of a corporate transaction
involving the Company (including, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), in
addition to any adjustments made pursuant to Section 8 of the 2000 Plan, the
Board may make equitable adjustments to the Director Fees (including Deferred
Fees) to preserve the benefits or potential benefits of participation in the
Plan.
7.5 Gender and Number. Where the context admits, words in any
gender shall include any other gender, words in the singular shall include the
plural and the plural shall include the singular.
SECTION 8
AMENDMENT AND DISCONTINUANCE
The Board may, at any time, amend or terminate the Plan, and may amend
any Award Agreement, provided that no amendment or termination may, in the
absence of written consent to the change by the affected Director (or, if the
Director is not then living, the affected beneficiary), adversely affect the
rights of any Director or beneficiary under any Award granted under the Plan
prior to the date such amendment is adopted by the Board; and further provided,
that adjustments pursuant to paragraph 7.4 shall not be subject to the foregoing
limitations of this Section 8. Any amendment or discontinuance of the Plan shall
be prospective in operation only, and shall not affect the payment of any
Director Fees theretofore earned by any Director, or the conditions under which
any such fees are to be paid or forfeited under the Plan, unless the Director
affected shall expressly consent thereto.
SECTION 9
ELECTIVE DEFERRALS
9.1 DEFERRAL ELECTION
(i) General. A Director who is otherwise entitled to receive
Director Fees in the form of shares of Stock or a cash payment
under the terms of the Plan may elect
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to defer delivery of all or a portion of such fees, subject to
the following terms of this Section 9 (once deferred, the
"Deferred Fees").
(ii) Deferral Election. An election to defer the Director Fees into
a Cash Account and Stock Unit Account shall be filed prior to
the first day of the calendar year in which the cash would
otherwise have been delivered to the Director. The election to
defer the Director Fees shall be made on an election form as
provided by the Board (the "Deferral Election").
The Deferral Election form shall provide for the types and
amounts of the Director Fees to be deferred and shall provide
for the timing and method of distribution at the end of the
applicable deferral period.
(iii) Conversion of Cash or Stock to Stock Units. Deferred Fees
credited to a Stock Unit Account, as defined below, under this
Section 9 shall be converted to Stock Units by dividing the
cash-based Director Fees so credited by the Fair Market Value
of the Stock as of the date such Director Fees would otherwise
have been paid or granted had the Director not made a Deferral
Election. The Stock Unit Account will be credited with Stock
Units equal to the number of shares of Restricted Stock as to
which the Director has elected deferred receipt, with such
Stock Units to be credited as of the date on which the shares
of Stock would otherwise have been delivered to him in the
absence of the deferral. To the extent that Stock Units are
credited to the Director's Stock Unit Account with respect to
the deferral of a Restricted Stock Award, such Stock Units
shall have the same restrictions and vesting provisions as
were applicable to the Restricted Stock Award.
9.2 ACCOUNTS
(i) Stock Unit Accounts. A "Stock Unit Account" shall be
maintained on behalf of each Director who elects to defer all
or a portion of his Director Fees under this Section 9, for
the period during which delivery of such fees is deferred. A
separate Stock Unit Account shall be established for each
calendar year in which the Director elects to have all or a
portion of the Director Fees deferred. A Director's Stock Unit
Account(s) shall be subject to the following adjustments:
(a) The Stock Unit Account will be credited with Stock
Units, with such Stock Units to be credited as of the
date on which the Director Fees would otherwise have
been delivered to him in the absence of the deferral.
(b) As of each dividend payment date for the Stock
following the date any Stock Units are credited to
the Director's Stock Unit Account, and prior to the
date of distribution with respect to those Stock
Units, the Director's Stock Unit Account shall be
credited with additional Stock Units (including
fractional Stock Units) equal to (i) the amount of
the dividend that would be payable with respect to
the number of shares of Stock equal to the number of
Stock Units credited to the Director's Stock Unit
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Account on the dividend record date, divided by (ii)
the Fair Market Value of a share of Stock on the date
of payment of the dividend.
(c) As of the date of any distribution with respect to a
Director's Stock Unit Account under Section 9.3, the
Stock Units credited to a Director's Stock Unit
Account shall be reduced by the amounts distributed
to the Director.
(ii) Cash Account. A Cash Account shall be maintained on behalf of
each Director who elects to defer the distribution of
cash-based Director Fees provided herein, for the period
during which delivery of cash is deferred. A Director's Cash
Account shall be credited with a notional rate of return based
upon investment(s) selected by the Board in its sole
discretion, and reflected on the Deferral Election Form. As of
the date of any distribution with respect to a Director's Cash
Account under Section 9.3, the balance credited to a
Director's Cash Account shall be reduced by the amount of the
distribution to the Director.
(iii) Statement of Accounts. As soon as practicable after the end of
each Year, the Company shall provide each Director having a
Stock Unit Account or Cash Account under the Plan with a
statement of the transactions in such Accounts during that
year and the Account balances as of the end of the year.
9.3 DISTRIBUTIONS
(i) General. Subject to the terms of this Section 9.3, a Director
shall specify, as part of his Deferral Election with respect
to Deferred Fees, the time and manner of the distribution of
the amounts deferred pursuant to such election; provided that
the distribution date for the Director's Stock Unit Account
and Cash Account may differ. In the event that no election is
made with respect to the timing or method of distribution as
of the date of the Director's termination, the Director's
entire Stock Unit Account and Cash Account shall be
distributed in a single lump sum as of the first anniversary
the Director's date of termination.
(ii) At the time of distribution of the Stock Unit Account, shares
in accordance with the Director's Deferral Election, the
Director shall receive a distribution of shares of Stock equal
to the number of Stock Units in his Stock Unit Account subject
to distribution. If the scheduled distribution date would
otherwise occur after a dividend record date but before the
payment of the dividend, distribution may, in the Board's
discretion, be deferred (not more than 30 days) until the
dividend is paid.
(iii) At the time of distribution of the Cash Account in accordance
with the Director's Deferral Election, the Director shall
receive a cash payment equal to the amount in his Cash Account
then subject to distribution.
(iv) In determining a Director's right to distributions under this
Section 9.3, the vesting provisions of section 4 or 5 of the
Plan shall apply to the Stock Units credited to the Director's
Stock Unit Account as though each unit represented one
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share of Stock, and with all units attributable to payment of
dividends being fully vested as of the date they are credited
to the Director's Stock Unit Account.
(v) Termination of Deferral by Company. The Board shall retain the
right to terminate, at any time, for any reason, or no reason,
the deferral provisions under this Section 9 (which may, but
need not, be in conjunction with a termination of the Plan),
and shall immediately distribute all, but not less than all,
of the Stock Unit Accounts and Cash Accounts as of the date of
such termination. In the event that the Board terminates the
Plan pursuant to the foregoing, the Restricted Period with
respect to all unvested Restricted Stock Units shall
immediately lapse and the Director shall become fully vested
in such Stock Units.
IN WITNESS WHEREOF, the Company has caused this Director Fee Plan to be
executed by its duly authorized officer this 1st day of January, 2004
Countrywide Financial Corporation
By: /s/ Thomas H. Boone
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Thomas H. Boone
Senior Managing Director, Chief
Administrative Officer
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