Employment Agreement - Countrywide Credit Industries Inc. and Stanford L. Kurland
FIRST RESTATED EMPLOYMENT AGREEMENT
THIS FIRST RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into as of September 11, 2000 by and between Countrywide Credit Industries,
Inc., a Delaware corporation ("Employer"), and Stanford L. Kurland ("Officer").
W I T N E S S E T H:
WHEREAS, Officer currently holds the offices of Executive Managing
Director and Chief Operating Officer of Employer, and President and Chief
Executive Officer of Countrywide Home Loans, Inc. ("Home Loans"), a wholly-owned
subsidiary of Employer; and
WHEREAS, Employer desires to obtain the benefit of continued services
of Officer and Officer desires to continue to render services to Employer and
its subsidiaries, including Home Loans; and
WHEREAS, the Board of Directors of Employer (the "Board") has
determined that it is in Employer's best interest and that of its stockholders
to recognize the substantial contribution that Officer has made and is expected
to continue to make to the Employer's business and to retain his services in the
future; and
WHEREAS, Employer and Officer set forth the terms and conditions of
Officer's employment with Employer under an employment agreement entered into as
of March 1, 1999; and
WHEREAS, Employer and Officer desire to set forth the continued terms
and conditions of Officer's employment with Employer under this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Term. Employer agrees to employ Officer and Officer agrees to serve
Employer, in accordance with the terms hereof, for a term beginning on the
Effective Date (as defined in Section 8(c) hereof) and ending on February 28,
2003, unless earlier terminated in accordance with the provisions hereof.
2. Specific Position; Duties and Responsibilities. Employer and Officer
hereby agree that, subject to the provisions of this Agreement, Employer will
employ Officer and Officer will serve Employer as Executive Managing Director
and Chief Operating Officer of Employer and as President and Chief Executive
Officer of Home Loans. Except as set forth in Section 5(d)(ii) hereof, Employer
agrees that Officer's duties hereunder shall be the usual and customary duties
of such offices or such other duties as may be designated from time to time by
the Board consistent with his status as an executive officer of Employer any
such duties shall be consistent with the provisions of the charter documents of
Employer or applicable law. Officer shall have such executive power and
authority as shall reasonably be required to enable him to discharge his duties
in the offices which he may hold. All compensation paid to Officer by Employer
or any of its subsidiaries shall be aggregated in determining whether Officer
has received the benefits provided for herein.
3. Scope of this Agreement and Outside Affiliations. During the term of
this Agreement, Officer shall devote his full business time and energy, except
as expressly provided below, to the business, affairs and interests of Employer
and its subsidiaries, and matters related thereto, and shall use his best
efforts and abilities to promote its interests. Officer agrees that he will
diligently endeavor to promote the business, affairs and interests of Employer
and its subsidiaries and perform services contemplated hereby in accordance with
the policies established by the Board, which policies shall be consistent with
this Agreement. Officer agrees to serve without additional remuneration as an
officer of one or more (direct or indirect) subsidiaries of Employer as the
Board may from time to time request, subject to appropriate authorization by the
subsidiary or subsidiaries involved and any limitation under applicable law.
Officer's failure to discharge an order or perform a function because Officer
reasonably and in good faith believes such would violate a law or regulation or
be dishonest shall not be deemed a breach by him of his obligations or duties
pursuant to any of the provisions of this Agreement, including without
limitation pursuant to Section 5(c) hereof.
During the course of Officer's employment as a full-time officer
hereunder, Officer shall not, without the consent of the Board, compete,
directly or indirectly, with Employer in the businesses then conducted by
Employer or any of its subsidiaries.
Officer may serve as a director or in any other capacity of any
business enterprise, including an enterprise whose activities may involve or
relate to the business of Employer, provided that such service is expressly
approved by the Board. Officer may make and manage personal business investments
of his choice and serve in any capacity with any civic, educational or
charitable organization, or any governmental entity or trade association,
without seeking or obtaining approval by the Board, provided such activities and
services do not materially interfere or conflict with the performance of his
duties hereunder.
4. Compensation and Benefits.
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(a) Base Salary. Employer shall pay to Officer a base salary
after the Effective Date at the annual rate of $744,187.50 (the "Annual Rate").
In respect of the Fiscal Years ending in 2000, 2001, 2002 and 2003 the
Compensation Committee of the Board (the "Compensation Committee") shall, based
upon the recommendation of Angelo R. Mozilo (or, if he is no longer an officer
of Employer, the Chairman of Employer), increase the Annual Rate by no less than
5% and no greater than 10% each year. Any such increase shall be effective not
later than June 1 of the fiscal year in which the increase is granted.
(b) Incentive Compensation. Employer shall pay to Officer for
each of the Fiscal Years ending during the term of this Agreement an incentive
compensation award in an amount determined pursuant to the terms and conditions
of the Countrywide Credit Industries, Inc. Annual Incentive Plan (the "Annual
Incentive Plan") and set out in the Incentive Matrix attached hereto as Appendix
B; provided, however, that, unless a "Change in Control" (as defined in Appendix
A to this Agreement) has occurred, the effectiveness of the incentive
compensation award for the final two Fiscal Years ending during the term of this
Agreement is subject to the approval by Employer's stockholders of an annual
incentive plan containing substantially the terms of the Annual Incentive Plan
on or before the Employer's 2001 Annual Meeting of Stockholders in accordance
with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") and the regulations promulgated thereunder. Any such incentive
compensation award shall be paid to Officer no later than June 1 following the
end of the fiscal year in respect of which the incentive compensation award is
being paid.
(c) Stock Options. Employer shall grant to Officer stock
options in respect of each of the Fiscal Years ending during the term of this
Agreement for such number of shares of Employer's common stock as the
Compensation Committee in its sole discretion determines, taking into account
Officer's and Employer's performance in each of such Fiscal Years and the
competitive practices then prevailing regarding the granting of stock options;
provided, however, that the number of shares in respect of each annual stock
option grant shall be no less than 100,000 and no greater than 250,000. The
numbers 100,000 and 250,000 in the preceding sentence shall be adjusted
proportionately in the event Employer (A) declares a stock dividend on its
common stock, (B) subdivides its outstanding common stock, (C) combines the
outstanding shares of its capital stock into a smaller number of common stock,
or (D) issues any shares of its capital stock in a reclassification of the
common stock (including any such reclassification in connection with a
consolidation or merger in which Employer is the continuing or surviving
corporation). The stock options described in this Section 4(c) in respect of a
Fiscal Year shall be granted at the same time as Employer grants stock options
to its other senior executives in respect of such Fiscal Year (but in no event
later than June 30 following the end of such Fiscal Year).
All stock options granted in accordance with this Section 4(c): (i) shall be
granted pursuant to the Countrywide Credit Industries, Inc. 2000 Stock Option
Plan, as
amended (the "2000 Plan"), or such other stock option plan or plans as may be or
come into effect during the term of this Agreement, (ii) shall have a per share
exercise price equal to the fair market value (as defined in the 2000 Plan or
such other plan or plans) of the common stock at the time of grant, (iii) shall
become exercisable in three equal installments on each of the first three
anniversaries of the date of grant and (iv) shall be subject to such other terms
and conditions as may be determined by the Compensation Committee and set forth
in the agreement evidencing the award. In the event of a merger, consolidation
or reorganization in which Employer is not the surviving corporation or in which
it survives as a subsidiary of another corporation or entity (a "Transaction"),
and the shares of equity securities of the surviving corporation or entity or
parent thereof are publicly traded on a recognized stock exchange or over the
counter market, the stock options to be granted pursuant to this Section 4(c)
after the date of the Transaction shall be granted in accordance herewith with
respect to securities of the surviving corporation or entity or parent thereof,
as applicable, with the number of shares subject to options to be granted to
equal the product of (x) the amount of shares subject to the options set forth
in this Section 4(c) and (y) a fraction the numerator of which is the per share
fair market value of the Employer's securities and the denominator of which is
the per share fair market value of the publicly-traded common or ordinary equity
securities of the surviving corporation or entity or parent thereof, in each
case as of the date of consummation of the Transaction, and to give effect to
the intent of the parties as set forth in this Section 4(c). The stock options
granted pursuant to this Section shall consist of incentive stock options to the
extent permitted by law or regulation. From and after the Termination Date, the
Officer shall no longer be entitled to receive additional options under this
Section 4(c) other than those which were due for previously completed fiscal
years.
(d) Additional Benefits. Officer shall also be entitled to all
rights and benefits for which he is otherwise eligible under any bonus plan,
stock purchase plan, participation or extra compensation plan, executive
compensation plan, pension plan, profit-sharing plan, life and medical insurance
policy, executive medical examination program, executive long-term disability
policy, financial planning services program or other plans or benefits, which
Employer or its subsidiaries may provide for him, or provided he is eligible to
participate therein, for senior officers generally or for employees generally,
during the term of this Agreement (collectively, "Additional Benefits"). This
Agreement shall not affect the provision of any other compensation, retirement
or other benefit program or plan of Employer.
(e) Continuation of Benefits. If Officer's employment is
terminated hereunder pursuant to Section 5(a), 5(b) or 5(d), Employer shall
continue for the period specified in Section 5(a), 5(b) or 5(d) hereof to
provide benefits that are no less favorable in the aggregate than those
Additional Benefits (other than qualified pension or profit sharing plan
benefits and option, equity or stock appreciation or other incentive plan
benefits as distinguished from health, disability and welfare type benefits)
which were being provided to the Officer and his dependents and beneficiaries
immediately prior to Officer's Termination Date, but only to the extent that
Officer is not entitled to comparable benefits from other employment. For a
period of two years after the Termination Date, Employer shall provide the
Officer outplacement services at its cost.
(f) Deferral of Amounts Payable Hereunder. In the event
Officer should desire to defer receipt of any cash payments to which he would
otherwise be entitled hereunder, he may present such a written request to the
Compensation Committee which, in its sole discretion, may enter into a separate
deferred compensation agreement with Officer.
5. Termination. The compensation and benefits provided for herein and the
employment of Officer ----------- by Employer shall be terminated prior to the
expiration of the term of this Agreement only as provided for below
in this Section 5:
(a) Disability. In the event that Officer shall fail, because
of illness, injury or similar incapacity ("Disability"), to render for four (4)
consecutive calendar months, or for shorter periods aggregating eighty (80) or
more business days in any twelve (12) month period, services contemplated by
this Agreement, Officer's full-time employment hereunder may be terminated, by
written Notice of Termination from Employer to Officer; and thereafter, Employer
shall continue, from the Termination Date until Officer's death or the fifth
anniversary of such notice, whichever first occurs (the "Disability Payment
Period"), (i) to pay compensation to Officer, in the same manner as in effect
immediately prior to the Termination Date, in an amount equal to (1) fifty
percent (50%) of the then existing base salary payable immediately prior to the
termination, minus (2) the amount of any cash payments to him under the terms of
Employer's disability insurance or other disability benefit plans or Employer's
tax-qualified Defined Benefit Pension Plan, and any compensation he may receive
pursuant to any other employment, and (ii) to provide during the Disability
Payment Period the benefits specified in Section 4(e) hereof.
The determination of Disability shall be made only after 30
days notice to Officer and only if Officer has not returned to performance of
his duties during such 30-day period. In order to determine Disability, both
Employer and Officer shall have the right to provide medical evidence to support
their respective positions, with the ultimate decision regarding Disability to
be made by a majority of Employer's disinterested directors.
(b) Death. In the event that Officer shall die during the term
of this Agreement, Employer shall pay Officer's base salary for a period of
twelve (12) months following the date of Officer's death and in the manner
otherwise payable hereunder, to such person or persons as Officer shall have
directed in writing or, in the absence of a designation, to his estate (the
"Beneficiary"). Employer shall also provide during the twelve-month period
following the date of the Officer's death the benefits specified in Section 4(e)
hereof. If Officer's death occurs while he is receiving payments for Disability
under Section 5(a)(i) above, such payments shall cease and the Beneficiary shall
be entitled to the payments and benefits under this Subsection (b), which shall
continue for a period of twelve months thereafter at the full rate of
compensation in effect immediately prior to the Disability. This Agreement in
all other respects will terminate upon the death of Officer; provided, however,
that the termination of the Agreement shall not affect Officer's entitlement to
all other benefits in which he has become vested or which are otherwise payable
in respect of periods ending prior to its termination.
(c) Cause. Employer may terminate Officer's employment under
this Agreement for "Cause." A termination for Cause is a termination by reason
of (i) a material breach of this Agreement by Officer (other than as a result of
incapacity due to physical or mental illness) which is committed in bad faith or
without reasonable belief that such breach is in the best interests of Employer
and which is not remedied within a reasonable period of time after receipt of
written notice from Employer specifying such breach, or (ii) Officer's
conviction by a court of competent jurisdiction of a felony, or (iii) entry of
an order duly issued by any federal or state regulatory agency having
jurisdiction in the matter removing Officer from office of Employer or its
subsidiaries or permanently prohibiting him from participating in the conduct of
the affairs of Employer or any of its subsidiaries. If Officer shall be
convicted of a felony or shall be removed from office and/or temporarily
prohibited from participating in the conduct of Employer's or any of its
subsidiaries' affairs by any federal or state regulatory authority having
jurisdiction in the matter, Employer's obligations under Sections 4(a), 4(b) and
4(c) hereof shall be automatically suspended; provided, however, that if the
charges resulting in such removal or prohibition are finally dismissed or if a
final judgment on the merits of such charges is issued in favor of Officer, or
if the conviction is overturned on appeal, then Officer shall be reinstated in
full with back pay for the removal period plus accrued interest at the rate then
payable on judgments. During the period that Employer's obligations under
Sections 4(a), 4(b) and 4(c) hereof are suspended, Officer shall continue to be
entitled to receive Additional Benefits under Section 4(d) until the conviction
of the felony or removal from office has become final and non-appealable. When
the conviction of the felony or removal from office has become final and
non-appealable, all of Employer's obligations hereunder shall terminate;
provided, however, that the termination of Officer's employment pursuant to this
Section 5(c) shall not affect Officer's entitlement to all benefits in which he
has become vested or which are otherwise payable in respect of periods ending
prior to his termination of employment.
(d) Severance. (i) Except as provided in Section 5(d)(ii), if
during the term of this Agreement Officer's employment shall be terminated by
Employer other than for Cause, then (A) until February 28, 2003 or the second
anniversary of the Termination Date, whichever is later (the "Severance
Period"), Employer shall (1) continue to pay Officer his annual base salary, at
the Annual Rate in effect on the Termination Date, and (2) provide the benefits
specified in Section 4(e) hereof, (B) Employer shall pay Officer, within ten
(10) days after the end of each Fiscal Year ending during the Severance Period,
an amount equal to the total amount of incentive compensation paid or payable to
Officer pursuant to Section 4(b) in respect of the Fiscal Year immediately
preceding the Fiscal Year in which Officer's Termination Date occurs (the "Bonus
Rate"); provided, however, that in the event the Severance Period ends on a date
prior to the end of a Fiscal Year, Employer shall also pay Officer an amount
equal to the product of (1) the Bonus Rate and (2) the fraction obtained by
dividing (x) the number of days elapsed since the end of the immediately
preceding Fiscal Year through the end of the Severance Period by (y) 365, and
(C) all stock options held by Officer on the Termination Date shall become
immediately and fully exercisable.
(ii) If after a "Change in Control" (as defined in Appendix A to this Agreement)
and during the term of this Agreement Officer's employment shall be terminated
by Employer other than for Cause or by Officer for Good Reason, then (A)
Employer shall pay Officer in a single payment as soon as practicable after
the Termination Date, as severance pay and in lieu of any further salary and
incentive compensation for periods subsequent to the Termination Date, an
amount in cash equal to three times the sum of (1) Officer's annual base
salary at the Termination Date and (2) the greater of (x) the average of the
aggregate bonus and/or incentive award, if any, paid or payable to the Officer
for each of the two (2) Fiscal Years preceding the Fiscal Year in which the
Officer's termination of employment occurs (or such fewer number of Fiscal
Years for which the Officer was eligible to receive a bonus and/or incentive
award) and (y) the bonus and/or incentive award paid for the Fiscal Year
immediately preceding the date of the Change in Control, (B) Employer shall
continue to provide for three years from the Termination Date the benefits
specified in Section 4(e) hereof, provided that the coverage and benefits
provided during this period shall be no less favorable to Officer and his
dependents than the most favorable of such coverages and benefits provided
Officer and his 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 Officer's termination and (C) all stock options held by
Officer on the Termination Date shall become immediately and fully
exercisable. For purposes of this Agreement, "Good Reason" shall be deemed to
occur if Employer (x) breaches this Agreement in any material respect, (y)
requires that Officer be based anywhere more than fifty (50) miles from the
office where Officer is located as of the date hereof, or (z) takes any other
action which results in the diminution in Officer's status, title, position
and responsibilities other than an insubstantial action not taken in bad faith
and which is remedied by Employer promptly after receipt of notice by Officer.
Notwithstanding the foregoing, the Officer shall not have Good Reason to
terminate employment with the Employer (or otherwise have the right to claim
that he or she has been constructively terminated from employment) due solely
to the fact that the Employer shall cease to be a public company and shall
become a subsidiary of another publicly-traded corporation.
(e) Resignation. Except as provided in Section 5(d)(ii)
hereof, if during the term of this Agreement, Officer shall resign voluntarily,
all of his rights to payment or benefits hereunder shall immediately terminate;
provided, however, that the termination of Officer's employment pursuant to this
Section 5(e) shall not affect Officer's entitlement to all benefits in which he
has become vested or which are otherwise payable in respect of periods ending
prior to his termination of employment.
(f) Notice of Termination. Any purported termination by
Employer or by Officer shall be communicated by a written Notice of termination
(the "Notice of Termination") to the other party hereto which indicates the
specific termination provision in this Agreement, if any, relied upon and which
sets forth in reasonable detail the facts and circumstances, if any, claimed to
provide a basis for termination of Officer's employment under the provision so
indicated. For purposes of this Agreement, no such purported termination shall
be effective without such Notice of Termination. The "Termination Date" shall
mean the date specified in the Notice of Termination, which shall be no less
than 30 or more than 60 days from the date of the Notice of Termination.
Notwithstanding any other provision of this Agreement, in the event of any
termination of Officer's employment hereunder for any reason, Employer shall pay
Officer his full base salary through the Termination Date, plus any Additional
Benefits which have been earned or become payable, but which have not yet been
paid as of such Termination Date.
(g) Disputes. In the event of a dispute concerning the
validity of a purported termination which is maintained in good faith, the
Termination Date shall mean the date the dispute is finally resolved and
Employer will continue to provide Officer with the compensation and benefits
provided for under this Agreement, until the dispute is finally resolved without
any obligation by Officer to repay any of such amounts to Employer,
notwithstanding the final outcome of the dispute. Payments required to be made
by this Section 5(g) are in addition to all other amounts due under Section 5 of
this Agreement and shall not be offset against or reduce any other amounts due
under Section 5 of this Agreement. Officer shall be required to render services
to Employer during the period following his Termination Date but before the
dispute concerning the termination is finally determined unless Employer fails
to provide Officer with a reasonable opportunity to perform his duties under
this Agreement during such period.
(h) Excise Tax Gross-Up.
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(A) Except as provided in subsection (B), in the event it shall be determined
that any payment or distribution of any type, including accelerated vesting, to
or for the benefit of the Officer, by the Employer, any "affiliate" (as defined
in Rule 405 of the Securities Act of 1933, as amended) of the Employer, 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 Employer or ownership of a substantial portion of the
Employer'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 Agreement 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 Officer shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Officer 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 Officer retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(B) Notwithstanding subsection (A) or any other provision of
this Agreement to the contrary, in the event that the Payments (excluding the
payment provided for in subsection (A)) exceed by less than 10% or $100,000, the
maximum amount of Payments which if made or provided to the Officer would not be
subject to an Excise Tax, the Officer 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 Officer 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 Officer (on a pre-tax
basis) is less than the greater of $100,000 or 10% of the Payments. Unless the
Officer shall have given prior written notice specifying a different order to
the Employer to effectuate the foregoing, the Employer 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 Officer pursuant to the preceding sentence shall take
precedence over the provisions of any other plan, arrangement or agreement
governing the Officer's rights and entitlements to any benefits or compensation.
(C) The determination of whether the Payments shall be reduced
pursuant to this Agreement 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 Officer 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 Employer and the Officer by no later
than ten (10) days following the Termination Date, if applicable, or such
earlier time as is requested by the Employer or the Officer (if the Officer
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 Officer,
it shall furnish the Officer and the Employer with an opinion reasonably
acceptable to the Officer and the Employer that no Excise Tax is payable
(including the reasons therefor) and that the Officer 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 Officer no later than the due date for payment of
the Excise Tax. Any determination by the Accounting Firm shall be binding upon
the Employer and the Officer, 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 Employer should have been made ("Underpayment"), or
that Gross-Up Payments will have been made by the Employer 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 Officer as a result of such Underpayment)
shall be promptly paid by the Employer to or for the benefit of the Officer. In
the case of an Overpayment, the Officer shall, at the direction and expense of
the Employer, 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 Employer, and otherwise reasonably cooperate with
the Employer to correct such Overpayment, provided, however, that (i) the
Officer shall not in any event be obligated to return to the Employer 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 Officer 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 Officer repaying to the
Employer an amount which is less than the Overpayment. The cost of all such
determinations made pursuant to this Section shall be paid by the Employer.
6. Reimbursement of Business Expenses. During the term of this
Agreement, Employer shall reimburse Officer promptly for all expenditures
(including travel, entertainment, parking, business meetings, and the monthly
costs (including dues) of maintaining memberships at appropriate clubs) to the
extent that such expenditures meet the requirements of the Code for
deductibility by Employer for federal income tax purposes or are otherwise in
compliance with the rules and policies of Employer and are substantiated by
Officer as required by the Internal Revenue Service and rules and policies of
Employer.
7. Indemnity. To the extent permitted by applicable law, the
Certificate of Incorporation and the By-Laws of Employer (as from time to time
in effect) and any indemnity agreements entered into from time to time between
Employer and Officer, Employer shall indemnify Officer and hold him harmless for
any acts or decisions made by him in good faith while performing services for
Employer, and shall use reasonable efforts to obtain coverage for him under
liability insurance policies now in force or hereafter obtained during the term
of this Agreement covering the other officers or directors of Employer.
8. Miscellaneous.
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(a) Succession. This Agreement shall inure to the benefit of
and shall be binding upon Employer, its successors and assigns, but without the
prior written consent of Officer, this Agreement may not be assigned other than
in connection with a merger or sale of substantially all the assets of the
Employer or similar transaction. Employer shall not agree to any such
transaction unless the successor to or assignee of the Company's business and/or
assets in such transaction expressly assumes all obligations of the Employer
hereunder. The obligations and duties of Officer hereby shall be personal and
not assignable.
(b) Notices. Any notices provided for in this Agreement shall
be sent to Employer at 4500 Park Granada, Calabasas, California 91302,
Attention: General Counsel/Secretary, with a copy to the Chairman of the
Compensation Committee at the same address, or to such other address as Employer
may from time to time in writing designate, and to Officer at his home address
as reflected in Employer's records or at such other address as he may from time
to time in writing designate. All notices shall be deemed to have been given two
(2) business days after they have been deposited as certified mail, return
receipt requested, postage paid and properly addressed to the designated address
of the party to receive the notices.
(c) Effective Date. This Agreement is effective as of March 1, 1999.
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(d) Entire Agreement. This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and it replaces
and supersedes any prior agreements between the parties relating to said subject
matter. No modifications or amendments of this Agreement shall be valid unless
made in writing and signed by the parties hereto.
(e) Waiver. The waiver of the breach of any term or of any
condition of this Agreement shall not be deemed to constitute the waiver of any
other breach of the same or any other term or condition.
(f) California Law. This Agreement shall be construed and interpreted in
accordance with -------------- the laws of California.
(g) Attorneys' Fees in Action on Contract. If any litigation
shall occur between the Officer and Employer, which litigation arises out of or
as a result of this Agreement or the acts of the parties hereto pursuant to this
Agreement, or which seeks an interpretation of this Agreement, the prevailing
party in such litigation, in addition to any other judgment or award, shall be
entitled to receive such sums as the court hearing the matter shall find to be
reasonable as and for the attorneys' fees of the prevailing party.
(h) Confidentiality. Officer agrees that he will not divulge
or otherwise disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of Employer or any
of its subsidiaries which he may have learned as a result of his employment
during the term of this Agreement or prior thereto as an employee, officer or
director of or consultant to Employer or any of its subsidiaries, except to the
extent such use or disclosure is (i) necessary or appropriate to the performance
of this Agreement and in furtherance of Employer's best interests, (ii) required
by applicable law, (iii) lawfully obtainable from other sources, or (iv)
authorized by Employer. The provisions of this subsection shall survive the
expiration, suspension or termination, for any reason, of this Agreement.
(i) Remedies of Employer. Officer acknowledges that the
services he is obligated to render under the provisions of this Agreement are of
a special, unique, unusual, extraordinary and intellectual character, which
gives this Agreement peculiar value to Employer. The loss of these services
cannot be reasonably or adequately compensated in damages in an action at law
and it would be difficult (if not impossible) to replace these services. By
reason thereof, Officer agrees and consents that if he violates any of the
material provisions of this Agreement, Employer, in addition to any other rights
and remedies available under this Agreement or under applicable law, shall be
entitled during the remainder of the term to seek injunctive relief, from a
tribunal of competent jurisdiction, restraining Officer from committing or
continuing any violation of this Agreement, or from the performance of services
to any other business entity, or both.
(j) Severability. If any provision of this Agreement is held
invalid or unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect, and if any provision is held invalid or
unenforceable with respect to particular circumstances, it shall nevertheless
remain in full force and effect in all other circumstances.
(k) No Obligation to Mitigate. Officer shall not be required
to mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise and, except as provided in Section 5(a)(i)(2)
hereof, no payment hereunder shall be offset or reduced by the amount of any
compensation or benefits provided to Officer in any subsequent employment.
(l) Arbitration. The parties acknowledge that they have
previously entered into a Mutual Agreement to Arbitrate Claims (the "Arbitration
Agreement"). The parties hereby incorporate herein by reference the terms of the
Arbitration Agreement. Any dispute arising regarding this Agreement and/or any
other matter covered by the Arbitration Agreement shall be subject to binding
arbitration pursuant to the terms of the Arbitration Agreement, except as
expressly provided herein.
(m) Pooling Transactions. Notwithstanding anything contained in this Agreement
to the contrary, in
--------------------------------------
the event of a Change in Control of the Employer in a transaction which is
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 Employer 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
Employer, or a combination of the foregoing, and (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 Officer any provision in
this Agreement or other arrangement pursuant to which he receives compensation,
payments or benefits.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
COUNTRYWIDE CREDIT INDUSTRIES, INC.
ATTEST: By:
Secretary Title: -------------------------------------
OFFICER:
Stanford L. Kurland, in his individual capacity
APPENDIX A
To Stanford L. Kurland Employment Agreement
A "Change in Control" shall mean the occurrence during the
term of the Agreement, of any one of the following events:
(a) An acquisition (other than directly from Employer) of any common stock or
other "Voting Securities" (as hereinafter defined) of Employer by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), immediately
after which such Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty five percent (25%) or more
of the then outstanding shares of Employer's common stock or the combined voting
power of Employer's then outstanding Voting Securities; provided, however, in
determining whether a Change in Control has -------- ------- occurred, Voting
Securities which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition which would cause a
Change in Control. For purposes of this Agreement, (1) "Voting Securities" shall
mean Employer's outstanding voting securities entitled to vote generally in the
election of directors and (2) a "Non-Control Acquisition" shall mean an
acquisition by (i) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) Employer or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by Employer (for purposes of this definition,
a "Subsidiary"), (ii) Employer or any of its Subsidiaries, or (iii) any Person
in connection with a "Non-Control Transaction" (as hereinafter defined);
(b) The individuals who, as of the date of the Agreement are members of the
Board (the "Incumbent Board"), cease for any reason to constitute at least
two-thirds of the members of the Board; provided, however, that if the election,
or nomination for -------- ------- election by Employer's common stockholders,
of any new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board; provided further, however, that
no individual shall be considered a member of the -------- ------- -------
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization
involving Employer, unless such merger,
consolidation or reorganization is a
"Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger,
consolidation or reorganization of Employer
where:
(A) the stockholders of Employer, immediately before such merger, consolidation
or reorganization, own directly or indirectly immediately following such merger,
consolidation or reorganization, at least seventy percent (70%) of the combined
voting power of the outstanding voting securities of the corporation resulting
from such merger, consolidation or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization;
(B) the individuals who were members of the Incumbent Board immediately prior to
the execution of the agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members of the board of
directors of the Surviving Corporation, or in the event that, immediately
following the consummation of such transaction, a corporation beneficially owns,
directly or indirectly, a majority of the Voting Securities of the Surviving
Corporation, the board of directors of such corporation; and
(C) no Person other than (i) Employer, (ii) any Subsidiary, (iii) any employee
benefit plan (or any trust forming a part thereof) maintained by Employer, the
Surviving Corporation, or any Subsidiary, or (iv) any Person who, immediately
prior to such merger, consolidation or reorganization had Beneficial Ownership
of twenty five percent (25%) or more of the then outstanding Voting Securities
or common stock of Employer, has Beneficial Ownership of twenty five percent
(25%) or more of the combined voting power of the Surviving Corporation's then
outstanding Voting Securities or
its common stock;
(ii) A complete liquidation or dissolution of Employer; or
(iii) The sale or other disposition of all or substantially all of the assets of
Employer to any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then outstanding
common stock or Voting Securities as a result of the acquisition of common stock
or Voting Securities by Employer which, by reducing the number of shares of
common stock or Voting Securities then outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Persons; provided, however,
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of common stock or Voting Securities by Employer,
and after such share acquisition by Employer, the Subject Person becomes the
Beneficial Owner of any additional common stock or Voting Securities which
increases the percentage of the then outstanding common stock or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
<PAGE>
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APPENDIX B
The Annual Incentive Plan, approved by the Employer's stockholders at
the 1996 Annual Meeting of Stockholders, grants authority to the Compensation
Committee to determine Employee's incentive compensation award. The Incentive
Matrix, as amended, referred to in section 4.(b), was approved by the Board of
Directors on September 11, 2000.