Severance Agreement - Countrywide Credit Industries Inc. and David S. Loeb
February 28, 2000
Mr. David S. Loeb
[Address]
Dear Dave,
Set forth in this letter are certain agreements between you and Countrywide:
1. As set forth in Angelo's November 22, 1999 memo and confirmed in my
January 18, 2000 letter to you, the term of the Third Restated
Employment Agreement between you and Countrywide Credit Industries,
Inc. (the "3-1-99 Agreement") will expire as of February 28, 2000 and
not be renewed by the Board. As we previously discussed, your last day
of full-time employment will be February 28, 2000 in order for your
entire compensation amount for FY2000 to be deductible under existing
tax rules. As we discussed, however, you will be paid through February
29, 2000. Pursuant to the 3-1-99 Agreement, you have been granted
85,000 options effective today, February 28, 2000. Attached is the
Stock Option Agreement granting these 85,000 shares. These options will
first be exercisable in three increments of 28,333, 28,333 and 28,334,
respectively, on the first three anniversaries of the date of grant.
The options will expire if they remain unexercised at the expiration of
five years from the date of grant. You will receive an incentive
compensation award for fiscal year 2000 in an amount equal to 25% of
the amount of the incentive compensation award payable to Angelo Mozilo
for fiscal year 2000. In addition, in recognition of your service to
Countrywide as Chairman for almost thirty years, you will receive an
additional $500,000 as part of your incentive compensation award. This
award will be paid some time during April or May 2000 in accordance
with prior company practice. You will also continue to receive the
benefits under the terms of Countrywide's pension, SERP and split
dollar life insurance programs in which you currently participate,
provided that upon the cessation of your full-time employment, the
death benefit payable to your trust under your insurance policy will be
reduced from $5.2 million to $2.6 million. Countrywide will continue to
pay premiums in the amounts required such that the life insurance
policy will have a cash value sufficient to allow the insurance to
remain in force up to age 95 and provide a death benefit sufficient to
return to Countrywide the premiums paid by it and also to pay to your
trust an amount no less than $2.6 million. The documents for the split
dollar life insurance program will be amended to our mutual reasonable
satisfaction to achieve this result.
2. As a part-time employee, options will continue to vest as described in
each relevant option agreement and shall expire pursuant to their terms
or as described in the Part Time Employment Agreement dated February
28, 2000, provided that you may not sell or transfer for consideration
in any ninety day period, without the prior written consent of the
Board of Directors, more than 500,000 of the Countrywide option shares
listed or described on Exhibit A attached hereto, provided, however,
the foregoing limitation will not apply to any sales of such shares
solely for purposes of paying taxes incurred by you upon exercise, but
not the sale, of any such options. However, as a part-time employee,
you will not be eligible for any future option grant Countrywide will
maintain the registration of all your options on SEC Form S-8 until the
earlier of their exercise or expiration.
3. Countrywide will transfer to you ownership of those computers
currently being provided to you by Countrywide. IndyMac will pay for
any continuing subscriptions for software or services in connection
with the computers. All Countrywide-related software (e.g. lotus
notes) will be replaced by comparable IndyMac-related software.
4. Effective February 28, 2000, you will resign as a member of the Board
of Directors of Countrywide Credit Industries, Inc. as well as from the
boards of all Countrywide subsidiary companies. In light of the fact
that Countrywide's Director Emeritus program applies only to
non-employee directors retiring from the Board and in light of the
"non-compete" condition to becoming a Director Emeritus, you would not
become a Director Emeritus of Countrywide upon your resignation from
the Board. Also, in light of your resignation from the Board, you would
not receive the honorary title of Chairman Emeritus of Countrywide. It
is understood that you will continue as a director, officer and
employee of IndyMac. The Investor Relations Department of both
Countrywide and IndyMac will collaborate on a press release announcing,
among other things, your retirement from Countrywide, a copy of which
will be given to you for your review and comment prior to issuance.
After February 28, 2000, Countrywide will not treat you as an
"affiliate" of Countrywide for purposes of the Securities Act of 1933.
5. You would no longer require the use of an office and secretarial
services at the Countrywide Calabasas facility. Also, we are currently
holding a large number of your stock certificates in the safe in
Countrywide's Treasury Department. Please provide us with instructions
as to what to do with these certificates.
6. As part of your employment arrangement with IndyMac, it is anticipated
IndyMac would provide you and Heidi with medical coverage and benefits.
In the event that IndyMac fails or refuses to provide medical coverage
for you and Heidi through the rest of your life comparable to the
medical coverage and benefits that Countrywide provides to its
executive management, Countrywide will provide medical coverage for you
and Heidi through the rest of your life, comparable to the medical
coverage and benefits that Countrywide provides to its executive
management. "Medical Coverage and benefits" includes all medical,
dental, vision and other health coverages.
7. I have enclosed with this letter a letter of resignation, effective
February 28, 2000, by which you will resign as an officer and member of
the Board of Directors of Countrywide Credit Industries, Inc. and all
Countrywide subsidiary companies. Please execute the letter where
indicated and arrange to return it to me.
8. Except as expressly set forth above, this letter replaces and
supersedes the memo from Angelo Mozilo dated November 22, 1999 and the
letter from me to you dated January 18, 2000.
9. This letter constitutes a binding obligation of Countrywide and has
been duly authorized by all Compensation Committee, Board of Directors
and any other requisite corporate approvals.
10. The provisions of the 3-1-99 Agreement as they relate to the period
subsequent to the termination of your employment under the 3-1-99
Agreement will remain in effect as modified by this letter agreement.
In this connection, solely for purposes of eliminating any doubt,
Countrywide acknowledges that its obligations to indemnify you under
your employment agreement and any other written indemnification
agreement between you and Countrywide continue and shall survive the
termination of your status as a director, officer and employee.
I hope that the items set forth in this letter accurately reflect your
understanding of these arrangements. If so, please sign where indicated below
and arrange to return a copy of this letter as well as the executed Stock Option
Agreement covering the new grant of 85,000 options, and the Resignation Letter
to me. As always, should you have any questions or comments concerning any of
the above, please have Mr. Bonn contact me.
Sincerely,
Countrywide Credit Industries, Inc.
By:_/s/_______________________
---
Sandor E. Samuels
Accepted and agreed this 28th day of February, 2000
__/s/________________________
---
David S. Loeb
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Exhibit A
David S. Loeb
Option Agreements
------------------------------------- ----------------------------------- -----------------------------------
Grant Date Expiration Date Number of
Option Shares
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
03/24/1992 03/24/2002 2,675
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
03/24/1992 03/24/2002 109,948
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
04/07/1993 04/07/2003 283,806
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
06/01/1995 06/01/2005 18,890
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
06/01/1995 06/01/2005 100,607
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
06/01/1995 06/01/2005 59,749
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
06/03/1996* 06/03/2006 358,089
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
06/03/1996* 06/03/2006 6,004
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
07/11/1996 07/11/2006 1,000,000
------------------------------------- ----------------------------------- -----------------------------------
Total Number of Option Shares: 1,939,768
As of February 28, 2000
* CONTAINS OPTIONS WHICH HAVE NOT VESTED AS OF FEBRUARY 28, 2000