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Employment Agreement - Countrywide Asset Management Corp. and Kathleen H. Rezzo

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                             EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") has been executed as of January 1,
1997 by and between Countrywide Asset Management Corporation ("Employer") and
Kathleen H. Rezzo ("Officer").


                                  WITNESSETH:


WHEREAS, Employer desires to obtain the benefit of continued services of Officer
and Officer desires to continue to render services to Employer and its
affiliates.

WHEREAS, Employer and Officer desire to set forth the terms and conditions of
Officer's employment with Employer and its affiliates 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
   and its affiliates, in accordance with the terms hereof, for a term beginning
   on the date first written above and ending on December 31, 2000, unless
   earlier terminated in accordance with the provisions hereof.

2. 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 Vice President of CWM
   Mortgage Holdings, Inc. ("Holdings") and as Executive Vice President of
   Independent National Mortgage Corporation ("Indy Mac") and Independent
   Lending Corporation and President and Chief Executive Officer of Construction
   Lending Corporation of America, Builder Division.  Employer agrees that
   Officer's duties hereunder shall be the usual and customary duties of such
   office and such further duties shall not be inconsistent with the provisions
   of applicable law.  Officer shall have such executive power and authority as
   shall reasonably be required to enable her to discharge her duties in the
   offices which she may hold.  All compensation paid to Officer by Employer or
   any of its affiliates shall be aggregated in determining whether Officer has
   received the benefits provided for herein, but without prejudice to the
   allocation of costs among the entities to which Officer renders services
   hereunder.  Employer and Officer hereby agree that the portion of Officer's
   services which are provided to Indy Mac are to be treated for federal income
   tax purposes as services provided by Officer as an employee of Indy Mac.
   Officer agrees that Employer and Indy Mac shall make a determination as to
   the portion of the total compensation payable to Officer hereunder which
   shall be allocated to and deemed paid by Indy Mac for purposes of section
   162(m) and related provisions of the Internal Revenue
<PAGE>
 
   Code.  If Employer requests Officer to relocate outside of Los Angeles County
   in connection with the relocation of Holdings' headquarters, Officer shall
   have the option of agreeing to such relocation and the terms of this contract
   shall continue in full force and effect.  If Officer declines to relocate,
   either Officer or Employer shall provide the other party with a Notice of
   Termination in accordance with Section 5(f) and the rights and obligations of
   both parties shall cease upon such termination and Paragraphs 5(d) and 9(k)
   will not be applicable.  If Employer requests Officer to relocate outside of
   Los Angeles County and the Holdings' headquarters are not also relocating,
   Officer shall have the option of agreeing to such relocation and the terms of
   this contract shall continue in full force and effect.  If Officer declines
   to relocate, Employer's request to relocate shall be deemed a termination
   other than for Cause pursuant to Section 5(d).

3. SCOPE OF THIS AGREEMENT AND OUTSIDE AFFILIATIONS.  During the term of this
   Agreement, Officer shall devote her full business time and energy, except as
   expressly provided below, to the business, affairs and interests of Employer
   and its affiliates, and matters related thereto, and shall use her best
   efforts and abilities to promote their respective interests.  Officer agrees
   that she will diligently endeavor to promote the business, affairs and
   interests of Employer and its affiliates 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 Holdings or of one or more
   (direct or indirect) subsidiaries or affiliates of Employer or Holdings as
   the Board may from time to time request, subject to appropriate authorization
   by the affiliate or subsidiary 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 her of her
   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 business then conducted by Employer or any
   of its affiliates.

   Officer may make and manage personal business investments of her 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 her duties
   hereunder.

4. COMPENSATION AND BENEFITS.

   a. BASE SALARY. Employer shall pay to Officer a base salary in respect of the
      fiscal year of Employer (a "Fiscal Year") ending December 31, 1997 at the
      annual rate of $180,000 (the "Annual Rate"). In respect of the Fiscal
      Years ending in 1998, 1999, and 2000, the Compensation Committee of the
      Board (the "Compensation Committee) may, based upon the recommendation of
      Michael W. Perry and the performance of Officer and Employer,

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<PAGE>
 
      increase the Annual Rate. While any such increase shall be at the
      discretion of the Compensation Committee, it is anticipated that, for any
      Fiscal Year, a good performance review would result in an increase in the
      Annual Rate of 5%, but could exceed such percentage if warranted.
      Officer's Annual Rate may not be reduced during the term of this
      Agreement. If Employer reduces Officer's Annual Rate during the term of
      this Agreement, then such reduction may be treated by Officer as a
      termination other than for Cause pursuant to Section 5(d) below.

  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 Annual
      Incentive Plan attached hereto as Appendix A. The incentive compensation
      award payable to Officer for any Fiscal Year shall be paid no later than
      thirty (30) days after completion of the applicable audited financial
      statements for such Fiscal Year. For the purpose of any allocation of
      Officer's incentive compensation pursuant to Section 2 above, it is
      understood that the calculation of earnings of Holdings includes Holdings'
      equity interest in the earnings of Indy Mac.

  c.  STOCK OPTIONS. Beginning with the 1997 Fiscal Year and in respect of each
      of the following Fiscal Years during the term of this Agreement, Employer
      may grant to Officer stock options 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 and
      the competitive practices then prevailing regarding the granting of stock
      options. Subject to the foregoing, it is anticipated that the number of
      shares in respect of each annual stock option grant shall be in accordance
      with the number of shares granted to senior executives of Indy Mac. 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.

      All stock options granted in accordance with this Section 4(c): (i) shall
      be granted pursuant to Employer's current stock option 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 current 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, (iv) shall become immediately and
      fully exercisable in the event that Officer's employment is terminated due
      to death or Disability or by Employer other than for Cause (as defined in
      Section 5(c)), and (v) shall be subject to such other reasonable and
      consistent terms and conditions as may be determined by the Compensation
      Committee and set forth in the agreement evidencing the award.

  d.  ADDITIONAL BENEFITS. Officer shall also be entitled to all rights and
      benefits for which she 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, or other plans or benefits, which Employer or its
      subsidiaries may provide for him, or provided she is eligible to
      participate therein, for

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<PAGE>
 
      senior officers generally or for employees generally, during the term of
      this Agreement (collectively, "Additional Benefits"). This Agreement shall
      not affect the provision of

                                       4
<PAGE>
 
      any other compensation, retirement or other benefit program or plan of
      Employer. 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
      substantially equivalent to 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) on behalf of Officer and her
      dependents and beneficiaries which were being provided to them immediately
      prior to Officer's Termination Date, but only to the extent that Officer
      is not entitled to comparable benefits from other employment.

  e.  DEFERRAL OF AMOUNTS PAYABLE HEREUNDER. In the event Officer should desire
      to defer receipt of any cash payments to which she would otherwise be
      entitled hereunder, she 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 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 December 31, 2000, 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 her under the terms of Employer's disability
      insurance or other disability benefit plans or employer's tax-qualified
      Defined Benefit Pension Pan, and any compensation she may receive pursuant
      to any other employment, and (ii) to provide during the Disability Payment
      period the benefits specified in the last sentence of Section 4(d) 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 her 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 her
      estate (the "Beneficiary"). Employer shall also (1) pay to such
      Beneficiary (x) an amount equal

                                       5
<PAGE>
 
      to the incentive compensation that would have been payable to Officer
      pursuant to Section 4(b) in respect of the Fiscal Year in which the
      Officer's death occurs multiplied by a fraction, the numerator of which is
      the number of days in such Fiscal Year through the date of Officer's death
      and the denominator of which is 365 and (y) any unpaid incentive
      compensation payable to Officer pursuant to Section 5(b) in respect of the
      Fiscal Year immediately preceding the Fiscal Year in which her death
      occurs and (2) provide during the twelve-month period following the date
      of Officer's death the benefits specified in the last sentence of Section
      4(d) hereof. If Officer's death occurs while she is receiving payments for
      Disability under Section 5(a) above, such payments shall cease and the
      Beneficiary shall be entitled to the payments and benefits under this
      Subsection 5(b), which shall continue for a period of twelve months
      thereafter at the full rate of base salary in effect immediately prior to
      the Disability. This Agreement in all other respects will terminate upon
      the death of Officer; provided, however, that (i) the termination of the
      Agreement shall not affect Officer's entitlement to all other benefits in
      which she has become vested or which are otherwise payable in respect of
      periods ending prior to its termination, and (ii) to the extent not
      otherwise vested, all outstanding stock options granted to Officer
      pursuant to Section 4(c) will vest upon her death.

  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 (ii) 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 affiliates or permanently prohibiting her from
      participation in the conduct of the affairs of Employer of any of its
      affiliates. 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 affiliates' affairs by any federal or
      state regulatory authority having jurisdiction in the matter, Employer's
      obligations under Sections 4(a), 4(b), 4(c), and 4(f) 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), 4(c), and 4(f) 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 she has
      become vested or which are otherwise payable in respect of periods ending
      prior to her termination of employment. Anything herein to the contrary

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<PAGE>
 
      notwithstanding, termination for Cause shall not include termination by
      reason of Officer's job performance or a job performance rating given to
      Officer for her job performance or the financial performance of Holdings
      or any affiliated company.

  d.  SEVERANCE. If during the term of this Agreement, Officer's employment
      shall be terminated by Employer other than for Cause, then Employer shall
      (1) pay Officer in a single payment as soon as practicable after the
      Termination Date, but in no event later than thirty (30) days thereafter,
      (A) an amount in cash equal to one year of Officer's base salary at the
      Annual Rate at the Termination Date and (B) an amount equal to the
      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 first anniversary of the Termination Date
      occurs on a date prior to the end of a Fiscal Year, Employer shall also
      pay Officer an amount equal to the product of (x) the Bonus Rate and (y) a
      fraction, the numerator of which is (I) the number of days elapsed since
      the end of the immediately preceding Fiscal Year through the end of the
      Severance Period and (II) the denominator of which is 365, and (2) until
      the first anniversary of the Termination Date, provide the benefits
      specified in the last sentence of Section 4(d) hereof. Employer shall also
      pay in a single payment as soon as practicable after the Termination Date,
      but in no event later than thirty (30) days thereafter, any unpaid
      incentive compensation 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.

  e.  RESIGNATION. If during the term of this Agreement, Officer shall resign
      voluntarily, all of her 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 she has become vested or
      which are otherwise payable in respect of periods ending prior to her
      termination of employment.

  f.  NOTICE OF TERMINATION. Any purported termination by Employer or by Officer
      shall be communicated by a written 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 her 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.

                                       7
<PAGE>
 
  g.  NOTICE OF NON-RENEWAL OF AGREEMENT. Employer shall provide Officer with a
      minimum of six (6) months' written notice ("Non-Renewal Notice") if
      Employer does not intend to renew the term of this Agreement. Following
      such notice, Officer shall be permitted to seek and gain employment
      elsewhere and such action shall be deemed to not be a violation of Section
      9(k). In the event that Employer provides Officer with a Non-Renewal
      Notice, Officer shall be entitled to all incentive compensation earned,
      but not paid, during her employment through the date of termination. If
      Employer does not provide the Non-Renewal Notice to Officer and Employer
      terminates Officer for any reason other than for Cause within six (6)
      months from the end of the term of this Agreement, Officer shall be
      entitled to severance payment pursuant to Section 5(d). If Employer does
      not provide the Non-Renewal Notice to officer and the parties cannot agree
      on terms of a new agreement, then upon January 1, 2001, this Agreement
      shall terminate and Officer shall not be subject to the restrictions set
      forth in Paragraph 9(k), however, Officer shall be entitled to all
      incentive compensation earned, but not paid, during her employment through
      the date of termination.

6. REIMBURSEMENT OF BUSINESS EXPENSES.  During the term of this Agreement,
   Employer shall reimburse Officer promptly for all business expenditures 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. ARBITRATION.  With the exception of disputes arising under or with respect to
   Sections 9(h) or 9(k) hereof, any and all disputes arising out of or relating
   to this Agreement, between Employer and Officer, shall be resolved by
   arbitration.  Any party hereto electing to commence an action shall give
   written notice to the other parties hereto of such election.  The dispute
   shall be settled by arbitration in accordance with the then current rules of
   the California Employment Dispute Resolution Association; provided, however,
   in the event the parties are unable to agree on an arbitrator within twenty
   (20) days after receipt of the aforementioned notice of arbitration, a single
   arbitrator shall be selected by the Chief Judge of the Superior Court of the
   State of California for the County of Los Angeles.  The award of such
   arbitrator may be confirmed or enforced in any court of competent
   jurisdiction.  The costs and expenses of the arbitrator, including the
   reasonable attorneys' fees and costs of each of the parties, shall be
   apportioned between the parties by such arbitrator, based upon such
   arbitrator's determination of the merits of their respective positions.  Any
   party to the arbitration may demand production of documents from any other
   party, to be produced no fewer than thirty (30) days prior to the first date
   set for arbitration.  Any party may notice up to two (2) depositions for
   discovery purposes in preparation for arbitration.  Other than as expressly
   stated, no discovery shall be permitted except in accordance with California
   law.  The Federal Arbitration Act shall govern the interpretation and
   application of this arbitration clause.

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<PAGE>
 
8. 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 her harmless for any
   acts or decisions made by her in good faith while performing services for
   Employer, and shall use reasonable efforts to obtain coverage for her under
   liability insurance policies now in force or hereafter obtained during the
   term of this Agreement covering the other officers or directors of Employer.

9. MISCELLANEOUS.

   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
       Employer or similar transaction. Notwithstanding the foregoing, Employer
       may assign, whether by assignment agreement, merger, operation of law or
       otherwise, this Agreement to Holdings or Indy Mac, or to any successor of
       either of them, subject to such assignee's express assumption of all
       obligations of Employer hereunder, and Officer hereby consents to any
       such assignment. The failure of any successor to or assignee of the
       Employer's business and/or assets in such transaction to expressly assume
       all obligations of Employer hereunder shall be deemed a material breach
       of this Agreement by Employer. 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 its corporate headquarters, 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 such address as
       she may from time to time in writing designate (or her business address
       of record in the absence of such designation). 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.  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.

   d.  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.

   e.  CALIFORNIA LAW. This Agreement shall be construed and interpreted in
       accordance with the laws of California.

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<PAGE>
 
   f.  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.

   g.  CONFIDENTIALITY. Officer agrees that she 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 she may have learned as a result of her 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
       or in response to a lawful inquiry from a governmental or regulatory
       authority, (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.

   h.  REMEDIES OF EMPLOYER. Officer acknowledges that the services she 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
       she 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.

   i.  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.

   j.  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.

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<PAGE>
 
  k.  COVENANT NOT TO COMPETE

      (i) IN GENERAL. Officer agrees that while she is employed by Employer
          during the term of this Agreement and for a period of one year after
          the termination of such employment for whatever reason other than any
          termination by Employer, either for Cause or other than for Cause (the
          "Non-Compete Period"), she shall not, within North America:

          (A) engage in any business, whether as an employee, consultant,
              partner, principal, agent, representative or stockholder (other
              than as a stockholder of less than a one percent (1%) equity
              interest) or in any other corporate or representative capacity
              with any other business whether in corporate, proprietorship, or
              partnership form or otherwise, where such business is engaged in
              any activity which competes with the business of Employer (or its
              subsidiaries or affiliates) as conducted on the date Officer's
              employment terminated or which will compete with any proposed
              business activity of Employer (or its subsidiaries or affiliates)
              in the planning stage on such date;

          (B) solicit business from, or perform services for, any company or
              other business entity which at any time during the two-year period
              immediately preceding Officer's termination of employment with
              Employer was a client of Employer (or its subsidiaries or
              affiliates) (including without limitation any lessee, vendor or
              supplier); or

          (C) offer, or cause to be offered, employment, either on a full-time,
              part-time or consulting basis, to any person who was employed by
              Employer (or its subsidiaries or affiliates) on the date Officer's
              employment terminated, unless Officer shall have received the
              prior written consent of Employer.

     (ii) CONSIDERATION. The consideration for the foregoing covenant not to
          compete, the sufficiency of which is hereby acknowledged, is
          Employer's agreement to continue to employ Officer and provide
          compensation and benefits pursuant to this Agreement, including but
          not limited to Section 5(d).

    (iii) EQUITABLE RELIEF AND OTHER REMEDIES. Officer acknowledges and agrees
          that Employer's remedies at law for a breach or threatened breach of
          any of the provisions of this Section would be inadequate and, in
          recognition of this fact, Officer agrees that, in the event of such a
          breach or threatened breach, in addition to any remedies at law,
          Employer, without posting any bond, shall be entitled to obtain
          equitable relief in the form of specific performance, a temporary
          restraining order, a temporary or permanent injunction or any other
          equitable remedy which may then be available.

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<PAGE>
 
     (iv) REFORMATION. If the foregoing covenant not to compete would otherwise
          be determined invalid or unenforceable by a court of competent
          jurisdiction, such court shall exercise its discretion in reforming
          the provisions of this Section to the end that Officer be subject to a
          covenant not to compete, reasonable under the circumstances,
          enforceable by Employer.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
  first above written.

                                    EMPLOYER



                                    By:___________________________
                                    Name:_________________________
                                    Title:________________________


                                    Officer:



                                    ______________________________
                                    in her individual capacity

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<PAGE>
 
                                  APPENDIX A

                             ANNUAL INCENTIVE PLAN


 .  Production/Profitability Bonus:

Year                 Maximum Amount         Minimum Amount
1997                 $250,000               $0
1998                 $325,000               $0
1999                 $400,000               $0
2000                 $475,000               $0

     2.00% of annual net income of Construction Lending Corporation of America -
     - Builder Division, as determined by the Chief Financial Officer and
     President of CWM Mortgage Holdings, Inc. in their sole discretion.
 
 
 .  Discretionary Bonus:
 
      *Maximum Amount:  30% of Base Salary   Minimum Amount:  $0

      *Criteria:

                             (DISCRETIONARY BONUS)

1. POTENTIAL DISCRETIONARY BONUS AMOUNT:  From $0 up to 30% of base salary,
   ------------------------------------                                    
   based on your manager's evaluation of your performance.

2. BONUS DISCOUNT FACTOR FOR COMPANY EARNINGS:
   ------------------------------------------ 
 
 
1997 EARNINGS PER SHARE (FULLY DILUTED)
FOR CWM MORTGAGE HOLDINGS, INC.                             DISCRETIONARY BONUS AMOUNT
-------------------------------                             --------------------------
                                                         
  less than $1.31                                                       0%
  $1.31 to $1.60                                                       50%
  $1.61 to $1.73                                                       75%
  greater than $1.74                                                  100%


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<PAGE>
 
                           Discretionary Bonus con't

  Earnings per share for CWM Mortgage Holdings, Inc. shall be determined on the
  basis of the annual audit conducted by CWM's independent accountants.
  earnings' goals for 1998, 1999 and 2000 shall be set in accordance with CWM'S
  goals established immediately prior to such year.

  If earnings per share for CWM Mortgage Holdings, Inc. fall between any two
  threshold amounts set forth above, the Bonus Discount Factor shall not be
  interpolated by the corresponding percentage.


3.  Actual Discretionary Bonus Amount.
    --------------------------------- 

  The Actual Discretionary Bonus Amount shall be calculated by multiplying (x)
  the Potential discretionary Bonus Amount in Part 1 above (from $0 up to 30% of
  base salary) times (y) the Bonus Discount Factor determined pursuant to Part 2
               -----                                                            
  above.

  Example:  $27,000 (Potential Discretionary Bonus Amount) x 50% ($1.50 per
  -------   share earnings for 1997) = $13,500 (Actual Discretionary Bonus
            Amount).

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