UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
INDYMAC MORTGAGE HOLDINGS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
[LOGO APPEARS HERE]
April 7, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
IndyMac Mortgage Holdings, Inc. ("IndyMac"). The meeting will be held on May
23, 2000 at 10:00 a.m. at the Pasadena Hilton Hotel, 150 South Los Robles
Avenue, Pasadena, California. The formal notice and proxy statement for this
meeting are attached to this letter.
We hope you attend the Annual Meeting. Even if you currently plan to attend
the meeting, however, it is important that you sign, date and return your
enclosed proxy, or submit your voting instructions electronically or via
telephone in the manner described on the proxy card, as soon as possible. You
may still attend the Annual Meeting and vote in person if you desire, but
returning your proxy card now, or submitting your voting instructions
electronically or via telephone, will assure that your vote is counted if your
plans change and you are unable to attend.
Your vote, regardless of the number of shares you own, is important. We urge
you to indicate your approval by voting FOR the matters indicated in the
notice.
On behalf of the Board of Directors, I thank you for your assistance.
Sincerely,
/s/ David S. Loeb
David S. Loeb
Chairman of the Board
INDYMAC MORTGAGE HOLDINGS, INC.
155 North Lake Avenue
Pasadena, California 91101
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 23, 2000
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To the Stockholders of INDYMAC MORTGAGE HOLDINGS, INC.:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of IndyMac Mortgage Holdings, Inc. ("IndyMac") will be held at the
Pasadena Hilton Hotel, 150 South Los Robles Avenue, Pasadena, California on May
23, 2000 at 10:00 a.m., local time, for the following purposes:
1. To elect the Board of Directors for the ensuing year;
2. To approve the IndyMac Mortgage Holdings, Inc. 2000 Stock Incentive
Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Each of the proposals referred to above is more fully described in the
accompanying Proxy Statement, which forms a part of this Notice.
The Board of Directors has fixed the close of business on March 27, 2000 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment or postponement thereof. Only
stockholders of record at the close of business on that date will be entitled
to notice of and to vote at the Annual Meeting or any adjournments or
postponements thereof. A list of those stockholders will be available for
inspection at the offices of IndyMac at 155 North Lake Avenue, Pasadena,
California 91101 at least ten days before the Annual Meeting.
If you plan to attend the Annual Meeting, please notify the undersigned so
that identification can be prepared for you. Whether or not you plan to attend
the Annual Meeting, please sign, date and return the enclosed proxy card, or
submit your voting instructions electronically or via telephone in the manner
described on the enclosed proxy card. If you choose to return the enclosed
proxy card via United States mail, a return envelope is enclosed for this
purpose and requires no postage for mailing in the United States. If you are
present at the Annual Meeting you may, if you wish, withdraw your proxy and
vote in person. Thank you for your interest and consideration of the proposals
listed above.
By Order of the Board of Directors
/s/ Richard L. Sommers
Richard L. Sommers
Executive Vice President, General
Counsel and Secretary
April 7, 2000
EACH VOTE IS IMPORTANT. TO VOTE YOUR SHARES, PLEASE SIGN, DATE AND COMPLETE THE
ENCLOSED PROXY CARD AND MAIL IT IN THE ENCLOSED RETURN ENVELOPE, OR SUBMIT YOUR
VOTING INSTRUCTIONS ELECTRONICALLY OR VIA TELEPHONE IN THE MANNER DESCRIBED ON
THE ENCLOSED PROXY CARD.
INDYMAC MORTGAGE HOLDINGS, INC.
155 North Lake Avenue
Pasadena, California 91101
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 23, 2000
This Proxy Statement is furnished to stockholders of IndyMac Mortgage
Holdings, Inc. ("IndyMac") in connection with the solicitation by the Board of
Directors of IndyMac of proxies to be voted at the 2000 Annual Meeting of
Stockholders (the "Annual Meeting") to be held at the Pasadena Hilton Hotel,
150 South Los Robles Avenue, Pasadena, California on May 23, 2000, at 10:00
a.m. or at any adjournment or postponement thereof. IndyMac expects to mail
the proxy solicitation materials for the Annual Meeting on or about April 7,
2000.
The principal solicitation of proxies for the Annual Meeting is being made
by mail. Officers, directors and employees of IndyMac, none of whom will
receive additional compensation therefor, may also solicit proxies by
telephone or other personal or electronic contact. IndyMac has retained Morrow
& Co., Inc. to assist in the solicitation of proxies for an estimated fee of
$9,000 plus reimbursement of expenses. IndyMac will bear the cost of the
solicitation of proxies, including postage, printing and handling, and will
reimburse brokerage firms and other record holders of shares beneficially
owned by others for their reasonable expenses incurred in forwarding
solicitation material to beneficial owners of shares.
A stockholder may revoke his or her proxy at any time before it is voted by
delivering a later dated, signed proxy or other written notice of revocation
to IndyMac. Any stockholder present at the Annual Meeting may also withdraw
his or her proxy and vote in person on each matter brought before the Annual
Meeting. All shares represented by properly signed and returned proxies in the
accompanying form, unless revoked, will be voted in accordance with the
instructions thereon. If no instructions are given, the shares will be voted
in favor of the election of the director nominees and the other proposal
described herein.
Only holders of shares of IndyMac's Common Stock, par value $0.01 per share
(the "Common Stock") of record at the close of business on the March 27, 2000
record date for the Annual Meeting will be entitled to notice of and to vote
at the Annual Meeting or at any postponement or adjournment thereof. On the
record date, 73,406,449 shares of Common Stock were outstanding. Stockholders
will each be entitled to one vote per share of Common Stock held by them.
Votes cast in person or by proxy at the Annual Meeting will be tabulated by
the inspector of elections appointed for the meeting. Pursuant to IndyMac's
Bylaws and the Delaware General Corporation Law (the "DGCL"), the presence of
the holders of shares representing a majority of the outstanding shares of
Common Stock entitled to vote, whether in person or by proxy, is necessary to
constitute a quorum for the transaction of business at the Annual Meeting.
Under the DGCL, abstentions and "broker non-votes" (that is, proxies from
brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote with
respect to a matter on which the brokers or nominees do not have the
discretionary power to vote) will be treated as present for purposes of
determining the presence of a quorum. For purposes of determining approval of
a matter presented at the Annual Meeting, abstentions will be deemed present
and entitled to vote and will, therefore, have the same legal effect as a vote
"against" a matter presented at the meeting. With respect to any proposal
requiring the affirmative vote of a majority of the shares of Common Stock
present or represented by proxy and entitled to vote on the proposal at the
Annual Meeting, a broker non-vote will be deemed "not entitled to vote" on the
proposal for which the non-vote is indicated and will, therefore, have no
legal effect on the vote on that proposal. Election of the nominees named in
this proxy statement as directors of IndyMac (Proposal One) will require that
they receive a majority of the votes cast on the matter. Approval of the
IndyMac Mortgage Holdings, Inc. 2000 Stock Incentive Plan (Proposal Two) will
require the affirmative vote of a majority of the shares present at the
meeting and entitled to vote on the matter, provided that the total votes cast
on the proposal constitute the vote of at least a majority of the shares
entitled to
1
vote on the proposal. Accordingly, broker non-votes will have no legal effect
with respect to Proposals One and Two described herein.
RECEIVE YOUR ANNUAL REPORT AND
PROXY STATEMENT ON-LINE NEXT YEAR
Most stockholders can elect to view future IndyMac proxy statements and
annual reports over the Internet instead of receiving paper copies in the
mail. Those stockholders will be given the opportunity to consent to future
Internet delivery when they vote their proxy this year. (For some stockholders
this option is only available if you vote electronically by the Internet).
If you are not given an opportunity to consent to Internet delivery when you
vote your proxy, contact the bank, broker or other holder of record through
which you hold your shares and inquire about the availability of such an
option for you.
If you consent, your account will be so noted and, when IndyMac's 2000
Annual Report and the Proxy Statement for the 2001 Annual Meeting of
Stockholders become available, you will be notified on how to access them on
the Internet.
If you do elect to receive your IndyMac materials via the Internet, you can
still request paper copies by contacting Investor Relations at IndyMac
Mortgage Holdings, Inc., 155 N. Lake Avenue, P.O. Box 7137, Pasadena,
California 91109-7137.
2
PRINCIPAL STOCKHOLDERS
The following table shows, with respect to each person or entity known by
IndyMac to be the beneficial owner of more than 5% of IndyMac's outstanding
Common Stock as of February 29, 2000, (i) the number of shares of IndyMac
Common Stock so owned, and (ii) the percentage of all shares outstanding
represented by such ownership (based upon the number of shares outstanding as
of that date).
Name and Address of
Beneficial Owner Number of Shares Percent of Class
------------------- ---------------- ----------------
Capital Group International, Inc. (1)........ 7,543,500 10.12%
Capital Guardian Trust Company
11100 Santa Monica Boulevard
Los Angeles, California 90025
Citigroup Inc. (2)........................... 4,490,577 6.02%
153 East 53rd Street
New York, New York 10043
Salomon Smith Barney Holdings, Inc.
SSB Citi Fund Management LLC
388 Greenwich Street
New York, New York 10013
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(1) Based upon Amendment No. 2 to Schedule 13G filed February 11, 2000 with
the Securities and Exchange Commission. Capital Guardian Trust Company
("Capital Guardian") is a wholly-owned subsidiary of Capital Group
International, Inc. ("Capital Group") and the 6,619,600 shares
beneficially owned by Capital Guardian are included in those shown as
beneficially owned by Capital Group. Capital Group reports that it has no
voting and no dispositive power with respect to any of the shares shown
and that dispositive, and in some cases voting, power with respect to such
shares is held by investment management company subsidiaries of Capital
Group on behalf of their respective clients. Capital Guardian is a bank
that is deemed the beneficial owner of 6,619,600 shares as a result of its
service as investment manager of various institutional accounts. It
reports that it has sole investment and sole voting power with respect to
all shares beneficially owned by it.
(2) Based upon Amendment No. 1 to Schedule 13G filed February 14, 2000 with
the Securities and Exchange Commission. Salomon Smith Barney Holdings Inc.
("Salomon") is a wholly-owned subsidiary of Citigroup Inc., and SSB Citi
Fund Management LLC ("SSB") is a wholly-owned subsidiary of Salomon.
Salomon and SSB report that each has shared dispositive and shared voting
power with respect to 4,344,407 and 4,431,722 shares, respectively.
PROPOSAL ONE
ELECTION OF DIRECTORS
IndyMac has six directors. The six current directors are nominees for
election as directors to serve until the next annual meeting after their
election and until their successors are elected and have qualified. In the
absence of contrary instructions, it is the intention of the persons named in
the accompanying proxy to vote for the nominees listed below. If any nominee
becomes unavailable to serve for any reason, an event the Board of Directors
does not anticipate, the proxies solicited hereby will be voted for election
of the person, if any, designated by the Board of Directors to replace that
nominee.
3
Director Nominees
The following persons have been nominated to serve as directors of IndyMac
for the ensuing year:
David S. Loeb, age 76, has been Chairman of the Board of Directors of
IndyMac since its formation in 1985. From 1985 to January 1997, Mr. Loeb
served as Chief Executive Officer of IndyMac. He is also co-founder of
Countrywide Credit Industries, Inc. ("CCI"), an affiliate of IndyMac, and was
President of CCI from its formation in March 1969 to February 2000. Mr. Loeb
also served as Chairman of CCI from its formation to March 1999. Mr. Loeb
served as a director of both CCI and Countrywide Home Loans, Inc. ("CHL"), a
subsidiary of CCI that has engaged in certain transactions with IndyMac, until
February 2000.
Michael W. Perry, age 37, is Chief Executive Officer and Vice Chairman of
the Board of Directors of IndyMac. He became a director of IndyMac in October
1997. From January 1997 to February 1999, Mr. Perry served as President of
IndyMac, and from January 1993 to January 1997, he served as IndyMac's
Executive Vice President and Chief Operating Officer. Mr. Perry has been with
IndyMac since January 1993 and has direct responsibility for the management of
IndyMac and its subsidiaries. From May 1987 to December 1992, he served as
Senior Executive Vice President in charge of the Mortgage Banking Division of
Commerce Security Bank and as Chief Financial Officer of Commerce Security
Bank. He has 15 years of business experience with financial institutions, real
estate firms and mortgage banking companies, including four years as a
certified public accountant with KPMG Peat Marwick LLP.
Lyle E. Gramley, age 73, became a director of IndyMac in January 1993. He is
a former member of the Board of Governors of the Federal Reserve System. Since
September 1985, he has been employed by the Mortgage Bankers Association of
America as its chief economist and, more recently, as a consulting economist.
During that period he has also been self-employed as an economic consultant.
He serves on the Board of Trustees of the following mutual funds distributed
by Dreyfus Service Corporation: Cash Management, Cash Management Plus, Inc.,
Government Cash Management, Treasury Cash Management, Treasury Prime Cash
Management, Tax Exempt Cash Management, Municipal Cash Management Plus and New
York Municipal Cash Management. He also serves on the Board of Directors and
the Compensation Committee of the Board of Directors of NuWave Technologies,
Inc., a company specializing in video imaging.
Thomas J. Kearns, age 61, has been a director of IndyMac since June 1990. He
was a consultant for Josephthal Lyon & Ross, Inc. from April 1995 to September
1998. He has 30 years of experience in the securities business, including
approximately 16 years with Merrill Lynch Capital Markets as a First Vice
President. He was also a Managing Director of Commonwealth Associates from
April 1994 to February 1995.
Frederick J. Napolitano, age 70, has been a director of IndyMac since its
formation in 1985 and has been Chairman of the Board of Pembroke Enterprises,
Inc., a real estate development company located in Virginia, since 1973. He
was a director of Home Mortgage Access Corporation, serves on the Board of
Directors and the Executive Committee of the National Association of Home
Builders and was President of the National Association of Home Builders in
1982. He served on the Federal Home Loan Bank Board Advisory Council from 1983
to 1985, the Federal Home Loan Mortgage Corporation Advisory Committee from
1981 to 1983 and the Federal National Mortgage Association Advisory Board from
1984 to 1985. Mr. Napolitano was Chairman of the Hampton Roads Chamber of
Commerce in 1989, and was a member of the Industrial Development Services
Advisory Board for the Commonwealth of Virginia.
Patrick C. Haden, age 47, became a director of IndyMac in March 2000. He has
been a general partner of Riordan, Lewis & Haden, an equity investment firm,
since 1987. Mr. Haden serves on the Board of Directors of Tetra Tech, Inc.,
CORDA Medical Care, Inc., Elkay Plastics Co., Inc., and Financial Pacific
Insurance Group, Inc. Mr. Haden graduated Magna Cum Laude, Phi Beta Kappa from
University of Southern California and was awarded a Rhodes Scholarship to
study Economics at Oxford University in England. Mr. Haden received his J.D.
from Loyola Law School in 1982.
4
Vote Required; Board Recommendation
A majority of the votes cast at the Annual Meeting, provided that a quorum
is present, will be required to elect directors.
The Board of Directors recommends that stockholders vote FOR each of the
nominees. Proxies solicited by the Board of Directors will be so voted unless
the stockholder specifies otherwise.
Board Meetings and Attendance
The Board of Directors held seven meetings, in person or by telephone,
during 1999.
The Audit Committee of the Board of Directors consults with and reviews
reports and recommendations of IndyMac's independent certified public
accountants and reports thereon to the Board. The Audit Committee held five
meetings in 1999. This committee consists of Messrs. Gramley, Kearns and
Napolitano, all of whom are outside directors of IndyMac. The chairman of the
committee is Mr. Kearns.
The Compensation Committee of the Board of Directors administers IndyMac's
Stock Incentive Plan as well as IndyMac's Deferred Compensation Plan and
Amended and Restated Loan Plan, and approves the compensation of IndyMac's
executive officers. The Compensation Committee held eight meetings in 1999.
This committee consists of Messrs. Gramley, Kearns and Napolitano, all of whom
are outside directors of IndyMac. The chairman of the committee is Mr.
Napolitano.
The Board of Directors does not have a nominating committee.
Director Compensation
During 1999, each director who was not an employee of IndyMac (other than
Patrick C. Haden, who became a director in March 2000) received an annual
retainer fee of $41,833 and was reimbursed for expenses related to attending
meetings. On March 5, 1999, each outside director received a grant of stock
options covering 20,000 shares of IndyMac Common Stock, with an exercise price
of $10.4375 per share. These options became exercisable one year after the
grant date. Directors of IndyMac are eligible to participate in IndyMac's
Deferred Compensation Plan, which allows directors to defer all or a portion
of their annual retainer, subject to an annual minimum amount of $2,000, for a
number of years designated by each participating director, subject to a
minimum deferral of five years.
IndyMac has a Director Emeritus program under which a retiring director who
has attained at least the age of 65, has served as director of IndyMac for at
least five years and is in good standing may agree to provide consulting and
advisory services to IndyMac in exchange for a percentage of the annual
retainer paid to the director during the preceding twelve months, depending on
the director's length of service prior to becoming a Director Emeritus. The
program also requires that a Director Emeritus refrain from competing with
IndyMac and becoming affiliated with any competitor of IndyMac. There are no
current participants in the Director Emeritus program.
5
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information concerning the beneficial
ownership of IndyMac Common Stock by each director nominee, IndyMac's Chief
Executive Officer, each of IndyMac's other four most highly compensated
executive officers, and all executive officers and directors as a group, as of
February 29, 2000. Except as otherwise indicated, all persons listed below
have (i) sole voting power and dispositive power with respect to their shares,
except to the extent that authority is shared by spouses under applicable law,
and (ii) record and beneficial ownership with respect to their shares. The
shares and percentages set forth below include shares of IndyMac Common Stock
that were outstanding or issuable within 60 days upon the exercise of options
outstanding as of February 29, 2000.
Shares of Common
Stock Owned Percent
Name Beneficially(1) of Class
---- ---------------- --------
David S. Loeb....................................... 529,201 *
Michael W. Perry.................................... 552,797(2) *
Lyle E. Gramley..................................... 211,415(3) *
Thomas J. Kearns.................................... 182,240(4) *
Frederick J. Napolitano............................. 218,665(5) *
Patrick C. Haden.................................... -- (6) *
Angelo R. Mozilo.................................... 683,638(7) *
Richard H. Wohl..................................... 106,373(8) *
S. Blair Abernathy.................................. 64,589(9) *
All directors and executive officers as a group (10
persons)........................................... 2,618,862 3.5%
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* Less than one percent of class.
(1) Includes shares that may be purchased through stock options exercisable
within 60 days of February 29, 2000 held by the following persons: Mr.
Loeb, 401,699 shares; Mr. Perry, 472,333 shares; Mr. Gramley, 89,881
shares; Mr. Kearns, 122,490 shares; Mr. Napolitano, 89,881 shares; Mr.
Mozilo, 536,905 shares; Mr. Wohl, 84,167 shares; Mr. Abernathy, 48,007
shares; all directors and executive officers as a group, 1,898,530 shares.
(2) Includes 847 shares held in Mr. Perry's 401(k) account.
(3) Includes 13,225 shares owned by Marlys Gramley, the wife of Mr. Gramley.
(4) Includes 890 shares owned by Gabrielle Kearns, the daughter of Mr. Kearns.
(5) Includes 10,000 shares owned by a limited liability company with which Mr.
Napolitano is associated, but in which shares he disclaims any beneficial
interest.
(6) Mr. Haden became a director of IndyMac in March 2000. In connection with
his election as a director of IndyMac, Mr. Haden received a grant of stock
options covering 20,000 shares of IndyMac Common Stock, which will vest
one year from the date of grant.
(7) Includes 1,000 shares owned by Phyllis Mozilo, the wife of Mr. Mozilo, as
to which shares he disclaims any beneficial interest.
(8) Includes 609 shares held in Mr. Wohl's 401(k) account.
(9) Includes 552 shares held in Mr. Abernathy's 401(k) account.
6
EXECUTIVE OFFICERS
The executive officers of IndyMac are:
Officer
Name Age Office Since
---- --- ------ -------
David S. Loeb....... 76 Chairman of the Board of Directors 1985
Michael W. Perry.... 37 Chief Executive Officer 1993
Richard H. Wohl..... 41 Senior Executive Vice President of IndyMac; 1994
President and Chief Operating Officer of
the Mortgage Banking Division
S. Blair Abernathy.. 38 Executive Vice President of IndyMac; 1994
Executive Vice President, Capital Markets
of the Mortgage Banking Division
Carmella L. Grahn... 36 Executive Vice President and Chief 1993
Financial Officer
Biographical information with respect to Messrs. Loeb and Perry is set forth
above under "Election of Directors--Director Nominees."
Richard H. Wohl is the Senior Executive Vice President of IndyMac and the
President and Chief Operating Officer of IndyMac's Mortgage Banking Division.
Mr. Wohl is responsible for IndyMac's mortgage banking business and each of
its customer channels and products, including business-to-business (brokers
and bankers), business-to-consumer, business-to-realtor and consumer
construction. The Mortgage Banking Division also includes key support
functions such as the consumer lending technology group responsible for
developing and maintaining IndyMac's web-based lending applications and the
secondary marketing group responsible for the pricing, sale and securitization
of IndyMac's mortgage products. Mr. Wohl has previously served IndyMac in
several capacities, including as general counsel and secretary from April 1994
to February 1999, and as Chief Operating Officer in charge of certain
financial and administrative functions from February 1999 to February 2000.
Prior to joining IndyMac in April 1994, Mr. Wohl practiced as an attorney with
Morrison & Foerster in Los Angeles, where he worked in the institutional
lending and corporate areas with a focus on mortgage banking. Mr. Wohl
graduated with distinction from Stanford University and received his J.D. from
the Harvard Law School, where he was an editor of the Harvard Law Review.
S. Blair Abernathy is the Executive Vice President of IndyMac and the
Executive Vice President, Capital Markets of IndyMac's Mortgage Banking
Division. Mr. Abernathy is responsible for the hedging, trading,
asset/liability management and secondary market functions of IndyMac. Prior to
joining IndyMac in February 1994, Mr. Abernathy managed the accounting and
investment functions of Commerce Security Bank, a state chartered bank in
Sacramento, California, as its Senior Vice President and Chief Financial
Officer. From July 1988 to January 1993, Mr. Abernathy served as the Vice
President and Controller of Sunrise Bancorp of California, a publicly traded
bank holding company with banking and mortgage banking subsidiaries.
Carmella L. Grahn is the Executive Vice President and Chief Financial
Officer of IndyMac. Ms. Grahn is responsible for accounting, tax, financial
planning, and analysis and reporting. Prior to joining IndyMac in October
1993, Ms. Grahn was an audit manager in the Financial Services Special
Practice Group at Price Waterhouse. At Price Waterhouse, her clients included
commercial banks, savings and loans, mortgage banks, mutual funds and real
estate developers. She also served as Senior Vice President and Chief
Financial Officer of Olympic National Bank, a publicly traded bank. Ms. Grahn
is a Certified Public Accountant and received a B.A. in accounting from Ohio
University and the Elijah Watt Sells award for ranking in the top 1% of
candidates sitting for the CPA examination nationwide.
7
EXECUTIVE COMPENSATION
The following table sets forth the cash and other compensation paid by
IndyMac and its affiliates to the named executive officers of IndyMac for all
services in all capacities during the years indicated.
Summary Compensation Table
Long-Term
Annual Compensation Compensation Awards
------------------------------------ -------------------------
Securities
Other Restricted Underlying
Name and Principal Annual Stock Options All Other
Position(s) During 1999 Year Salary(1) Bonus(1) Compensation(2) Awards ($) (#) Compensation(3)
- ----------------------- ---- --------- ---------- --------------- ---------- ---------- ---------------
David S. Loeb(4)........ 1999 $550,000 $ -- $ -- $ -- 250,000 $ --
Chairman of the Board 1998 35,917 1,100,000 -- 1,622,185 303,398
1997 35,000 -- -- -- 285,660 --
Angelo R. Mozilo(5)..... 1999 550,000 -- -- -- 250,000 --
Vice Chairman of 1998 35,917 1,100,000 -- 1,629,685 438,604 2,155
the Board and President 1997 35,000 -- -- -- 285,660 --
Michael W. Perry(6)..... 1999 695,750 945,000 -- 249,999(7) 250,000 21,502
Chief Executive Officer 1998 695,750 562,500 -- 622,341 959,000 22,746
1997 605,000 850,000 2,083 -- 125,000 39,673
Richard H. Wohl(8)...... 1999 350,000 450,000 -- 100,002(9) 100,000 28,639
Senior Executive Vice 1998 265,000 210,000 -- 169,387 185,000 22,248
President, Chief
Operating 1997 225,000 325,000 -- -- 40,000 4,750
Officer
S. Blair Abernathy(10).. 1999 225,000 250,000 -- 49,996(11) 50,000 4,800
Executive Vice 1998 225,400 150,000 -- 106,241 105,508 5,515
President, Capital
Markets 1997 195,000 213,000 1,032 -- 17,500 8,415
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(1) Salary and bonus amounts deferred at the election of the named executive
officer to a subsequent year are included for the fiscal year in which
such amounts were earned.
(2) The amount of other annual compensation consists of interest accrued on
deferred compensation in excess of the applicable federal rate.
(3) Amounts shown for 1999 consist of the following: (i) Mr. Perry: split-
dollar life insurance premiums paid by IndyMac--$16,702; IndyMac
contribution to 401(k) Plan--$4,800; (ii) Mr. Wohl: split-dollar life
insurance premiums paid by IndyMac--$23,839; IndyMac contribution to
401(k) Plan--$4,800; and (iii) Mr. Abernathy: IndyMac contribution to
401(k) Plan--$4,800.
(4) Mr. Loeb is a director and executive officer of IndyMac. The amount of
salary for 1999 represents compensation for Mr. Loeb's service as an
executive officer pursuant to an employment agreement entered into with
IndyMac on December 30, 1998. See "Employment Agreements" and
"Compensation Committee Report on Executive Compensation." The amount of
salary for 1998 and 1997 represents fees paid for Mr. Loeb's service as a
director of IndyMac. The amount of bonus for 1998 represents a bonus paid
in connection with the signing of the employment agreement. In 1999 and
1997, Mr. Loeb received no bonus for his service as an officer of
IndyMac.
(5) Mr. Mozilo has resigned from his positions as Vice Chairman and President
of IndyMac. See "Employment Agreements." The amount of salary for 1999
represents compensation for Mr. Mozilo's service as an executive officer
pursuant to an employment agreement entered into with IndyMac on December
23, 1998. See "Employment Agreements" and "Compensation Committee Report
on Executive Compensation." The amount of salary for 1998 and 1997
represents fees paid for Mr. Mozilo's service as a director of IndyMac.
The amount of bonus for 1998 represents a bonus paid in connection with
the signing of the employment agreement. In 1999 and 1997, Mr. Mozilo
received no bonus for his service as an officer of IndyMac.
8
(6) Mr. Perry is currently Chief Executive Officer and Vice Chairman of the
Board of Directors of IndyMac. Mr. Perry is compensated as an executive
officer of IndyMac. See "Compensation Committee Report on Executive
Compensation."
(7) Restricted stock awards include 23,952 shares of restricted Common Stock
granted on March 5, 1999 as a part of IndyMac's annual stock award
grants, valued at $10.4375 per share as of such date, vesting over a
period of five years, one-fifth each on the first five anniversaries of
the grant date. As of December 31, 1999, Mr. Perry held 80,326 shares of
restricted Common Stock, with an aggregate value of $1,051,773. Dividends
will accrue on the shares of restricted Common Stock and will be paid at
the time the related shares of restricted Common Stock vest.
(8) Mr. Wohl is currently Senior Executive Vice President of IndyMac, and
President and Chief Operating Officer of IndyMac's Mortgage Banking
Division.
(9) Restricted stock awards include 9,581 shares of restricted Common Stock
granted on March 5, 1999 as a part of IndyMac's annual stock award
grants, valued at $10.4375 per share as of such date, vesting over a
period of five years, one-fifth each on the first five anniversaries of
the grant date. As of December 31, 1999, Mr. Wohl held 22,136 shares of
restricted Common Stock, with an aggregate value of $308,532. Dividends
will accrue on the shares of restricted Common Stock and will be paid at
the time the related shares of restricted Common Stock vest.
(10) Mr. Abernathy is currently Executive Vice President of IndyMac and
Executive Vice President, Capital Markets of IndyMac's Mortgage Banking
Division.
(11) Restricted stock awards include 4,790 shares of restricted Common Stock
granted on March 5, 1999 as a part of IndyMac's annual stock award
grants, valued at $10.4375 per share as of such date, vesting over a
period of five years, one-fifth each on the first five anniversaries of
the grant date. As of December 31, 1999, Mr. Abernathy held 16,540 shares
of restricted Common Stock, with an aggregate value of $216,571.
Dividends will accrue on the shares of restricted Common Stock and will
be paid at the time the related shares of restricted Common Stock vest.
Stock Option Plans
General. Stock options have been granted to directors and officers of
IndyMac and its subsidiary, IndyMac, Inc. ("IndyMac Operating"), pursuant to
IndyMac's 1998 Stock Incentive Plan (the "1998 Plan"). Additional stock
options were also granted to certain directors and executive officers of
IndyMac under the 1996 Stock Incentive Plan (the "1996 Plan"), which was
terminated in connection with IndyMac's adoption of the 1998 Plan, and under
the 1994 Stock Incentive Plan (the "1994 Plan"), which was terminated in
connection with IndyMac's adoption of the 1996 Plan (the 1994 Plan, the 1996
Plan and the 1998 Plan are collectively referred to herein as the "Stock
Option Plans"). The termination of the 1996 Plan and the 1994 Plan did not
affect the validity of stock options granted thereunder, some of which are
currently outstanding.
Stock Option Grants in Fiscal 1999
Individual Grants
------------------------------------------------------------------
Number of
Securities % of Total
Underlying Options
Options Granted Exercise
Granted to Employees Price Expiration Grant Date
Name (#)(1) in Fiscal Year ($/Share)(2) Date Present Value(3)
---- ---------- -------------- ------------ ---------- ----------------
David S. Loeb........... 250,000 12.21% $10.4375 3/5/09 $568,650
Angelo R. Mozilo........ 250,000 12.21 10.4375 3/5/09 568,650
Michael W. Perry........ 250,000 12.21 10.4375 3/5/09 568,650
Richard H. Wohl......... 100,000 4.89 10.4375 3/5/09 227,460
S. Blair Abernathy...... 50,000 2.44 10.4375 3/5/09 113,730
- --------
(1) All stock options granted become immediately exercisable in the event of a
"Change in Control" as defined in the Stock Option Plans.
9
(2) The exercise price of $10.4375 is the average of the high and low sales
prices for the Common Stock, as published in the Western Edition of The
Wall Street Journal, on the date of grant.
(3) The present value of the options as of the grant date was calculated using
a Black-Scholes single option-pricing model. The assumptions used for the
model were: expected volatility of 59%, risk-free interest rate of return
(approximately equal to the weighted average of the two-year Treasury rate
on the grant date) of 4.69%, expected dividend yield of 0% and time to
exercise of 3 years. No discounting was done to account for non-
transferability or vesting. The actual value, if any, an option holder may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised.
Aggregated Option Exercises in Fiscal Year 1999
and Fiscal Year End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at FY-End (#) at FY-End ($)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
David S. Loeb........... -- -- 151,699 250,000 $1,986,316 $3,273,450
Angelo R. Mozilo........ -- -- 286,905 250,000 3,756,677 3,273,450
Michael W. Perry........ -- -- 389,000 503,000 5,093,488 6,586,181
Richard H. Wohl......... -- -- 50,834 161,666 665,610 2,116,822
S. Blair Abernathy...... -- -- 31,341 83,167 410,372 1,088,972
Loan Plans. The Board of Directors previously adopted two loan plans (the
"Loan Plans") under which loans may be made to officers, directors and
employees of IndyMac in connection with the exercise of stock options granted
under the 1994 Plan and the 1996 Plan. In 1997, the Board of Directors amended
and restated the Loan Plans in an Amended and Restated Loan Plan that
pertained to the 1994 Plan and the 1996 Plan (the "Amended and Restated Loan
Plan"), and in 1998, the Board of Directors amended the Amended and Restated
Loan Plan to provide financing for the exercise of stock options granted under
the 1998 Plan, among other things. The Board of Directors further amended the
Amended and Restated Loan Plan in October 1999.
Under the Amended and Restated Loan Plan, officers, directors and employees
are permitted to obtain loans with principal amounts of up to (x) the purchase
price required to be paid to IndyMac upon the exercise of one or more stock
options, plus (y) any applicable withholding taxes (so long as the sum of the
amounts specified in (x) and (y) do not exceed the fair market value of the
stock on the date of the loan), less (z) any legally required margin amount,
subject to certain additional restrictions that apply to loans made after
October 19, 1999. Loans may be for a period of five years, which term may be
renewed at the Committee's discretion, at interest rates that are determined
by the Compensation Committee and that, at the option of the borrower, are
either fixed for the term of the loan or adjustable annually by IndyMac, with
such interest rates being required to be at all times at least sufficient to
avoid imputed interest required under the Internal Revenue Code of 1986, as
amended (the "Code").
Loans made under the Amended and Restated Loan Plan are recourse loans
(meaning that they are direct, personal obligations of the borrower) and are
secured by pledges of the Common Stock purchased upon the exercise of the
stock options to which they relate. In the event of the sale or transfer of
any of the shares of Common Stock pledged as a security, except under certain
limited conditions, the unpaid principal balance and accrued interest become
immediately due and payable to the extent of the proceeds (net of brokerage
fees) realized from such sale or transfer. Installments of principal and
interest on loans made under the Amended and Restated Loan Plan are due
quarterly, and any dividends paid on the pledged stock are required to be
applied against such installments. To the extent that a dividend for any
quarter is insufficient to pay the accrued interest for a quarterly
installment, the difference is added to the principal of the loan, and to the
extent a quarterly dividend is insufficient to pay a quarterly installment of
principal, the difference is payable at the end of the loan term.
10
Under the Amended and Restated Loan Plan, all loans made on or after October
19, 1999 must comply with the following additional terms: (1) accrued interest
must be paid annually, (2) loans to officers and employees cannot exceed 75%
of the fair market value (as of the exercise date) of the stock pledged to
secure the loan, (3) quarterly mark-to-market margin calls are required on
loans with outstanding principal balances exceeding 90% of the fair market
value of the stock pledged to secure the loan (as of the last business day of
each quarter), and (4) penalties, including termination of the borrower's
employment or directorship, may be imposed for failure to meet margin calls.
In addition, the aggregate amount of loans that may be outstanding to any
borrower is limited to $1 million for directors and officers with the title of
Senior Executive Vice President or above, $500,000 for officers with the title
of Senior Vice President or above and $100,000 for all other borrowers.
In October 1998, the Compensation Committee authorized those officers and
employees, but not non-employee directors, of IndyMac and its affiliates who
had outstanding loans under the Amended and Restated Loan Plan an opportunity
to make a one-time election to, among other alternatives, sell back to IndyMac
at the then fair market value the pledged shares of Common Stock securing
their notes (as well as other IndyMac Common Stock owned by the officer or
employee) and to finance any remaining balance of the original loan with a new
unsecured loan or to make various modifications to the interest rate
provisions or maturities of their loans, including one alternative under which
the loan maturity could be extended to 20 years.
The Board of Directors has imposed a limit, that is to be met by December
31, 2002, on the aggregate amount of loans that may be outstanding at any time
under the Amended and Restated Loan Plan and any other loan plan adopted by
the Board of Directors equal to 1% of IndyMac's consolidated net worth. In
October 1999, the Board of Directors authorized loan modification programs for
secured and unsecured loans to enable IndyMac to meet the 1% limitation
maintained under the Amended and Restated Loan Plan ("Loan Modification
Programs"). Under the Loan Modification Programs, each borrower was given a
one-time opportunity to convert the borrower's outstanding loan to a non-
interest bearing loan that requires the borrower to pay down the borrower's
outstanding loan balance by 20% on the third business day following the
release of IndyMac's earnings for the quarters ended December 31, 2000, 2001,
2002, 2003 and 2004 (each, a "Balloon Payment"). Pursuant to the Loan
Modification Programs, if a borrower fails to make a Balloon Payment on the
applicable due date, the loan will revert to an interest bearing loan at the
fixed short or mid-term applicable federal rate, plus 5%. With respect to
secured loans, pledged IndyMac Common Stock will be released following a
Balloon Payment to the extent that the remaining outstanding principal balance
of the loan is no greater than the loan-to-value ratio of the loan on the date
the loan was modified, except that no pledged shares will be released with
respect to a loan if the borrower has any outstanding loans which are
undersecured. To satisfy a Balloon Payment with respect to a secured loan, the
borrower may elect to sell the shares of IndyMac Common Stock pledged in
connection with the applicable loan at a price equal to their fair market
value on the Balloon Payment date.
Tax Buy-Back Program. In October 1999, the Board of Directors expanded
IndyMac's Withholding Tax Buy-Back Program, originally adopted with respect to
certain restricted stock awards vesting in June 1999 ("Tax Buy-Back Program")
to apply to certain restricted stock awards that vest after that date.
Recipients of restricted stock awards recognize ordinary income based on the
fair market value of the awards on the vesting date and are required to pay
taxes on such income within two weeks of the vesting date. The Tax Buy-Back
Program is intended to assist certain recipients of restricted stock awards
with the payment of payroll tax obligations. Under the Tax Buy-Back Program, a
recipient may elect to resell to IndyMac, (subject to otherwise applicable
IndyMac Board policies and legal restrictions) shares of Common Stock
underlying the vested portion of each award at a price equal to the fair
market value of such stock on the vesting date, not to exceed the number of
shares equal to the recipient's statutory tax withholding obligation. The
Board also approved an alternative loan program for officers of IndyMac and
IndyMac Operating whereby recipients may elect to finance the payment of taxes
arising from the vesting of awards with a loan from IndyMac. Loans granted
under this loan program may not exceed the recipient's statutory tax
withholding obligation, are made with full recourse to the borrower and may
not exceed a term of one year. The loans must be secured by IndyMac Common
Stock and the plan limits the principal balance of each loan to 75% of the
fair market value of the pledged stock. Loans bear a fixed rate of interest,
are marked to market on a quarterly basis and are subject to a margin call if
the outstanding principal
11
balance exceeds 90% of the fair market value of the pledged stock. At the
Board's discretion, an officer failing to satisfy a margin call within ten
business days of written notification may be terminated.
Loan Forgiveness. To provide additional incentive and increase morale among
the affected officers and employees, the Board adopted a program in October
1999 whereby one-half of the outstanding principal balance plus accrued
interest of the unsecured loans to participants with titles of Executive Vice
President and below will be forgiven on December 31, 2000 and the remaining
outstanding balance plus accrued interest will be forgiven on December 31,
2001, provided the participants are employed with IndyMac or IndyMac Operating
and in good standing on the foregoing dates, to be determined in the sole and
absolute discretion of IndyMac's Chief Executive Officer.
The following tables sets forth information as of December 31, 1999 relating
to loans made by IndyMac to certain executive officers and directors of
IndyMac under the Amended and Restated Loan Plan.
Balance at Highest
December 31, Balance Interest
Name Notes Outstanding(1) 1999 During 1999 Rate(2)
- ---- --------------------- ------------- ------------- --------
S. Blair Abernathy.. Note 1 (unsecured) $ 14,467.52 $ 33,660.89 5.46%
Lyle E. Gramley..... Note 1(3) 0.00 66,665.88 5.56%
Note 2(3) 28,996.94 31,378.07 0%
Note 3 334,295.60 337,797.12 0%
Note 4 468,289.83 531,033.52 0%
Thomas J. Kearns.... Note 1 0.00 240,000.00 5.56%
David S. Loeb....... Note 1 (unsecured) 4,248,302.07 4,248,302.07 5.46%
Angelo R. Mozilo.... Note 1 (unsecured)(4) 3,322,705.00 3,322,705.00 5.46%
Note 2 (unsecured)(4) 23,511.16 23,511.16 5.67%
- --------
(1) Unless otherwise indicated, loans are secured by the pledge of IndyMac
Common Stock.
(2) All interest bearing loans are fixed rate loans. Non-interest bearing
loans were previously interest bearing loans that were converted to non-
interest bearing loans pursuant to the Loan Modification Programs.
(3) On September 28, 1999, IndyMac purchased 2,100 shares of IndyMac Common
Stock from Mr. Gramley to reduce the outstanding principal balance of Note
1, which matured on September 28, 1999. The per share purchase price for
the shares was equal to the average of the high and low reported sales
prices of IndyMac Common Stock, as published in the Western Edition of The
Wall Street Journal, on the purchase date. In conjunction with the
maturity of this loan, the non-interested members of the Board of
Directors approved Note 2 to Mr. Gramley.
(4) These loans were forgiven on February 29, 2000 in connection with Mr.
Mozilo's resignation from his positions as Vice Chairman and President of
IndyMac. See "Employment Agreements" herein.
12
Defined Benefit Pension Plan
The following table illustrates annual pension benefits under IndyMac
Operating's Defined Benefit Pension Plan (the "Pension Plan"), under which
officers of IndyMac participate, for participants retiring in 2000 at age 65
payable in the form of a life annuity under various levels of compensation and
years of service. The pension benefits in the table are not subject to
deduction for Social Security or other offset amounts.
Pension Plan Table
Years of Service
-------------------------------------------------------
Final Average
Compensation(1) 5 10 15 20 25 30 35
--------------- ------- ------- ------- ------- ------- ------- -------
$ 125,000............. $ 8,380 $17,860 $28,990 $38,870 $46,870 $54,870 $62,870
150,000............. 10,260 21,860 35,490 47,620 57,490 67,370 77,250
175,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
200,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
225,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
250,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
300,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
400,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
500,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
1,000,000............. 10,710 22,820 37,050 49,720 60,040 70,370 80,700
- --------
(1) As a result of a limitation, effective January 1, 1997, under the Code,
annual compensation in excess of $160,000 is not taken into account in
calculating benefits under the Pension Plan.
The compensation used for Pension Plan purposes is the amount shown in the
Salary column of the Summary Compensation Table, subject to the $160,000
limitation under the Code. The following table sets forth the number of years
of credited service of each executive officer listed in the Summary
Compensation Table.
Credited
Years of
Name Service
---- --------
David S. Loeb..................................................... 1
Angelo R. Mozilo.................................................. 1
Michael W. Perry.................................................. 7
Richard H. Wohl................................................... 6
S. Blair Abernathy................................................ 6
Benefits are 100% vested after five years of service. A participant would
become fully vested in his or her accrued normal retirement benefit regardless
of the participant's length of service if participant's employment is
terminated by IndyMac other than for "Cause" within a two-year period
following a "Change in Control" (as both terms are defined in the Pension
Plan).
Employment Agreements
In December 1998, David S. Loeb, Chairman of IndyMac, and Angelo R. Mozilo,
then Vice Chairman and Chief Executive Officer of IndyMac, entered into
employment agreements with IndyMac.
Mr. Loeb's employment agreement provides for the following: (i) an annual
base salary of $550,000, subject to annual review by the Board of Directors
for possible increase (ii) an annual grant of stock options and restricted
Common Stock as determined by the Compensation Committee of the Board of
Directors (iii) all other rights and benefits provided to executive officers
of IndyMac generally. The employment agreement also provides that if Mr.
Loeb's employment is terminated by IndyMac other than for "Cause" (as defined
in the agreements), or by either of them for "Good Reason" (as defined in the
agreements), including voluntary
13
termination within one year of a "Change in Control" (as defined in the
agreements), IndyMac is required to pay the following: (i) a $1,000,000
termination bonus, plus (ii) an amount equal to (a) if such termination occurs
in 2000, 2.5 times the Base Amount, (b) if such termination occurs in 2001, 2
times the Base Amount, (c) if such termination occurs in 2002, 1.5 times the
Base Amount, and (d) if such termination occurs in 2003, an amount equal to
the Base Amount. In February 2000, Mr. Loeb's employment agreement was amended
(the "Amendment") to prohibit him from accepting any position, with the
exception of part-time employment, with CCI, its subsidiaries or affiliates.
Beginning with fiscal year 2000, the Amendment also provides that Mr. Loeb
will receive an annual grant of stock options to purchase 125,000 shares of
Common Stock. Mr. Loeb's employment agreement will expire on December 31,
2003, unless earlier terminated in accordance with the provisions thereof.
Mr. Mozilo, who co-founded IndyMac with Mr. Loeb and who has served as an
officer and director of IndyMac since its formation in 1985, resigned as
President and Vice Chairman of the Board of Directors of IndyMac effective
February 29, 2000 to devote his full attention to CCI, for which he serves as
Chairman and Chief Executive Officer. He also resigned from the Board of
Directors of IndyMac on March 31, 2000. The terms of Mr. Mozilo's resignation
are set forth in a Resignation Agreement (the "Resignation Agreement"),
pursuant to which Mr. Mozilo waived his right to receive any further
compensation, including the termination bonus and stock options for the year
2000, as described in his employment agreement, the terms of which were
identical to those described above relating to Mr. Loeb's employment agreement
as in effect prior to the Amendment. In consideration for Mr. Mozilo's waiver
of his rights under the employment agreement, he was granted 25,000 shares of
unrestricted common stock and options to acquire 67,115 shares of common
stock. The stock options will vest as to one-third of the shares on each of
the first, second and third anniversaries of the date of the grant. All shares
of restricted common stock held by Mr. Mozilo on the resignation date, the
67,115 stock options referenced above and all other stock options held by Mr.
Mozilo as of December 31, 1999, will vest in accordance with their original
vesting schedules as if Mr. Mozilo had remained an employee of IndyMac
throughout the term of the awards. However, all of Mr. Mozilo's outstanding
stock options will expire no later than March 30, 2004. Under the Resignation
Agreement, IndyMac forgave the aggregate principal amount and accrued interest
of Mr. Mozilo's outstanding unsecured loans from IndyMac totaling $3,346,216.
In addition, Mr. Mozilo received a credit of $3,421,188, which is intended to
cover the income tax liability he will incur in connection with the grant of
the 25,000 shares of unrestricted common stock, the loan forgiveness and the
credit.
Messrs. Perry and Wohl executed new employment agreements effective February
4, 2000 (each, a "2000 Employment Agreement"). Mr. Perry's 2000 Employment
Agreement provides for the following: (i) an annual base salary of $760,000,
subject to annual review by the Compensation Committee for possible future
increase, and (ii) a stock option grant of 1,000,000 shares of Common Stock on
each of February 4, 2000 and February 5, 2001. Mr. Perry's 2000 Employment
Agreement does not provide for any additional compensation. However, the
Compensation Committee, in its discretion, may determine whether or not to
award Mr. Perry any additional incentive compensation. Mr. Wohl's 2000
Employment Agreement provides for the following: (i) an annual base salary of
$450,000 subject to annual review by the Compensation Committee for possible
future increase; (ii) annual incentive compensation in an amount determined
pursuant to an annual incentive plan; for fiscal year 2000, the maximum amount
of any incentive compensation award shall be $200,000; (iii) guaranteed
minimum annual cash compensation in the amount of $500,000, including Mr.
Wohl's base salary and any incentive compensation; and (iv) a stock option
grant of 500,000 shares of Common Stock on each of February 4, 2000 and
February 5, 2001. Stock options granted under the 2000 Employment Agreements
will vest equally over five years from their respective dates of grant. All
stock options or restricted stock granted under prior employment agreements
are subject to the terms of the 2000 Employment Agreements, with the exception
of the vesting schedules, which will not change. The 2000 Employment
Agreements expire February 5, 2003 unless earlier terminated in accordance
with the provisions thereof.
During 1997, IndyMac Operating entered into an employment agreement with S.
Blair Abernathy, IndyMac's Executive Vice President, Capital Markets Secondary
Marketing. The employment agreement provides for base compensation, incentive
compensation and stock options, as well as other specified benefits. Subject
to certain limitations, Mr. Abernathy's employment agreement will expire on
December 31, 2000.
14
Pursuant to the terms of their individual employment agreements then in
effect, Messrs. Loeb and Mozilo, Perry, Wohl and Abernathy were paid base
salaries of $550,000, $550,000, $695,750, $350,000 and $225,000, respectively,
for fiscal year 1999. The employment agreements as in effect in 1999 provided
for incentive compensation each year ending during the term thereof in the
form of an annual cash bonus calculated as follows: Mr. Perry, based on an
incentive matrix relating to earnings per share for fiscal year 1999 and the
percentage change in earnings per share from fiscal year 1998; Mr. Wohl, one-
half based on an incentive matrix relating to earnings per share for fiscal
year 1999 and the percentage change in earnings per share from 1998 and one-
half based on the achievement of administrative and operational objectives by
Mr. Wohl; and Mr. Abernathy, one-half based on an incentive matrix relating to
earnings per share growth and one-half based on the achievement of specific
goals and objectives by Mr. Abernathy.
In 1997, IndyMac's stockholders approved the annual cash incentive
compensation provisions of Mr. Perry's employment agreement then in effect so
that such compensation would qualify for a tax deduction for IndyMac pursuant
to Section 162(m) of the Code. Section 162(m) limits the corporate deduction
for compensation paid to the executive officers named in the Summary
Compensation Table to $1 million unless the amount by which such compensation
exceeds the $1 million threshold is based upon performance goals that are
subject to stockholder approval. The exemption from the limitation on
deductibility provided by the 1998 stockholder approved does not apply to Mr.
Perry's 2000 Employment Agreement, which, as further described below, does not
include specific performance goals.
The employment agreements in effect for 1999 for Messrs. Perry, Wohl and
Abernathy provided for additional incentive compensation in the form of grants
of stock options and restricted Common Stock for such number of shares of
IndyMac Common Stock as the Compensation Committee determines, taking into
account each officer's and IndyMac's performance and competitive practices
then prevailing regarding the granting of stock options. All stock options
granted to Messrs. Perry, Wohl and Abernathy (i) will be awarded pursuant to
IndyMac's then current stock option plan, (ii) will have an exercise price
equal to the fair market value of the IndyMac Common Stock at the time of the
grant and will become exercisable in three equal annual installments and (iii)
will become immediately and fully exercisable in the event of a Change of
Control (as defined in the agreements) or in the event that Messrs. Perry's,
Wohl's or Abernathy's employment, as the case may be, is terminated due to
death or disability or by IndyMac (or any successor thereto) other than for
Cause (as defined in the agreements).
In consideration of an agreement not to compete with IndyMac within North
America for a period of one year after termination of employment, IndyMac has
agreed to continue to employ Messrs. Perry, Wohl and Abernathy and provide the
compensation and benefits described in their respective employment agreements.
Messrs. Perry, Wohl and Abernathy will receive certain severance payments upon
termination of employment for reasons other than for Cause. Mr. Perry's
severance payment will be a single payment equal to $5,000,000, plus the
additional benefits described in his employment agreement. The amount of Mr.
Wohl's severance payment will equal the sum of his annual base salary through
his last day of employment, a single payment in an amount of cash equal to
three times his guaranteed minimum annual compensation, and the additional
benefits described in his employment agreement. Mr. Abernathy's severance will
equal the sum of his annual base salary through his last day of employment,
the incentive compensation relating to the immediately preceding fiscal year,
any unpaid incentive compensation that relates to the prior fiscal year, and
any proportional payment of incentive compensation due for the current year,
based on aggregate incentive compensation for the immediately preceding fiscal
year (if such termination occurs on a date prior to the end of a fiscal year),
plus the additional benefits described in his employment agreement.
Compensation Committee Report on Executive Compensation
General
Compensation for the executive officers of IndyMac is administered under the
direction of the Compensation Committee. The Compensation Committee is
composed of Messrs. Gramley, Kearns and
15
Napolitano, who are non-employee directors of IndyMac (the "Non-Employee
Directors"). IndyMac's executive compensation program generally consists of
three main components: (1) base compensation, (2) annual cash incentive
compensation, and (3) stock options and restricted Common Stock to provide
long-term incentives for performance and to align executive officer and
stockholder interests.
The philosophy behind IndyMac's executive compensation programs is to
attract, motivate and retain the executives needed in order to maximize the
creation of long-term stockholder value. The factors historically used by the
Compensation Committee to calculate compensation of executive officers
include: (1) the responsibilities of the executive officers with IndyMac, (2)
achievement of individual business objectives established prior to the
beginning of each fiscal year, (3) business unit and overall performance of
IndyMac, including earnings per share for the applicable fiscal year and the
percentage change in earnings per share from the prior fiscal year,
(4) amount, form and timing of prior compensation amounts, and (5)
compensation levels of executives with comparable rank in a peer group of
mortgage banking companies.
Compensation of Messrs. Loeb, Mozilo and Perry
During 1999, compensation for Messrs. Loeb, Mozilo and Perry was determined
pursuant to the terms of their respective employment agreements. Pursuant to
their employment agreements, Messrs. Loeb and Mozilo received their annual
base compensation of $550,000 each. Neither officer received a bonus. Mr.
Perry's former employment agreement contemplated that a 15% increase in
IndyMac's earnings per share over the preceding fiscal year normally would
result in a 10% increase in the annual rate of base compensation, although the
exact amount of increase, if any, was determined by the Compensation
Committee. Mr. Perry's 2000 Employment Agreement also contemplates that his
base salary will normally increase by at least 10%, with the exact amount, if
any, to be determined by the Compensation Committee. The percentage change in
earnings per share between fiscal years 1997 and 1998 was 11.6%; accordingly,
Mr. Perry's base compensation rate remained $695,750 for fiscal year 1999. Mr.
Perry's former employment agreement also contemplated that he would be paid a
non-discretionary incentive bonus determined by reference to an incentive
matrix contained in the employment agreement. The two variables in the
incentive matrix were the earnings per share of IndyMac for the applicable
fiscal year and the percentage change in earnings per share from the prior
year. Based on this incentive matrix, in fiscal year 1999, Mr. Perry received
a cash incentive bonus of $945,000.
Compensation of Other Named Executive Officers
Compensation for 1999 for Messrs. Wohl and Abernathy was determined pursuant
to the terms of their respective employment agreements. Pursuant to their
employment agreements, for fiscal year 1999, Messrs. Wohl's and Abernathy's
annual base compensation was $350,000 and $225,000, respectively. In setting
the 1999 annual base compensation rate for Messrs. Wohl and Abernathy, the
Compensation Committee considered their responsibilities and achievement of
previously established business objectives, individual business unit and
overall performances of IndyMac, the amount, form and timing of his prior
compensation amounts, and the compensation levels of executives with
comparable rank in a peer group of mortgage banking companies. Each of Messrs.
Wohl and Abernathy was also awarded a bonus for 1999 in the amount of $450,000
and $250,000, respectively.
Stock Options and Restricted Stock Awards
In addition to reviewing the compensation arrangements of executive
officers, for 1999 the Compensation Committee awarded stock options and shares
of restricted Common Stock pursuant to the 1998 Plan, as amended. Under the
1998 Plan, executive officers are eligible to receive stock options, shares of
restricted Common Stock, stock appreciation rights and certain other share
related awards. The Compensation Committee determined such awards by using
criteria set forth in the 1998 Plan, which includes the responsibilities and
contributions of the individual and the other compensation payable to such
person.
16
In determining the stock option and restricted stock awards for Messrs. Loeb
and Mozilo, the Compensation Committee considered their performance and that
of IndyMac, and the competitive practices then prevailing regarding the
granting of stock options and restricted shares. Pursuant to the terms of
their respective employment agreements, for fiscal year 1999, Messrs. Loeb and
Mozilo were each entitled to be granted stock options for at least 100,000
shares of Common Stock. Each of Messrs. Loeb and Mozilo was awarded
250,000 stock options based on the Compensation Committee's assessment of
their performance in 1999 and desire to provide incentive for future
performance. The stock options will vest one year from the date of the
original grant, and upon certain other events.
Pursuant to the terms of their employment agreements, in considering the
stock option and restricted stock awards for Messrs. Perry, Wohl and Abernathy
during 1999, the Compensation Committee took into account their performance
and the performance of IndyMac in meeting earnings per share goals. The
Compensation Committee also established guidelines for the granting of stock
options and restricted Common Stock at various officer levels. Pursuant to
these guidelines, (i) Mr. Perry was eligible for a grant of stock options and
restricted Common Stock of up to 2.5 times his annual base salary, to be
allocated 75% to stock options and 25% to restricted Common Stock, (ii)
officers at the Senior Executive Vice President level (Mr. Wohl) were eligible
for a grant of stock options and restricted Common Stock of up to 1.5 times
each such officer's annual base salary, to be allocated 75% to stock options
and 25% to restricted Common Stock, and (iii) officers at the Executive Vice
President level (Mr. Abernathy) were eligible for a grant of stock options and
restricted Common Stock of up to the amount of each such officer's annual base
salary, to be allocated 75% to stock options and 25% to restricted Common
Stock. Based on the foregoing, the Compensation Committee awarded Messrs.
Perry, Wohl and Abernathy 250,000, 100,000 and 50,000 stock options,
respectively, and 23,952, 9,581 and 4,790 shares of restricted Common Stock,
respectively, during 1999. The stock options will vest in increments of one-
third on each of the first three anniversaries of the date of grant, and upon
certain other events, and the restricted stock will vest in increments of one-
fifth on each of the first five anniversaries of the date of grant, and upon
certain other events, provided that each officer remains in the service of
IndyMac until each such anniversary or the occurrence of such other events.
Deductibility of Compensation
Section 162(m) of the Code limits the corporate deduction for compensation
paid to the executive officers named in the Summary Compensation Table to $1
million unless the amount by which such compensation exceeds the $1 million
threshold is based upon performance goals that are subject to stockholder
approval ("performance-based compensation"). IndyMac's stockholders approved
the non-discretionary cash incentive compensation provisions of Mr. Perry's
former employment agreement in 1998, and such compensation is therefore
expected to qualify for deduction by IndyMac pursuant to Section 162(m). The
exemption from the limitation on deductibility provided by the 1998
stockholder approval does not apply to Mr. Perry's 2000 Employment Agreement,
which does not include performance-based compensation provisions.
The Compensation Committee's policy on deductibility is generally to develop
compensation plans that provide for the payment of compensation that is tax
deductible to IndyMac, while recognizing that the legitimate interests of
IndyMac and its stockholders may at times be better served by compensation
arrangements that may not be fully deductible.
The Compensation Committee
Lyle E. Gramley
Thomas J. Kearns
Frederick J. Napolitano
17
Compensation Committee Interlocks and Insider Participation
During fiscal year 1999, Messrs. Gramley, Kearns and Napolitano served as
members of the Compensation Committee. No member of the Compensation Committee
was, during the fiscal year, an officer or employee of IndyMac, nor was any
member of the Compensation Committee formerly an officer of IndyMac. No
executive officer of IndyMac served (i) as a member of the compensation
committee or board of directors of another entity, one of whose executive
officers served on the Compensation Committee or (ii) as a member of the
compensation committee of another entity, one of whose executive officers
served on the Board of Directors.
Certain Transactions with Management and Business Relationships
IndyMac, through Construction Lending Corporation of America, a division of
IndyMac ("CLCA"), has from time to time made loans to builders of residential
construction projects, secured by real property, purchased by such builders
from a company doing business as Loeb Enterprises, LLC, in which IndyMac's
chairman and former chief executive officer, is a major investor together with
his family. The non-family executive managers of Loeb Enterprises, LLC, who
run the day-to-day operations of Loeb Enterprises, LLC, own approximately
26.6% of the equity and profits of that company. Each project is part of a
master planned community that includes various amenities, being developed by
Loeb Enterprises, LLC. In connection with two of the real property sales
transactions between Loeb Enterprises, LLC and the builders to which CLCA has
made construction loans, Loeb Enterprises, LLC has accepted a second mortgage
from each builder to partially finance each builder's purchase of real
property. As part of CLCA's credit review of each project with a second
mortgage, the amount of the second mortgage was considered a part of the
equity of the builder in the project. In each case, the second mortgage is
subordinate to CLCA's financing facility, although both the CLCA financing
facility and the second mortgage are paid down on a unit-by-unit basis.
In the case of each project financed by CLCA, the builder is not affiliated
with either IndyMac or Loeb Enterprises, LLC, the general risk characteristics
of the construction loan are comparable to those for similar projects funded
by CLCA, and the construction loan facility between CLCA and the builder has
been negotiated at arms length on terms consistent with those of similar loans
made by CLCA to other unaffiliated builders. Moreover, each credit facility
has been approved by the disinterested members of the Board of Directors of
IndyMac.
As of December 31, 1999, CLCA had extended eight construction loan
facilities to builders secured by property originally purchased from Loeb
Enterprises, LLC, with total dollar commitments of $24.1 million, and total
loans outstanding of $15.4 million. Loeb Enterprises, LLC, has posted a bond
for the completion of certain infrastructure improvements, such as arterial
roads, drainage, and utilities in the portion of the master planned community
in which builders are currently building, and these improvements have been
substantially completed. In addition, the builders are contractually
responsible to the city of Sparks, Nevada for certain other improvements such
as roads, drainage, and utilities, within the specific subdivisions of
property they have purchased.
In addition to the foregoing loans, in May of 1998, CLCA made a land and
water rights acquisition loan, secured by among other things approximately
42,000 acres of real property, to Coyote Springs Investment LLC, a Nevada
limited liability company, in which Mr. Loeb and his wife hold a 45% interest
and for which Mr. Loeb acts as a managing member. The remaining 55% interest
in the limited liability company is held by members who are not affiliated
with Mr. Loeb or IndyMac. The loan is personally guaranteed by Mr. Loeb and
his wife. The property is intended to be used by the limited liability company
to develop a master planned community. The loan was negotiated at arms length,
and the general risk characteristics of the loan are comparable to other loans
funded by CLCA. Under the terms of the loan, interest is paid monthly, with
annual scheduled principal reductions. The original principal loan amount was
$11.2 million of which $10.3 million remained outstanding at December 31,
1999. The primary source of repayment of the loan is derived from the income
generated from the sale of water rights to a local municipality. The terms of
the loan have been disclosed to and approved by the disinterested members of
the Board of Directors of IndyMac.
18
From time to time, certain directors and executive officers of IndyMac and
IndyMac Operating and associates of such persons were indebted to IndyMac and
IndyMac Operating as customers in connection with mortgage loans and other
extensions of credit by IndyMac and IndyMac Operating. These transactions were
in the ordinary course of business and were on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with unrelated persons, except that for some loan
products interest rates charged were the same as the lowest interest rates
charged other persons or were more favorable for IndyMac and IndyMac Operating
employees and directors than for other persons. None of these loans have
involved more than the normal risk of collectibility or presented other
unfavorable features. In addition, directors, officers and employees of
IndyMac and IndyMac Operating are entitled to receive certain discounts or
waivers of fees or commissions for certain products and services offered by
IndyMac and IndyMac Operating.
In October 1998, IndyMac extended a $100,000 second mortgage loan to
Carmella Grahn, IndyMac's Executive Vice President and Chief Financial
Officer, and Ms. Grahn's spouse, in connection with the purchase of a home.
The loan bears an interest rate of 10% and a term of 15 years. Pursuant to the
terms of the loan, no interest or principal is due unless Ms. Grahn's
employment terminates, at which point the interest rate will be modified and
interest and principal payments will be calculated to ensure payment in full
on the maturity date. The loan will be forgiven over a five-year period, 20%
on each of the first five anniversaries of the origination date, unless her
employment by IndyMac terminates prior to that time. The loan will be forgiven
in its entirety if Ms. Grahn's employment terminates and she is entitled to
severance payments pursuant to her employment agreement with IndyMac.
In November 1998, IndyMac extended a $100,000 second mortgage loan to the
spouse of Mr. Wohl in connection with the purchase of a home. The loan bears
an interest rate of 10% and a term of 15 years. Pursuant to the terms of the
loan, no interest or principal is due unless Mr. Wohl's employment is
terminated for "Cause" (as defined in Mr. Wohl's employment agreement), at
which point the interest rate will be modified and interest and principal
payments will be calculated to ensure payment in full on the maturity date.
The loan will be forgiven over a four-year period, 25% on each of the first
four anniversaries of the origination date, unless his employment by IndyMac
terminates prior to that time. If Mr. Wohl is terminated other than for Cause,
the loan will be forgiven in its entirety.
19
Stock Performance Graph
Effective January 3, 2000, IndyMac converted its tax status from a real
estate investment trust to a taxable corporation. In connection with this
conversion, management of IndyMac believes that the more appropriate indices
for stock performance comparison purposes are the Russell 2000 Index, as the
broad market index, and the Russell 2000 Financial Services Index, as the peer
group index, each of which focuses on small- to mid-cap companies and includes
IndyMac, instead of the NYSE Market Index and the Media General Financial
Services industry group of residential real estate investment trusts, which
IndyMac has used in past years for stock performance comparison purposes. The
following chart compares the total stockholder return (stock price increase
plus dividends) on IndyMac Common Stock from January 1, 1995 through December
31, 1999 with the total stockholder returns for the NYSE Market Index and the
Russell 2000 Index, as broad market indices, and the Media General Financial
Services industry group of residential real estate investment trusts and an
index comprised of companies included in the Russell 2000 Financial Services
Index, as peer group indices. The graph assumes that the value of the
investment in the IndyMac Common Stock and each index was $100 on January 1,
1995 and that all dividends were reinvested.
Comparison Of 5-Year Cumulative Total Return(1)
AMONG INDYMAC MORTGAGE, REIT - RESIDENTIAL,
RUSSELL 2000 FINANCIAL SERVICES INDEX, NYSE MARKET INDEX
RUSSELL 2000 INDEX
[PERFORMANCE GRAPH APPEARS HERE]
Measurement Period REIT - RUSSELL NYSE RUSSELL
(Fiscal Year Covered) INDYMAC RESIDENTIAL 2000 FIN. MARKET 2000 IND.
- --------------------- ------- ----------- --------- ------ ---------
Measurement Pt- 1994 $100.00 $100.00 $100.00 $100.00 $100.00
FYE 1995 $217.70 $116.76 $130.36 $129.66 $128.44
FYE 1996 $299.32 $153.87 $161.66 $156.20 $149.77
FYE 1997 $352.27 $172.72 $219.73 $205.49 $183.23
FYE 1998 $174.29 $149.90 $206.97 $244.52 $178.09
FYE 1999 $237.84 $165.05 $185.49 $267.75 $212.98
Assumes $100 Invested On Jan. 1, 1995
Assumes Dividends Reinvested Through
Fiscal Year Ending Dec. 31, 1999
20
Section 16 Disclosure
Under Section 16(a) of the Securities Exchange Act of 1934 IndyMac's
directors and executive officers are required to report their ownership of and
transactions in IndyMac's Common Stock to the Securities and Exchange
Commission and the New York Stock Exchange. Copies of these reports are also
required to be supplied to IndyMac. Specific dates for filing these reports
have been established by the Securities and Exchange Commission, and IndyMac
is required to report in this Proxy Statement any failure of its directors and
executive officers to file by the relevant due date any of these reports
during 1999. Based solely on its review of the copies of the reports prepared
or received by it, IndyMac believes that all such filing requirements were
satisfied.
PROPOSAL TWO
APPROVAL OF THE 2000 STOCK INCENTIVE PLAN
At the Annual Meeting, stockholders will be asked to approve IndyMac's 2000
Stock Incentive Plan (the "Plan" or the "2000 Plan"), which authorizes
5,000,000 shares (subject to adjustments under the Plan) of IndyMac's Common
Stock, $0.01 par value, for issuance under the Plan. The 2000 Plan was adopted
by the Board of Directors, subject to stockholder approval, on March 1, 2000.
The closing price of IndyMac's Common Stock on February 29, 2000 was $12.6875.
This summary of the material terms of the Plan is qualified in its entirety
by the full text of the Plan, a copy of which is available for review at the
principal executive offices of IndyMac and will be furnished to stockholders
without charge upon written request directed to Investor Relations, IndyMac
Mortgage Holdings, Inc., 155 North Lake Avenue, P.O. Box 7137, Pasadena, CA
91109-7137 (telephone: (800) 669-2300).
Description of Plan
The purpose of the Plan is to enable IndyMac and its subsidiaries and
affiliates to attract, retain and motivate their employees, consultants,
agents, officers and directors by providing incentives related to equity
interests in and the financial performance of IndyMac. The Plan consists of
two separate components: the Employee Program and the Non-Employee Director
Program.
Under the Employee Program, awards may be granted to any person, including
any director of IndyMac or any of its subsidiaries or affiliates, who is an
officer or employee of IndyMac or any of its subsidiaries or affiliates, or
who is an individual who performs services for IndyMac or any of its
subsidiaries or affiliates of a nature similar to those performed by officers
or employees, including consultants and agents. Each of the foregoing persons
is referred to in the Plan as an "Employee".
Under the Non-Employee Director Program, nonqualified options will be
automatically granted to each director of IndyMac who is not an officer or
employee of IndyMac or any of its subsidiaries or affiliates. Each of such
directors is referred to in the Plan as a "Non-Employee Director". Non-
Employee Directors are not eligible for awards under the Employee Program.
Directors who are Employees (as previously defined) are eligible to receive
awards only under the Employee Program. Messrs. Loeb and Perry, each of whom
is both an Employee and a director of IndyMac, are currently eligible only for
Employee awards under the Employee Program. IndyMac's four other current
directors are eligible only for awards of Director Options.
The Employee Program does not prescribe limitations on the price of awards
(except that stock options may not be granted at less than fair market value
on the date of grant) or require minimum holding periods or vesting periods.
To the extent such restrictions are deemed appropriate by the Compensation
Committee of the Board of Directors (the "Committee") for a particular type of
award, to particular individuals, or in particular circumstances, such
restrictions will be included in the individual award memorandum memorializing
the grant of the award to the recipient and setting forth certain specifics
with respect to the terms and conditions of the award (the "Award
Memorandum").
21
The Employee Program will be administered by the Committee, which is
required under the terms of the Plan to consist of two or more IndyMac
directors who are "Non-Employee Directors" as defined in Securities Exchange
Commission Rule 16b-3 and "Outside Directors" as defined for purposes of
Section 162(m) of the Code. The Board of Directors has delegated complete
administrative authority to the Committee with respect to the Employee
Program, including the authority to grant, and amend, any type or combination
of types of awards of stock-related compensation, whether payable in stock,
cash or a combination of the two. The Committee does not have any such
authority with respect to the Non-Employee Director Program, which is a
formula plan that is intended, to the maximum extent feasible, to be self-
effectuating.
As of February 29, 2000 approximately 1,000 officers and employees of
IndyMac and its subsidiaries were eligible to receive awards under the
Employee Program, subject to the power of the Committee to determine all
eligible employees and other persons (other than Non-Employee Directors) to
whom awards will be granted.
The maximum number of shares subject to stock options, stock appreciation
rights (individually an "SAR," and collectively "SARs") and awards of
restricted stock that may be granted to any eligible individual under the
Employee Program in any year is 1,000,000 subject to adjustment. The total
number of shares that may be granted under the Plan is 5,000,000 shares, plus
the number of shares remaining for grant under the 1998 Plan on the date the
1998 Plan is canceled. (On February 29, 2000, 678,942 shares remained
available for awards to be granted under the 1998 Plan.)
The Committee may grant to a holder of an award under the Employee Program,
if the holder is otherwise eligible and consents (if consent is required), a
new or modified award in lieu of an award previously granted with respect to a
number of shares, at an exercise price and for a length of time, which is
greater or lesser than that under the earlier award, or may do so by
cancellation and regrant, amendment, substitution or otherwise, subject only
to the general limitations of the Plan and of applicable law.
In determining the persons to whom awards will be granted under the Employee
Program and the amounts of such awards, the Committee typically will consider
the responsibilities and contributions of such persons, their other
compensation, other factors deemed relevant in light of the type of award
under consideration and the purposes of the Plan, as well as applicable legal
requirements.
Options and similar rights, as well as restricted shares or other awards
will be non-transferrable, with limited exceptions. In general, stock options
exercisable as of the date of a participant's termination of service will
remain exercisable for a period of three months following termination of
service, except that special provisions will apply in the event of death,
permanent disability or termination for cause.
Employee Program
Awards under the Employee Program are not limited to any particular form or
structure and the Committee may grant any combination of stock options (both
incentive and non-qualified), restricted or performance stock, cash and stock
bonuses, SARs, dividend equivalents, performance awards and other stock-
related benefits. Awards may also provide for payment in IndyMac Common Stock,
cash or any combination of the two.
The Committee may delegate ministerial, non-discretionary functions to
individuals who are officers or employees of IndyMac. The Committee may also
delegate to officers of IndyMac the authority to grant awards under the
Employee Program, provided that such delegation is set forth in writing and
includes all limitations and parameters applicable to such awards, and
provided further that such awards are subsequently ratified by the Committee.
Stock options provide for the right to purchase Common Stock at a price not
less than the fair market value of the Common Stock on the effective date of
the grant. Options may be granted, typically without any specific
consideration but subject to vesting limitations, for terms of up to ten
years. Incentive stock options, if used, will be designed to comply with the
provisions of the Code required for special tax treatment and will be subject
to
22
the restrictions for such options contained in the Code, but may subsequently
be modified to disqualify them from such treatment. A maximum number of
5,000,000 shares of IndyMac Common Stock may be granted as incentive stock
options under the Plan.
SARs may be granted in connection with stock options and other awards, or
separately. SARs granted by the Committee in connection with stock options or
other awards will typically provide for payments to the holder based upon the
increase in the price of IndyMac's Common Stock over the exercise price of the
related option or other award, but may also or alternatively be based upon
criteria such as book value or earnings. SARs may provide that the holder of
the SARs may exercise the SARs and/or the option or other awards in whole or
in part and may further provide that exercise of an SAR or an option granted
in tandem will terminate the related option or SAR. The Committee may elect to
pay SARs in cash or in Common Stock or in a combination of cash and Common
Stock. The Committee is also authorized to grant SARs that are exercisable
only on a change in control or in other extraordinary events.
Restricted and unrestricted stock may be awarded or sold to eligible
participants under the Plan for such lawful consideration and subject to such
restrictions as may be determined by the Committee. Restricted stock will
typically be subject to forfeiture if the applicable restrictions (which may
include the lapse of time, performance criteria or other factors) are not
complied with or removed and generally will be nontransferable until such
restrictions lapse. Recipients of restricted stock, unlike recipients of
options, may have voting rights and may receive dividends on the shares prior
to the time the restrictions lapse.
The Committee may also grant performance awards under the Plan. If granted,
performance awards will generally be based upon specific agreements and may be
paid in cash or in Common Stock or in a combination of cash and Common Stock.
Performance awards may include "phantom" stock awards that provide for
payments based upon increases in the price or value of IndyMac's Common Stock
over a predetermined period. These awards do not involve the issuance of
IndyMac stock but are hypothetical stock "units" that are granted to a
participant and upon which the value of any incentive award will be
calculated. Performance awards may also include cash and stock bonuses that
may be granted by the Committee on an individual or group basis and may be
payable in cash or in Common Stock or in a combination of cash and Common
Stock.
If expressly provided by the Committee, awards of restricted stock may be
made to the holder of any option, based upon dividends or distributions that
would have been received had the Common Stock covered by the option been
issued and outstanding on the applicable dividend record date. The terms and
conditions of any such awards of restricted stock will be specified by the
applicable Award Memorandum.
The Committee may approve any combination of payment in cash or Common Stock
to any participant in respect of any performance or incentive award under the
Plan and may approve a payment in Common Stock, or an option or other right to
purchase Common Stock, as part of a deferred compensation arrangement, in lieu
of all or any portion of the compensation otherwise payable to an eligible
employee.
Except as otherwise specified or approved by the Committee, if the recipient
of a stock option award under the Employee Program terminates service as an
Employee for a reason other than Cause (as determined by the Committee in its
sole discretion), death, or permanent and total disability, the holder may at
any time within a period of three months after such termination exercise such
stock option to the extent such stock option was exercisable on the date of
such termination. If the holder terminates service as an Employee by reason of
permanent and total disability, or if the holder becomes permanently and
totally disabled within three months after termination (other than termination
for cause), the holder may at any time within a period of twelve months after
such termination exercise such stock option to the extent such stock option
was exercisable on the date of such termination. If the holder terminates
service as an Employee by reason of death, or if the holder dies within three
months after termination (other than termination for cause), then such stock
option may be exercised within a period of twelve months after the holder's
termination of service as an Employee, to the extent such stock option was
exercisable on the date of such termination. In no event, however, may any
stock option be exercised by any holder after its expiration date.
23
In the event of a Change in Control, as defined below, of IndyMac, awards
under the Employee Program become fully vested and immediately exercisable.
The Committee is authorized, however, to limit the duration of such
acceleration of Employee awards. The Committee may also make an affirmative
determination in light of all circumstances surrounding a transaction or group
of related transactions that a Change in Control has or has not occurred for
purposes of the Plan. In making any such determination, the Plan provides that
the Committee shall consider, without limitation, the likely effect of such
transaction(s) on the makeup of the shareholder base, the Board of Directors
and senior management of IndyMac. If the Committee does not exercise the right
to make such an affirmative determination, a "Change in Control" occurs under
the Plan when (i) there is a complete liquidation or dissolution of IndyMac or
a disposition of all or substantially all of the assets of IndyMac (other than
a transfer to a subsidiary of IndyMac); (ii) a merger, consolidation or
reorganization involving IndyMac is consummated, unless such transaction is a
Non-Control Transaction (as defined in the Plan); (iii) any entity or group
acquires (other than directly from IndyMac) 25% or more of the then
outstanding Common Stock or the combined voting power of IndyMac's then
outstanding voting securities (provided that acquisitions of such securities
by (a) IndyMac or any of its subsidiaries, (b) any employee benefit plan
maintained by IndyMac, IndyMac Operating or any subsidiary of IndyMac or (c)
any other entity or group in connection with a Non-Control Transaction shall
not constitute a change in control for purposes of the Plan); or (iv) the
individuals who as of March 1, 2000 were members of the Board of Directors
(the "Incumbent Board") cease for any reason to constitute at least two-thirds
of the members of the Board of Directors (provided that any new director
nominated or elected by the stockholders and approved by a vote of at least
two-thirds of the Incumbent Board will be treated as a member of the Incumbent
Board for purposes of the Plan).
Non-Employee Director Program
Under the Non-Employee Director Program of the Plan, each Non-Employee
Director will be entitled to receive annual grants of nonqualified stock
options ("Director Options") to purchase the number of Common Shares that
equals 0.025% of the issued and outstanding shares of IndyMac Common Stock as
of the end of IndyMac's preceding fiscal year (excluding Common Stock held in
treasury by IndyMac), subject to a minimum grant of Director Options covering
not less than 7,500 shares for each Non-Employee Director. Newly elected Non-
Employee Directors will automatically receive a grant of Director Options upon
election as follows: (i) if the Non-Employee Director is elected within six
months of the annual grant date, a grant of Director Options for the number of
shares covered by the most recent annual grant, and (ii) if the Non-Employee
Director is elected more than six months following the most recent annual
grant date, but before the next annual grant date, a grant of Director Options
for one-half the number of shares covered by such grant. The Director Options
will have exercise prices equal to the per share fair market value of
IndyMac's Common Stock on the date of grant, will become fully exercisable on
the first anniversary of the grant date and will expire on the tenth
anniversary thereof. The option exercise price for Director Options may only
be amended by a separate vote of the members of the Board of Directors who are
officers of IndyMac, as well as the full Board, and any such modified exercise
price must be not less than 100% of the fair market value of the Common Stock
on the date of such modification. The exercise price for Director Options must
be paid at the time of exercise and may be paid in cash or its equivalent or
in shares of Common Stock, valued at their fair market value on the date of
exercise, that have been held for at least six months prior to the date of
exercise by the Non-Employee Director.
If a Non-Employee Director's service as a member of the Board of Directors
of IndyMac terminates as a result of death, disability, or retirement, the
director's options will become immediately exercisable in full for a period of
one year or until the earlier expiration of the stated term of the option. If
a Non-Employee Director's service is terminated for any other reason (other
than for Cause as defined in the Plan), any option exercisable as of the date
of termination will remain exercisable until three months after termination or
the earlier balance of the stated term of the option. The Plan also provides
for full vesting and acceleration of exercise dates of options granted to Non-
Employee Directors in the event of a Change in Control of IndyMac.
24
Miscellaneous Provisions
The Plan contains provisions relating to adjustments for certain changes in
IndyMac's capitalization or Common Stock or upon certain specified events. The
number and type of shares or other securities, cash or other property that may
be acquired under the Plan, the maximum number and type of shares or other
securities that may be delivered pursuant to awards, and such other terms as
are necessarily affected by such specified events are subject to adjustment in
the event of a reorganization, merger, recapitalization, stock split, stock
dividend, consolidation, restructuring or similar events.
The Employee Program permits the payment of the option exercise price, or
award price, at the Committee's discretion in cash or with shares of IndyMac's
Common Stock valued at their fair market value, or with a combination of such
shares and cash. IndyMac Common Stock may only be used for such purpose,
however, if it has been held by the participant for at least six months (or
such other period as may be required by applicable law). Other lawful
consideration, which may include a promissory note (under any award financing
plan that may be available or as otherwise approved by the Committee),
services, or cash compensation offset, may also be applied to the purchase or
exercise price of an award under the Employee Program, to the extent
authorized by the Committee. Subject to the requirements of applicable law,
the Board of Directors may authorize loans to Non-Employee Directors to
finance the exercise of awards, but no loan may be made to any Non-Employee
Director to finance the exercise of an award unless (i) the loan is made
pursuant to a full recourse promissory note, and (ii) the loan, if secured by
Common Stock, is made in compliance with applicable federal margin
regulations.
Shares held by a participant other than a Non-Employee Director may also be
used to discharge tax withholding obligations related to the exercise of
options or the receipt of other awards to the extent authorized by the
Committee. In addition, the Committee may grant a cash bonus in the amount of
any tax related to awards under the Employee Program.
The authority to grant new options or awards under the Plan will terminate
on March 1, 2010, unless it is extended or terminated prior to that time by
the Board of Directors. The termination of the Plan will not affect any of the
rights of participants that accrued prior to such termination. The Board of
Directors may, without stockholder approval, suspend or amend the Plan at any
time, and the Committee may, with the consent of a holder, substitute awards
or modify the terms and conditions of an outstanding award, to, among other
changes, extend the term (subject to the maximum ten-year term limit), reduce
the price (but not, in the case of options, below the then market price),
accelerate exercisability or vesting or otherwise preserve benefits of the
award.
The Plan provides that the Board of Directors may, without stockholder
approval, at any time and from time to time, suspend, discontinue or amend the
Plan in any respect whatsoever, except that no such amendment shall impair any
rights under any award previously made under the Plan without the consent of
the holder of the award. Except as and to the extent otherwise permitted by
the provisions of the Plan, no such amendment may, without stockholder
approval, cause the Plan to cease to satisfy any applicable condition of
Securities and Exchange Commission Rule 16b-3 or cause any award under the
Plan to cease to qualify for any applicable exception under Section 162(m) of
the Code.
Shares subject to awards that expire or terminate or otherwise do not vest
for any reason are available for subsequent awards under the Plan.
Tax Consequences of the Plan
The federal income tax consequences of the Plan under current law, which is
subject to change, are summarized in the following paragraphs, which deal with
the general tax principles applicable to the Plan. State and local tax
consequences are beyond the scope of this summary. In addition, this summary
is necessarily general and does not describe all possible federal income tax
effects to particular recipients of awards under the Plan or to IndyMac in all
circumstances.
25
Nonqualified Stock Options
No taxable income will be realized by an optionee upon the grant of a
nonqualified stock option. Upon exercise of a nonqualified stock option, the
optionee will realize ordinary income in an amount measured by the excess of
the fair market value of the shares on the date of exercise over the option
price, and IndyMac will be entitled to a corresponding deduction. Upon a
subsequent disposition of the shares, the participant will realize short-term
or long-term capital gain or loss, depending upon how long the shares were
held. IndyMac will not be entitled to any further deduction at that time.
Special rules will apply if the participant uses previously owned shares to
pay some or all of the option exercise price.
Incentive Stock Options
An optionee who receives an incentive stock option will not be treated as
receiving taxable income upon the grant of the option or upon the exercise of
the option, if the exercise occurs, in general, during the optionee's
employment by IndyMac or within three months after termination of such
employment. Any appreciation in share value after the date of grant will,
however, be an item of tax preference at the time of exercise in determining
liability for the alternative minimum tax. If stock acquired pursuant to an
incentive stock option is neither sold or otherwise disposed of within two
years from the date of grant of the option nor within one year after the date
of exercise, any gain or loss resulting from disposition of the stock will be
treated as long-term capital gain or loss. If stock acquired upon exercise of
an incentive stock option is disposed of prior to the expiration of such
holding periods (a "disqualifying disposition"), the optionee will realize
ordinary income in the year of such disposition in an amount equal to the
excess of the fair market value of the stock on the date of exercise over the
exercise price, or, if less, the excess of the amount realized on the
disqualifying disposition over the exercise price. Any remaining gain will be
taxed at capital gain rates.
IndyMac will not be entitled to any deduction as a result of the grant or
exercise of an incentive stock option, or on a later disposition of the stock
received, after the required holding periods described above. In the event of
a disqualifying disposition IndyMac will be entitled to a deduction equal to
the amount of ordinary income realized by the optionee.
Special rules apply if the participant uses previously owned shares to pay
some or all of the option exercise price.
Restricted Stock
Recipients of restricted stock will recognize ordinary income equal to the
excess of the fair market value of the restricted stock at the time the
restrictions lapse over the amount, if any, which the recipient paid for the
restricted stock. However, the recipient may elect, within 30 days after the
date of receipt, to report the fair market value of the stock as ordinary
income at the time of receipt. IndyMac may deduct an amount equal to the
income recognized by the recipient at the time the recipient recognizes the
income.
The tax treatment of dispositions of restricted stock will depend upon
whether the recipient made an election to include the value of the stock in
income when awarded. If the recipient made such an election, any disposition
after the restrictions lapse will result in a long-term or short-term capital
gain or loss, depending on the period the restricted stock is held. If,
however, such election is made and for any reason the restrictions imposed on
the restricted stock fail to lapse, the individual will not be entitled to a
deduction. If an election is not made, disposition after the lapse of
restrictions will result in short-term or long-term capital gain or loss equal
to the difference between the amount received on disposition and the greater
of the amount paid for the stock by the recipient or its fair market value at
the date the restrictions lapse.
Special rules will apply if the participant uses previously owned shares to
pay some or all of the purchase price, if any, of restricted stock.
26
Stock Appreciation Rights
A participant will not recognize any taxable income at the time of receiving
on SAR, and IndyMac will not be entitled to a deduction for the SAR at that
time. Upon the exercise of a SAR, the participant will generally recognize
ordinary income in an amount equal to the cash and/or fair market value of the
shares received. If a participant receives stock, then the amount recognized
as ordinary income becomes the participant's tax basis for determining gains
or losses. Subsequent gains or losses will be taxable either as short-term or
long-term capital gain or loss, depending on how long the shares are held on
the subsequent sale of such stock. The holding period for the shares received
commences as of the date ordinary income is recognized. IndyMac will be
entitled to a deduction in the amount and at the time that the participant
first recognizes ordinary income.
Performance Awards
A participant who has been granted a performance award will not realize
taxable income at the time of grant, and IndyMac will not be entitled to a
deduction at that time. When an award is paid, whether in cash or shares, the
participant will have ordinary income and IndyMac will have a corresponding
deduction. The measure of such income and deduction will be the amount of cash
and the fair market value of the shares at the time the award is paid.
Dividend Equivalents
A recipient of a dividend equivalent award will not realize taxable income
at the time of grant and IndyMac will not be entitled to a deduction at that
time. The participant will recognize ordinary income when a dividend
equivalent is paid, and IndyMac will be then entitled to a deduction. The
measure of the income and deduction will be the amount of cash and the fair
market value of the shares at the time the dividend equivalent award is paid.
Stock Payments and Bonuses
A participant who receives a stock bonus, or a stock payment in lieu of a
cash payment, will be taxed at the value of the stock on the date of award,
and IndyMac will have a deduction in the same amount.
Accelerated Payments
If, as a result of a changes in control of IndyMac, a participant's options
or SARs become immediately exercisable, or if restrictions immediately lapse
on restricted stock, or if shares covered by a performance award are
immediately issued, the additional economic value, if any, attributable to the
acceleration may be deemed a "parachute payment." The additional value will be
deemed a parachute payment if that value, when combined with the value of
other payments that are deemed to result from the change in control, equals or
exceeds a threshold amount equal to 300% of the participant's average annual
taxable compensation over the five calendar years preceding the year in which
the change in control occurs. In such case, the excess of the total parachute
payments over such participant's average annual taxable compensation will be
subject to a 20% non-deductible excise tax in addition to any income tax
payable. IndyMac will not be entitled to a deduction for that portion of any
parachute payment that is subject to the excise tax.
Section 162(m) Limits
Notwithstanding the foregoing discussion of the deductibility of
compensation under the Plan by IndyMac, Section 162(m) of the Code would
eliminate deductions otherwise available to IndyMac for compensation paid to
its most highly paid executive officers whose compensation is required to be
reported in its annual meeting proxy statement to the extent such persons'
total compensation exceeds $1,000,000 in any year unless such excess
compensation is "qualified performance-based compensation" (as defined) or is
otherwise exempt from these limits on deductibility. The applicable conditions
of an exemption for qualified performance-based
27
compensation plans include, among others, a requirement that the stockholders
approve the material terms of the plans pursuant to which the compensation is
paid. The Plan has been adopted by the Committee subject to stockholder
approval. Although IndyMac believes that certain performance awards under the
Plan may be exempt from such limits as performance based compensation in any
event, other awards under the Plan would not be. No assurance can be given
that compensation payable under the Plan to such persons will be deductible to
IndyMac if such $1,000,000 limitation is exceeded.
Specific Benefits
No awards have been made to date under the Plan. The formula described above
for the determination of the number of stock options to be granted annually
under the 2000 Plan to Non-Employee Directors is different from that contained
in IndyMac's existing 1998 Plan. Neither plan contains any formula for the
determination of awards to be made to officers or employees.
The following table sets forth the number of shares subject to stock options
and the dollar amount of restricted stock that would have been granted during
1999 to officers, employees and Non-Employee Directors if the 2000 Plan had
been in effect during 1999 and if all stock options and restricted stock
granted under IndyMac's existing 1998 Plan to officers, employees and Non-
Employee Directors of IndyMac during 1999 had been granted instead under the
2000 Plan. The amounts shown below are not necessarily indicative of the
amounts that may be granted in any future period under the 2000 Plan.
First Year Plan Benefits
Number of Shares Restricted
Name and Position Subject to Options Stock Awards($)
- ----------------- ------------------ ---------------
David S. Loeb, Chairman of the Board....... 250,000 $ --
Angelo R. Mozilo, President................ 250,000 --
Michael W. Perry, Chief Executive Officer.. 250,000 249,999
Richard H. Wohl, Senior Executive Vice
President................................. 100,000 100,002
S. Blair Abernathy, Executive Vice
President................................. 50,000 49,996
Executive Officers as a Group (6 persons).. 950,000 449,993
Non-Employee Directors as a Group (3
persons).................................. 56,019 --
All Officers and Employees (excluding
executive officers)....................... 1,111,750 1,591,816
Relationship to 1998 Plan
If the 2000 Plan is approved by stockholders, the 1998 Plan will be canceled
and any shares remaining under that Plan will be added to the shares available
for awards to be granted under the 2000 Plan.
Vote Required
Approval of the Plan requires the affirmative vote of holders of a majority
of the shares present or represented and entitled to vote on this matter at
the meeting, provided that the total votes cast must represent over 50% of the
shares entitled to vote on the proposal. If shares are held by a broker in a
street name, the broker will not be entitled to vote such shares absent
specific instructions from the beneficial owners thereof.
The Board of Directors recommends that stockholders vote FOR the 2000 Stock
Incentive Plan. Proxies solicited by the Board of Directors will be so voted
unless the stockholder specifies otherwise.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The following paragraphs summarize certain transactions and relationships
between IndyMac and its affiliates, on the one hand, and CCI and its
affiliates, on the other.
28
CCI is a diversified financial services company whose shares of common stock
are traded on the New York Stock Exchange (symbol: CCR). CCI owned 3,090,860
shares, or 4.1%, of IndyMac's outstanding common stock at December 31, 1999.
IndyMac's third party lending operations are primarily conducted through
IndyMac Operating, a taxable corporation that, prior to January 2000, was not
consolidated with IndyMac for tax or financial reporting purposes. Although
IndyMac owned all of IndyMac Operating's outstanding non-voting preferred
stock and 99% of the economic interest in IndyMac Operating, CHL, a wholly-
owned subsidiary of CCI, owned all of IndyMac Operating's outstanding voting
Common Stock and 1% of the economic interest in IndyMac Operating.
Accordingly, CCI, through its stock ownership of CHL, had the power to elect
directors and officers of CHL and IndyMac Operating, and consequently CCI had
the power to direct CHL's and IndyMac Operating's day-to-day operations.
Effective January 3, 2000, IndyMac purchased all of IndyMac Operating's
outstanding common stock then held by CHL for $1.8 million and IndyMac
Operating thereby became a wholly-owned subsidiary of IndyMac that will be
accounted for on a consolidated basis in future.
As of December 31, 1999, advances due by IndyMac Operating to IndyMac
totaled $34.0 million. Such funds were advanced by IndyMac, under a revolving
credit facility arrangement and certain one-year term borrowing arrangements,
to finance assets of IndyMac Operating. Such advances bear interest at rates
indexed to LIBOR. The interest rate charged on such advances was 9.5% at
December 31, 1999.
Pursuant to a Cooperation Agreement executed in 1997 between IndyMac and CCI
in connection with IndyMac's acquisition of IndyMac's manager, Countrywide
Asset Management Corporation, from CCI, whereby certain services previously
provided to IndyMac by CCI and its affiliates have been provided during a
post-acquisition period, IndyMac incurred expenses of $253,100 in 1999.
IndyMac also incurred certain other expenses payable to CCI in 1999 related to
telephone usage and equipment, and delivery service provided by or through
CCI, of $811,400.
During 1997, IndyMac entered into a sublease agreement for its corporate
headquarters with CCI, while at the same time, CCI subleased space from
IndyMac in IndyMac's former headquarters. As a result, in 1999 IndyMac paid
CCI $3.9 million, and received from CCI $377,900, for lease and sublease
payments.
During 1999, IndyMac purchased approximately $50,000 in non-conforming
mortgage loans from CHL.
In 1987 and 1993, IndyMac entered into servicing agreements appointing CHL
as servicer of pools of mortgage loans collateralizing three series of CMO's
with outstanding balances of approximately $24.3 million at December 31, 1999.
CHL is entitled to an annual fee of up to 0.32% of the aggregate unpaid
principal balance of the pledged mortgage loans. Servicing fees received by
CHL under such agreements were approximately $74,000 in 1999.
All loans purchased by IndyMac for which a REMIC transaction or whole loan
sale is contemplated are committed for sale to IndyMac Operating at the same
price at which the loans were acquired by IndyMac. IndyMac Operating currently
does not purchase any loans from any entities other than IndyMac.
OTHER MATTERS
The Board of Directors knows of no matters other than those listed in the
attached Notice of Annual Meeting that are likely to be brought before the
Annual Meeting. However, if any other matters should properly come before the
Annual Meeting, the persons named in the enclosed proxy will vote all proxies
given to them in accordance with their best judgment on such matters.
29
INDEPENDENT ACCOUNTANTS
Grant Thornton LLP served as IndyMac's independent accountants for the year
ended December 31, 1999. A representative of Grant Thornton LLP will be present
at the Annual Meeting, will have an opportunity to make a statement if he or
she wishes to do so and will be available to respond to appropriate questions.
ANNUAL REPORT AND FORM 10-K
The 1999 Annual Report to Stockholders containing the consolidated financial
statements of IndyMac for the year ended December 31, 1999 accompanies this
proxy statement.
Stockholders may obtain without charge a copy of IndyMac's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999 as filed with the
Securities and Exchange Commission, without the accompanying exhibits, by
writing to Investor Relations, IndyMac Mortgage Holdings, Inc., 155 North Lake
Avenue, P.O. Box 7137, Pasadena, California 91109-7137. A list of exhibits is
included in the Form 10-K, and exhibits are available from IndyMac upon payment
to IndyMac of the cost of furnishing them.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2001 Annual Meeting
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended,
must be received by the Secretary of IndyMac, 155 North Lake Avenue, Pasadena,
California 91101, not later than December 8, 2000 to be considered for
inclusion in IndyMac's proxy materials for that meeting.
Stockholders intending to present business at IndyMac's 2001 Annual Meeting
other than pursuant to Rule 14a-8 must comply with the requirements set forth
in IndyMac's Bylaws. To bring business before an annual meeting, IndyMac's
Bylaws require, among other things, that the stockholder submit written notice
thereof complying with the Bylaws, to the Secretary of IndyMac not less than 90
days nor more than 120 days prior to the anniversary of the preceding year's
annual meeting. Therefore, IndyMac must receive notice of a stockholder
proposal submitted other than pursuant to Rule 14a-8 no sooner than January 23,
2001 and no later than February 22, 2001. If the notice is received before
January 23, 2001 or after February 22, 2001, it will be considered untimely and
IndyMac will not be required to present such proposal at the 2001 Annual
Meeting.
By Order of the Board of Directors
/s/ Richard L. Sommers
Richard L. Sommers
Executive Vice President, General
Counsel and Secretary
Dated: April 7, 2000
30
VOTE BY TELEPHONE OR INTERNET
24 HOURS A DAY, 7 DAYS A WEEK
TELEPHONE
800-524-8516
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in
the box below, and then follow the simple directions.
INTERNET
http://proxy.shareholder.com/nde
Use the Internet to vote your proxy. Have your proxy card in hand when you
access the website. You will be prompted to enter your control number, located
in the box below, to create an electronic ballot.
MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided.
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned the proxy card.
- --------------------------------------------------------------------------------
If you have submitted your proxy by telephone or the Internet there is no need
for you to mail back your proxy card.
- --------------------------------------------------------------------------------
Call Toll-Free To Vote . It's Fast And Convenient
- --------------------------------------------------------------------------------
CONTROL NUMBER FOR
TELEPHONE OR INTERNET VOTING
- --------------------------------------------------------------------------------
800-524-8516
DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET
- --------------------------------------------------------------------------------
Please Detach Here
You Must Detach This Portion of the Proxy Card
Before Returning it in the Enclosed Envelope
- --------------------------------------------------------------------------------
[_]
UNMARKED PROXIES SHALL BE VOTED IN FAVOR OF EACH OF THE FOLLOWING MATTERS unless
specified to the contrary.
1. Election of Directors FOR all nominees WITHHOLD AUTHORITY *EXCEPTIONS
listed below to vote for all
nominees listed below.
[_] [_] [_]
Nominees: 01 - David S. Loeb, 02 - Michael W. Perry, 03 - Lyle E. Gramley, 04 -
Thomas J. Kearns, 05 - Frederick J. Napolitano, 06 - Patrick C. Haden
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below)
*Exceptions
---------------------------------------------------------------------
2. To approve the IndyMac Mortgage Holdings, Inc. 2000 Stock Incentive Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
Consent to future electronic delivery of Annual Report/Proxy Statement (see
explanation on page 2 of the Proxy Statement) [_]
I PLAN TO ATTEND THE MEETING [_] Address Change and/or Comments Mark Here [_]
Please date and sign exactly as your name appears on this card. Joint owners
should each sign. If the signer is a corporation, please sign full corporate
name by a duly authorized officer. Executors, trustees, etc. should give full
title as such.
Dated , 2000
---------------
Signature of Stockholder
Signature of Stockholder
Votes MUST be indicated [X]
(x) in black or blue ink.
Please sign, date and return this proxy card in the enclosed envelope.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INDYMAC MORTGAGE HOLDINGS, INC.
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS MAY 23, 2000
The undersigned hereby appoints David S. Loeb and Michael W. Perry, or
either of them, with full power of substitution, the attorney and proxy of the
undersigned, to appear and to vote all of the shares of stock of IndyMac
Mortgage Holdings, Inc. which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of IndyMac Mortgage
Holdings, Inc. to be held at the Pasadena Hilton Hotel, 150 South Los Robles
Avenue Pasadena, California on May 23, 2000 at 10:00 a.m. and any adjournments
thereof.
Receipt of copies of the Annual Report to Stockholders, the Notice of the
Annual Meeting of Stockholders and the Proxy Statement dated April 7, 2000 is
hereby acknowledged
(continued and to be signed on reverse side.)
INDYMAC MORTGAGE HOLDINGS, INC.
P.O. BOX 11262
NEW YORK, NY 10203-0262