EXHIBIT 10.3
COMPENSATION PLAN
-----------------
Name: CARMELLA L. GRAHN
Effective Date: January 1, 1996
Effective Period: Calendar Year 1996
. Title: Senior Vice President and Chief Accounting Officer
Description of Key Individual and Department/Business Unit Goals: See
Schedule A.
----------
. Base Salary: $165,000 per annum.
. Production/Profitability Bonus:
*Maximum Amount: $60,000 Minimum Amount: $0
*Criteria: See Schedule B.
----------
. Discretionary Bonus:
*Maximum Amount: $125,000 Minimum Amount: $0
*Criteria: See Schedule C.
----------
. Regular Benefits: Standard Countrywide Asset Management Corp. ("CAMC")
dental, medical and insurance plans. Eligible for participation in CAMC
401(k) plan on the first day of the calendar quarter following completion
of one year of service.
. Additional Benefits: Standard Countrywide senior executive benefits
(deferred compensation plan, etc.)
. Vacation: Three (3) weeks per year.
This Compensation Plan is intended to outline the general terms of the base
salary, bonus and benefits that will apply to your position during the period
specified above. This Compensation Plan should not be construed as a contract
of employment and may be amended or revised at any time by the Chief Operating
Officer of CAMC.
Please note that an employee's employment and compensation can be terminated at
any time, with or without cause and with or without notice, at the option of
either CAMC or the employee, and the "at-will" nature of such employment cannot
be changed by any verbal representation or assurance, by implication, or based
upon longevity of service or any other factor. In order to be eligible for any
bonus contemplated by this Compensation Plan, whether related to production,
profitability, performance or otherwise, you must be employed by CAMC on the
date of distribution of such bonus.
This Compensation Plan is the sole, entire and complete document relating in any
way to the subject matter hereof, and expressly supersedes any prior or
contemporaneous agreements or representations, whether oral or written.
/s/ Michael W. Perry By: /s/ Carmella L. Grahn
Michael W. Perry Name: Carmella L. Grahn
Executive Vice President and Title: Senior Vice President and Chief
Chief Operating Officer Accounting Officer
Date: March 20, 1996
2
SCHEDULE B
----------
(PRODUCTION/PROFITABILITY BONUS)
1996 EARNINGS PER SHARE (FULLY DILUTED)
FOR CWM MORTGAGE HOLDINGS, INC. PROFITABILITY BONUS AMOUNT
- --------------------------------------- --------------------------
$1.20 OR LESS $0
$1.21 TO $1.30 20,000 TO $29,999
$1.31 TO $1.40 30,000 TO $39,999
$1.41 TO $1.50 40,000 TO $49,999
$1.51 TO $1.60 50,000 TO $59,999
$1.61 OR MORE $60,000
Earnings per share for CWM Mortgage Holdings, Inc. shall be determined on the
basis of the annual audit conducted by CWM's independent accountants.
If earnings per share for CWM Mortgage Holdings, Inc. fall between any two
threshold amounts set forth above, the Profitability Bonus Amount payable shall
be interpolated by the corresponding percentage.
SCHEDULE C
----------
(DISCRETIONARY BONUS)
1. DETERMINATION OF POTENTIAL DISCRETIONARY BONUS AMOUNT:
------------------------------------------------------
MAXIMUM POTENTIAL APPLICABLE BASE
DISCRETIONARY BONUS AMOUNT BONUS AMOUNT FOR PERFORMANCE PERCENTAGE:
GOAL/OBJECTIVE (125% OF BASE BONUS) CALCULATION PURPOSES EXCELLENT/GOOD/SATISFACTORY/POOR
-------------- -------------------------- -------------------- ------------------------------
A. MASTER SERVICING/CREDIT
LOSS MITIGATION $ 62,500 $ 50,000 125% / 100% / 70% / 0%
B. COST CONTROL $ 15,625 $ 12,500 125% / 100% / 70% / 0%
C. FINANCIAL ACCOUNTING
AND PROJECTIONS $ 15,625 $ 12,500 125% / 100% / 70% / 0%
D. TAX STRUCTURE $ 15,625 $ 12,500 125% / 100% / 70% / 0%
E. SUBJECTIVE COMPONENT $ 15,625 $ 12,500 125% / 100% / 70% / 0%
-------- --------
TOTALS: $125,000 $100,000
- ------
The Potential Discretionary Bonus Amount shall be calculated by (1)
multiplying (x) the Performance Percentage for each Goal/Objective times
-----
(y) the Applicable Base Bonus Amount for such Goal/Objective, and (2)
adding all sums determined pursuant to the preceding clause (1) for each
Goal/Objective. the Maximum Potential Discretionary Bonus Amount shall be
$125,000.
2. Bonus Discount Factor For Company Earnings:
-------------------------------------------
1996 Earnings Per Share (Fully Diluted)
for CWM Mortgage Holdings, Inc. Discretionary Bonus Amount
--------------------------------------- --------------------------
less than $1.00 0%
$1.00 TO $1.24 50%
$1.25 TO $1.34 75%
more than $1.35 100%
Earnings per share for CWM Mortgage Holdings, Inc. shall be determined on
the basis of the annual audit conducted by CWM's independent accountants.
If earnings per share for CWM Mortgage Holdings, Inc. fall between any two
threshold amounts set forth above, the Bonus Discount Factor shall NOT be
interpolated by the corresponding percentage.
3. Actual Discretionary Bonus Amount.
----------------------------------
The Actual Discretionary Bonus Amount shall be calculated by multiplying
(x) the Potential Discretionary Bonus Amount determined pursuant to Part 1
above (from $0 up to $125,000) times (y) the Bonus Discount Factor
-----
determined pursuant to Part 2 above.
Example: $75,000 (Potential Discretionary Bonus Amount) x 50% ($1.20 per
-------
share earnings for 1996) = $37,500 (Actual Discretionary Bonus
Amount).