EXHIBIT 10.4
COUNTRYWIDE FINANCIAL CORPORATION
2003 NON-EMPLOYEE DIRECTORS' FEE PLAN
(As amended and restated September 27, 2005)
SECTION 1
PURPOSE
The Countrywide Financial Corporation 2003 Non-Employee Directors' Fee
Plan (the "Plan") has been established by Countrywide Financial Corporation (the
"Company"), effective as of January 1, 2004 (the "Effective Date") to attract
and retain as members of its Board of Directors persons who are not employees of
the Company or any of its subsidiaries but whose business experience and
judgment are a valuable asset to the Company and its subsidiaries. The Plan
provides for the payment to Directors of fees in the form of some or all of the
following: Annual Retainer Fee, Chairman Retainer Fee, Meeting Fees, and
Restricted Stock Awards (generally, the "Director Fees").
SECTION 2
DIRECTORS COVERED
As used in the Plan, the term "Director" means any person who is elected
to the Board of Directors of the Company as of the Effective Date or at any time
thereafter, and is not an employee of the Company or any of its subsidiaries.
SECTION 3
FEES PAYABLE TO DIRECTORS
3.1 Annual Retainer Fee. Each Director shall be entitled to an annual
retainer fee (the "Retainer Fee") to be paid quarterly, on the last business day
of the quarter for which the Director served in the capacity as a Director
(excluding, on a pro rata basis, the month in which he or she is first elected a
Director and any whole months in which he or she did not serve in such
capacity). The amount of the Annual Retainer Fee shall be as determined in the
sole discretion of the Board of Directors of the Company (the "Board"), with
such amount initially set at Seventy Thousand ($70,000.00) per year until such
time as the Board adjusts such amount.
3.2 Chairman Retainer Fee. A Director who serves as Chairman of the Board
or any committee created by the Board shall be entitled to an additional annual
retainer fee (the "Chairman Retainer Fee") to be paid quarterly, on the last
business day of the quarter for which the Director served in the capacity as a
chairman (excluding, on a pro rata basis, the month in which he or she is first
selected to be the chairman and any whole months in which he or she did not
serve in such capacity). The amount of the Chairman Retainer Fee shall be as
determined in the sole discretion of the Board, with such amount initially set
at Seven Thousand Five Hundred ($7,500.00) per year until such time as the Board
adjusts such amount.
3.3 Lead Director Retainer Fee. A Director who serves as Lead Director for
the Non-employee Members of the Board shall be entitled to an additional annual
retainer fee (the "Lead Director Retainer Fee") to be paid quarterly, on the
last business day of the quarter for which the Director served in the capacity
as the Lead Director (excluding, on a pro rata basis, the month in which he or
she is first selected to be the Lead Director and any whole months in which he
or she did not serve in such capacity). The amount of the Lead Director Retainer
Fee shall be as determined in the sole discretion of the Board, with such an
amount initially set at Twenty-Five Thousand Dollars ($25,000.00) per year until
such time as the Board adjusts such amount. The Lead Director Retainer Fee may
be paid in the form of Restricted Stock in accordance with the rules and
principles of Section 4 and Section 9 hereof.
3.4 Meeting Fees. A Director who attends a meeting of the full Board shall
be entitled to an additional fee (the "Meeting Fee") to be paid on the last
business day of the quarter in which the meeting was held. The amount of the
Meeting Fee shall be as determined in the sole discretion of the Board, with
such amount initially set at One Thousand Five Hundred Dollars ($1,500.00) for
each Board attended in person and Seven Hundred and Fifty Dollars ($750.00) for
each meeting attended other than in person, in a manner acceptable to the Board,
until such time as the Board adjusts such amounts.
SECTION 4
Restricted Stock.
4.1 Annual Restricted Stock Award. Annually, on the first business day of
April, each Director (other than a Director Emeritus - as may be defined by the
Committee from time to time), shall be granted shares of Company's Common Stock,
par value $0.05 per share (the "Stock"), subject to certain restrictions set
forth below (the "Restricted Stock"). The number of shares covered by the
Restricted Stock Award shall be equal to that number of shares whose aggregate
value (based on the Fair Market Value of a share of Stock on the date of grant)
equals Two Hundred Twenty Thousand Dollars ($220,000.000), until such time as
the Board adjusts such amounts, rounded down to the next whole share. The term
"Fair Market Value" shall be as defined in the 2000 Plan (as defined in Section
6.6 below).
4.2 Issuance of Certificates. Subject to the deferral provisions of
Section 9, as soon as practicable following the date of grant of a Restricted
Stock Award, the Company shall issue certificates (the "Certificates") to the
Director receiving the Restricted Stock Award, representing the number of shares
of Stock covered by the Award. Each Certificate shall bear a legend describing
the restrictions on such shares imposed by this Section 4 and may be retained by
the Company during the Restricted Period.
4.3 Rights. Upon issuance of the Certificates, the Directors in whose
names they are registered shall, subject to the restrictions of this Section 4,
have all of the rights of a shareholder with respect to the shares represented
by the Certificate, including the right to vote such shares and to receive cash
dividends and other distributions thereon.
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4.4 Restricted Period. The shares covered by Awards granted under this
Section 4 may not be sold or otherwise disposed of within six (6) months
following their grant date (unless such sale would not affect the exemption
under Rule 16b-3 of the Securities and Exchange Commission) and in addition
shall be subject to the restrictions of this paragraph 4 during the "Restricted
Period." The Restricted Period shall be the period commencing as of the date of
grant and shall lapse with respect to all of the Restricted Stock as of the
business day immediately preceding the anniversary date of the grant.
Notwithstanding the foregoing, the Restricted Period shall lapse and the
Director shall become fully vested in the Restricted Stock upon the earliest of
the following to occur:
(i) The date of the Director's death or disability (as defined by the
Board);
(ii) The date of a Corporate Change (as defined in Section 9 of the 2000
Plan); or
(iii) The date on which the Director becomes a Director Emeritus.
4.5 Restrictions. All shares covered by Awards granted under this Section
4 shall be subject to the following restrictions during the Restricted Period:
(i) Except as may otherwise be provided by the Board, the shares may not
be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of.
(ii) Any additional common shares of the Company or other securities or
property issued with respect to shares covered by Awards granted
under this Section 4 as a result of any stock dividend, stock split
or reorganization, shall be subject to the restrictions and other
provisions of this Section 4.
(iii) A Director shall not be entitled to receive any shares prior to
completion of all actions deemed appropriate by the Company to
comply with federal or state securities laws and stock exchange
requirements.
4.6 Forfeiture. Except as otherwise provided in Section 4.4(i), (ii) and
(iii), in the event that the Director's Date of Termination occurs prior to the
business day immediately preceding the first anniversary of the date of grant,
the Director shall forfeit any and all rights and interests with respect to such
unvested Restricted Stock (or Restricted Stock Units, if a Deferral Election is
applicable) and the Company shall have the right to cancel any such Certificates
evidencing such Restricted Stock.
4.7 Date of Termination. A Director's "Date of Termination" shall be the
date on which the Director is no longer providing services to the Company as a
Director.
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SECTION 5
CHANGE IN CONTROL
In the event of a Corporate Change, the Restricted Period with respect to
all unvested Restricted Stock (or corresponding Restricted Stock Units) shall
immediately lapse and the Director shall become fully vested in such shares of
Stock (or Stock Units, as the case may be).
SECTION 6
OPERATION AND ADMINISTRATION
6.1 Administration.
(i) The Plan and all benefits pursuant thereto shall be administered by
the full Board.
(ii) The Board shall have the authority and discretion to interpret and
administer the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan and to determine the terms and
provisions of any Award Agreement made pursuant to the Plan. All
questions of interpretation with respect to the Plan, the benefits
established herein, the number of shares of Stock, or other
security, or rights granted and the terms of any agreements
evidencing any of the Director Fees (the "Award Agreements"),
including the timing, pricing, and amounts of Awards, shall be
determined by the Board, and its determination shall be final and
conclusive upon all parties in interest. In the event of any
conflict between an Award Agreement and this Plan, the terms of this
Plan shall govern.
(iii) Except to the extent prohibited by applicable law or the applicable
rules of a stock exchange, the Board may delegate to the officers or
employees of the Company and its Subsidiaries the authority to
execute and deliver such instruments and documents, to do all such
acts and things, and to take all such other steps deemed necessary,
advisable or convenient for the effective administration of the Plan
in accordance with its terms and purpose, except that the Board may
not delegate any discretionary authority with respect to substantive
decisions or functions regarding the Plan or benefits and Awards
thereunder, including, but not limited to, decisions regarding the
timing, eligibility, pricing, amount or other material terms of such
benefits or Awards. Any such delegation may be revoked by the Board
at any time.
(iv) To the extent that the Board determines that the restrictions
imposed by the Plan preclude the achievement of the material
purposes of the benefit provided herein in jurisdictions outside the
United States, if applicable, the Board will have the authority and
discretion to modify those restrictions as the Board determines to
be necessary or appropriate to conform to applicable requirements or
practices of jurisdictions outside of the United States.
6.2 Limits of Liability.
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(i) Any liability of the Company to any Director with respect to an
Award shall be based solely upon contractual obligations created by
the Plan and the applicable Award Agreement.
(ii) Neither the Company, nor any member of the Board, nor any other
person participating in any determination of any question under the
Plan, or in the interpretation, administration or application of the
Plan, shall have any liability to any party for any action taken or
not taken in good faith under the Plan except as may be expressly
provided by statute.
6.3 Rights of Directors. Nothing contained in this Plan or in any Award
Agreement (or in any other documents related to this Plan or to any Award or
Award Agreement) shall confer upon any Director any right to continue in the
service of the Company or a Subsidiary, constitute any contract or limit in any
way the right of the Company or a Subsidiary to change such person's
compensation or other benefits or to terminate the service of such person with
or without cause or confer any right on the part of such person to be nominated
for reelection to the Board, to be reelected to the Board or to be appointed to
any committee of the Board.
6.4 Form and Time of Elections. Any election required or permitted under
the Plan shall be in writing, and shall be deemed to be filed when timely
delivered to the Company. Any election to defer Director Fees, as provided in
Section 9, shall be irrevocable after the commencement of the year for which it
is filed, and such election shall remain in effect with respect to any
subsequent years unless a new election with respect to such subsequent years is
filed in accordance with rules established by the Board, in which case such new
election shall be applicable with respect to such subsequent years.
6.5 Action by Company. Any action required or permitted to be taken by the
Company shall be by resolution of the Board, or by action of one or more members
of the Board (including a committee of the Board) who are duly authorized to act
for the Board or (except to the extent prohibited by the provisions of Rule
16b-3, applicable local law, the applicable rules of any stock exchange, or any
other applicable rules) by a duly authorized officer of the Company.
6.6 2000 Equity Incentive Plan. Any shares of Stock awarded to, or subject
to Awards granted to Directors under this Plan as Director Fees shall be issued
pursuant to the 2000 Equity Incentive Plan of Countrywide Financial Corporation
(the "2000 Plan") or any successor plan, subject to all of the terms and
conditions herein. Except in the event of conflict, all provisions of the 2000
Plan shall apply to this Plan. In the event of any conflict between the
provisions of the 2000 Plan and this Plan, this Plan shall control, provided
that the Director Fees granted herein may not exceed the share limitations set
forth in the 2000 Plan.
SECTION 7
MISCELLANEOUS
7.1 Beneficiaries. Each Director or former Director entitled to payment of
Director Fees hereunder, from time to time may name any person or persons (who
may be named contingently or successively) to whom any Director Fees earned by
him and payable to him are
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to be paid in case of his death before he or she receives any or all of such
Director Fees. Each designation will revoke all prior designations by the same
Director or former Director, shall be in form prescribed by the Company, and
will be effective only when filed by the Director or former Director in writing
with the Secretary of the Company during his lifetime. If a deceased Director or
former Director shall have failed to name a beneficiary in the manner provided
above, or if the beneficiary named by a deceased Director or former Director
dies before him or before payment of all the Director's or former Director's
Director Fees, the Company, in its discretion, may direct payment in a single
sum of any remaining Director Fees to either:
(i) any one or more or all of the next of kin (including the surviving
spouse) of the Director or former Director, and in such proportions
as the Company determines; or
(ii) the legal representative or representatives of the estate of the
last to die of the Director or former Director and his last
surviving beneficiary.
The person or persons to whom any deceased Director's or former Director's
Director Fees are payable under this paragraph will be referred to as his
"beneficiary."
7.2 Alienation of Rights. Payment of Director Fees will be made only to
the person entitled thereto in accordance with the terms of the Plan, and
Director Fees are not in any way subject to the debts or other obligations of
persons entitled thereto, and may not be voluntarily or involuntarily sold,
transferred or assigned. When a person entitled to a payment under the Plan, in
the Company's opinion, is in any way incapacitated so as to be unable to manage
his financial affairs, the Company may direct that payment be made to such
person's legal representative, or to a relative or friend of such person for his
benefit. Any payment made in accordance with the preceding sentence shall be in
complete discharge of the Company's obligation to make such payment under the
Plan.
7.3 Unfunded Plan. The Plan shall be unfunded. Neither the Company nor the
Board shall be required to segregate any assets that may at any time be
represented by benefits or Awards made pursuant to the Plan. Neither the Company
nor the Board shall be deemed to be a trustee of any amounts to be paid under
the Plan. Neither the Director nor any other person shall, by reason of
participation in the Plan, the deferral of shares of Stock or the deferral of a
cash payment, acquire any right in or title to any assets, funds or property of
the Company whatsoever prior to the date such shares of Stock or cash are
distributed. A Director shall have only a contractual right to the shares of
Stock and cash, if any, distributable under the Plan, unsecured by any assets of
the Company. Nothing contained in the Plan shall constitute a guarantee by the
Company that the assets of the Company shall be sufficient to provide any
benefits to any person. The Company may, but shall not be obligated to,
establish a trust to hold assets for the purpose of satisfying obligations under
this Plan.
7.4 Adjustment Provisions. In the event of a corporate transaction
involving the Company (including, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), in
addition to any adjustments made pursuant to Section 8 of the 2000
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Plan, the Board may make equitable adjustments to the Director Fees (including
Deferred Fees) to preserve the benefits or potential benefits of participation
in the Plan.
7.5 Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.
SECTION 8
AMENDMENT AND DISCONTINUANCE
The Board may, at any time, amend or terminate the Plan, and may amend any
Award Agreement, provided that no amendment or termination may, in the absence
of written consent to the change by the affected Director (or, if the Director
is not then living, the affected beneficiary), adversely affect the rights of
any Director or beneficiary under any Award granted under the Plan prior to the
date such amendment is adopted by the Board; and further provided, that
adjustments pursuant to paragraph 7.4 shall not be subject to the foregoing
limitations of this Section 8. Any amendment or discontinuance of the Plan shall
be prospective in operation only, and shall not affect the payment of any
Director Fees theretofore earned by any Director, or the conditions under which
any such fees are to be paid or forfeited under the Plan, unless the Director
affected shall expressly consent thereto.
SECTION 9
ELECTIVE DEFERRALS
9.1 DEFERRAL ELECTION
(i) General. A Director who is otherwise entitled to receive Director
Fees in the form of shares of Stock or a cash payment under the
terms of the Plan may elect to defer delivery of all or a portion of
such fees, subject to the following terms of this Section 9 (once
deferred, the "Deferred Fees").
(ii) Deferral Election. An election to defer the Director Fees into a
Cash Account and Stock Unit Account shall be filed prior to the
first day of the calendar year in which the cash would otherwise
have been delivered to the Director. The election to defer the
Director Fees shall be made on an election form as provided by the
Board (the "Deferral Election"). The Deferral Election form shall
provide for the types and amounts of the Director Fees to be
deferred and shall provide for the timing and method of distribution
at the end of the applicable deferral period.
(iii) Conversion of Cash or Stock to Stock Units. Deferred Fees credited
to a Stock Unit Account, as defined below, under this Section 9
shall be converted to Stock Units by dividing the cash-based
Director Fees so credited by the Fair Market Value of the Stock as
of the date such Director Fees would otherwise have been paid or
granted had the Director not made a Deferral Election. The Stock
Unit Account will be credited with Stock Units equal to the number
of shares of Restricted Stock as to which the Director has elected
deferred receipt, with such
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Stock Units to be credited as of the date on which the shares of
Stock would otherwise have been delivered to him in the absence of
the deferral. To the extent that Stock Units are credited to the
Director's Stock Unit Account with respect to the deferral of a
Restricted Stock Award, such Stock Units shall have the same
restrictions and vesting provisions as were applicable to the
Restricted Stock Award.
9.2 ACCOUNTS
(i) Stock Unit Accounts. A "Stock Unit Account" shall be maintained on
behalf of each Director who elects to defer all or a portion of his
Director Fees under this Section 9, for the period during which
delivery of such fees is deferred. A separate Stock Unit Account
shall be established for each calendar year in which the Director
elects to have all or a portion of the Director Fees deferred. A
Director's Stock Unit Account(s) shall be subject to the following
adjustments:
(a) The Stock Unit Account will be credited with Stock Units, with
such Stock Units to be credited as of the date on which the
Director Fees would otherwise have been delivered to him in
the absence of the deferral.
(b) As of each dividend payment date for the Stock following the
date any Stock Units are credited to the Director's Stock Unit
Account, and prior to the date of distribution with respect to
those Stock Units, the Director's Stock Unit Account shall be
credited with additional Stock Units (including fractional
Stock Units) equal to (i) the amount of the dividend that
would be payable with respect to the number of shares of Stock
equal to the number of Stock Units credited to the Director's
Stock Unit Account on the dividend record date, divided by
(ii) the Fair Market Value of a share of Stock on
the date of payment of the dividend.
(c) As of the date of any distribution with respect to a
Director's Stock Unit Account under Section 9.3, the Stock
Units credited to a Director's Stock Unit Account shall be
reduced by the amounts distributed to the Director.
(ii) Cash Account. A Cash Account shall be maintained on behalf of each
Director who elects to defer the distribution of cash-based Director
Fees provided herein, for the period during which delivery of cash
is deferred. A Director's Cash Account shall be credited with a
notional rate of return based upon investment(s) selected by the
Board in its sole discretion, and reflected on the Deferral Election
Form. As of the date of any distribution with respect to a
Director's Cash Account under Section 9.3, the balance credited to a
Director's Cash Account shall be reduced by the amount of the
distribution to the Director.
(iii) Statement of Accounts. As soon as practicable after the end of each
Year, the Company shall provide each Director having a Stock Unit
Account or Cash Account under the Plan with a statement of the
transactions in such Accounts during that year and the Account
balances as of the end of the year.
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9.3 DISTRIBUTIONS
(i) General. Subject to the terms of this Section 9.3, a Director shall
specify, as part of his Deferral Election with respect to Deferred
Fees, the time and manner of the distribution of the amounts
deferred pursuant to such election; provided that the distribution
date for the Director's Stock Unit Account and Cash Account may
differ. In the event that no election is made with respect to the
timing or method of distribution as of the date of the Director's
termination, the Director's entire Stock Unit Account and Cash
Account shall be distributed in a single lump sum as of the first
anniversary the Director's date of termination.
(ii) At the time of distribution of the Stock Unit Account, shares in
accordance with the Director's Deferral Election, the Director shall
receive a distribution of shares of Stock equal to the number of
Stock Units in his Stock Unit Account subject to distribution. If
the scheduled distribution date would otherwise occur after a
dividend record date but before the payment of the dividend,
distribution may, in the Board's discretion, be deferred (not more
than 30 days) until the dividend is paid.
(iii) At the time of distribution of the Cash Account in accordance with
the Director's Deferral Election, the Director shall receive a cash
payment equal to the amount in his Cash Account then subject to
distribution.
(iv) In determining a Director's right to distributions under this
Section 9.3, the vesting provisions of section 4 or 5 of the Plan
shall apply to the Stock Units credited to the Director's Stock Unit
Account as though each unit represented one share of Stock, and with
all units attributable to payment of dividends being fully vested as
of the date they are credited to the Director's Stock Unit Account.
(v) Termination of Deferral by Company. The Board shall retain the right
to terminate, at any time, for any reason, or no reason, the
deferral provisions under this Section 9 (which may, but need not,
be in conjunction with a termination of the Plan), and shall
immediately distribute all, but not less than all, of the Stock Unit
Accounts and Cash Accounts as of the date of such termination. In
the event that the Board terminates the Plan pursuant to the
foregoing, the Restricted Period with respect to all unvested
Restricted Stock Units shall immediately lapse and the Director
shall become fully vested in such Stock Units.
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IN WITNESS WHEREOF, the Company has caused this Director Fee Plan to be
executed by its duly authorized officer this 29th day of September, 2005
Countrywide Financial Corporation
By: /s/ Leora Goren
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Leora Goren
Senior Managing Director, Chief
Human Resources Officer
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