[LOGO] INDYMAC BANCORP, INC.
March 13, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
IndyMac Bancorp, Inc. ("IndyMac"). The meeting will be held on April 24, 2002 at
9:00 a.m. at IndyMac's offices located at 3465 East Foothill Boulevard,
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
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David S. Loeb
CHAIRMAN OF THE BOARD
INDYMAC BANCORP, INC.
155 NORTH LAKE AVENUE
PASADENA, CALIFORNIA 91101
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 2002
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To the Stockholders of INDYMAC BANCORP, INC.:
If you plan to attend the Annual Meeting, please notify the undersigned at
the address set forth above so that appropriate preparations can be made. Notice
is hereby given that the Annual Meeting of Stockholders (the "Annual Meeting")
of IndyMac Bancorp, Inc. ("IndyMac") will be held at IndyMac's offices located
at 3465 East Foothill Boulevard, Pasadena, California on April 24, 2002 at 9:00
a.m., local time, for the following purposes:
1. To elect the Board of Directors for the ensuing year;
2. To approve the IndyMac Bancorp, Inc. 2002 Incentive Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Each of the proposals described above is more fully described in the
accompanying Proxy Statement, which forms a part of this Notice. If the IndyMac
Bancorp, Inc. 2002 Incentive Plan is not approved by stockholders, the
employment agreement that IndyMac recently entered into with Michael W. Perry,
IndyMac's Chief Executive Officer, may be terminated by Mr. Perry and his prior
employment agreement would thereupon be reinstated for its one-year remaining
term. See "Executive Compensation-Employment Agreements-Chief Executive Officer"
herein.
The Board of Directors has fixed the close of business on February 25, 2002
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 located at 155 North Lake Avenue, Pasadena,
California 91101 commencing at least ten days before the Annual Meeting.
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
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Richard L. Sommers
EXECUTIVE VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
March 13, 2002
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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.
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INDYMAC BANCORP, INC.
155 NORTH LAKE AVENUE
PASADENA, CALIFORNIA 91101
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 2002
This Proxy Statement is furnished to stockholders of IndyMac Bancorp, Inc.
("IndyMac") in connection with the solicitation by the Board of Directors of
IndyMac of proxies to be voted at the 2002 Annual Meeting of Stockholders (the
"Annual Meeting") to be held at IndyMac's offices located at 3465 East Foothill
Boulevard, Pasadena, California on April 24, 2002, at 9:00 a.m. or at any
adjournment or postponement thereof. IndyMac expects to mail the proxy
solicitation materials for the Annual Meeting on or about March 13, 2002.
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 given 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 February 25,
2002 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, 60,191,134 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 as to which such persons have not received instructions from the
beneficial owners 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 determiningapproval 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 Bancorp, Inc. 2002 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 vote on the proposal. Accordingly, broker non-votes will
have no legal effect with respect to Proposal One and Proposal Two described
herein.
RECEIVE YOUR ANNUAL REPORT AND
PROXY STATEMENT ON-LINE NEXT YEAR
You can save IndyMac future postage and printing expense by consenting to
receive future annual reports and proxy statements on-line on the Internet.
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 this means of
delivery to you.
If you consent, your account will be so noted and, when IndyMac's 2002
Annual Report and the Proxy Statement for the 2003 Annual Meeting of
Stockholders become available, you will be notified on how to access them on the
Internet.
Stockholders who elected last year to receive their IndyMac materials via
the Internet this year will be notified of the Internet location of the
materials at the same time the materials are distributed to all other IndyMac
stockholders.
If you elect to receive your IndyMac materials via the Internet, you can
still request paper copies by contacting Investor Relations at IndyMac Bancorp,
Inc., 155 N. Lake Avenue, P.O. Box 7211, Pasadena, California 91109-7137.
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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 11, 2002, (1) the number of shares of Common Stock
so owned, and (2) the percentage of all shares outstanding represented by such
ownership (based upon the most recently reported 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) . . . . . . 6,713,000 11%
Capital Guardian Trust Company
11100 Santa Monica Boulevard
Los Angeles, California 90025
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(1) Based upon Amendment No. 4 to Schedule 13G filed February 11, 2002 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 6,052,300 shares beneficially
owned by Capital Guardian are included in those shown as beneficially owned
by Capital Group. Capital Group reports that it has no investment or voting
power with respect to any of the shares shown and that investment, and in
some cases voting, power with respect to the 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 6,052,300 shares as a result of its service as
investment manager of various institutional accounts. It reports that it
has sole investment and, in some cases, voting power with respect to the
shares beneficially owned by it.
ELECTION OF DIRECTORS
IndyMac has eight directors. The eight 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.
DIRECTOR NOMINEES
The following persons have been nominated to serve as directors of IndyMac
for the ensuing year:
DAVID S. LOEB, age 78, 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 Chairman of the Board of
Directors of IndyMac Bank, F.S.B., a wholly owned subsidiary of IndyMac
("IndyMac Bank"). Mr. Loeb was a co-founder of Countrywide Credit Industries,
Inc. ("CCI"), a former affiliate of IndyMac, and was President of CCI from its
formation in March 1969 to February 2000. He 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, until February 2000.
MICHAEL W. PERRY, age 39, is Chief Executive Officer and Vice Chairman of
the Board of Directors of IndyMac and IndyMac Bank, and he has been a director
of IndyMac since October 1997. Mr. Perry has been with IndyMac since January
1993 and previously served as President of IndyMac from January 1997 to February
1999, and Chief Operating Officer from January 1993 to January 1997. Mr. Perry
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 75, has been a director of IndyMac since January 1993.
He is also a director of IndyMac Bank. Mr. Gramley is a former member of the
Board of Governors of the Federal Reserve System. Since
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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 also has 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.
HUGH M. GRANT, age 65, became a director of IndyMac in May 2000. He is also
adirector of IndyMac Bank. Since 1996, Mr. Grant has been a business consultant.
Prior to 1996, he spent approximately 38 years with Ernst & Young (Arthur Young
& Company before its 1989 merger with Ernst & Whinney) where, among other
things, he was Vice-Chairman and Regional Managing Partner-Western United
States. Mr. Grant serves on the Board of Directors and as Chairman of the Audit
Committee of Inglewood Park Cemetery. He also served on the Board of Directors
and as Chairman of the Audit Committee of the Santa Barbara Group of Mutual
Funds.
PATRICK C. HADEN, age 49, became a director of IndyMac in March 2000. He is also
a director of IndyMac Bank. Mr. Haden 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., Elkay Plastics Co., Inc., Financial
Pacific Insurance Group, Inc. and Bradshaw International, Inc. He serves on the
Compensation Committee and the Audit Committee of the Board of Directors of
Tetra Tech, Inc. Mr. Haden graduated Magna Cum Laude, Phi Beta Kappa from the
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.
ROBERT L. HUNT II age 51, became a director of IndyMac in November 2001. Mr.
Hunt is also a director of IndyMac Bank. Mr. Hunt held the position of President
and Chief Operating Officer of Coast Savings Financial, Inc. and its subsidiary,
Coast Federal Bank, from 1991 to 1998 when Coast was acquired by H.F. Ahmanson &
Co., the holding company for Home Savings of America. Mr. Hunt is currently a
trustee for the Coast Federal Contingent Payments Right Litigation Trust, the
publicly traded entity that was spun off by Coast Federal at the time of its
acquisition. He served as Chief Financial Officer and Executive Vice President
of Coast Federal Bank from 1983 to 1991. Prior to his service at Coast Federal
Bank, Mr. Hunt held the position of Vice President and Controller of Fidelity
Federal Savings and Loan from 1980 to 1983 and was an audit manager at the
public accounting firm of KPMG Peat Marwick where he served from 1972 to 1980.
Mr. Hunt is a graduate of the University of Southern California.
FREDERICK J. NAPOLITANO, age 72, 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 is
also a director of IndyMac Bank. Mr. Napolitano 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.
JAMES R. UKROPINA, age 64, became a director of IndyMac in February 2001. He is
also a director of IndyMac Bank. Since February 2001, Mr. Ukropina has been Of
Counsel to O'Melveny & Myers LLP, and prior to that date he served as a senior
partner with the law firm since 1992. He serves on the Board of Directors of
Lockheed Martin Corporation, Pacific Life Insurance Company, Central Natural
Resources Corporation and The TCW Group, Inc. He also serves on the Audit
Committee and the Ethics and Nominating Committee of the Board of Directors of
Lockheed Martin Corporation. Mr. Ukropina previously served on the Board of
Directors of Security Pacific Corporation, Santa Fe International Corporation,
Miller's Outpost, Stanford University, the California Chamber of Commerce, the
California Business Roundtable, Occidental College, Executive Service Corps of
Southern California, the Advisory Council of the Stanford Graduate School of
Business, KCET, a public television station in Los Angeles, and the California
Economic Development Corporation. Mr. Ukropina received his A.B. degree in 1959
from Stanford University and his M.B.A. in 1961 from the Stanford Graduate
School of Business Administration. In 1965, he received his L.L.B. from the
University of Southern California Law School where he was Editor-in- Chief of
the Southern California Law Review.
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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 the 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 six meetings, in person or by telephone, during
2001.
The Audit Committee of the Board of Directors acts pursuant to a written
charter, which the Board of Directors initially adopted on May 23, 2000 and
amended in October 2000 and January 2001. A copy of the Audit Committee Charter
is attached hereto as Appendix A. In the opinion of the Board of Directors of
IndyMac, all current members of the Audit Committee are independent directors
within the meaning of Section 303 of the Listed Company Manual of the New York
Stock Exchange. The committee held five meetings in 2001. The committee consists
of Messrs. Grant, Hunt and Ukropina. Mr. Napolitano served on this committee
until February 5, 2001 when he was replaced by Mr. Ukropina. Mr. Kearns served
on this committee until January 21, 2002 when his retirement from the Board of
Directors became effective. Mr. Hunt joined this committee on November 20, 2001.
The chairman of the committee is Mr. Grant.
The Management Development and Compensation Committee ("Compensation
Committee") of the Board of Directors administers IndyMac's Stock Incentive Plan
as well as the Deferred Compensation Plan, the Amended and Restated Loan Plan
and the Defined Benefit Pension Plan, and reviews the compensation of IndyMac's
executive officers. The committee held 16 meetings in 2001, with all but four of
the meetings being special meetings held in connection with the renegotiation of
the employment agreement with IndyMac's Chief Executive Officer. See "Executive
Compensation-Employment Agreements" and "Executive Compensation-Compensation
Committee Report on Executive Compensation." The committee consists of Messrs.
Napolitano, Haden and Ukropina, each of whom is a non-employee director of
IndyMac. Mr. Ukropina joined this committee on July 18, 2001. The chairman of
the committee is Mr. Napolitano.
The Asset and Liability Committee of the Board of Directors oversees the
management of IndyMac's overall interest rate, credit and liquidity risk. The
committee held four meetings in 2001. The committee consists of Messrs. Gramley,
Loeb and Perry. The chairman of the committee is Mr. Gramley.
The Nominating and Governance Committee of the Board of Directors reviews
and recommends to the Board of Directors, among other things, Board membership
criteria, nominees for election as directors at the Annual Meeting of
Stockholders, committees of the Board and matters relating to the performance
and compensation of Board members. The committee, which was established in
October 2001, held one meeting in 2001. The Guidelines for Corporate Governance
Issues, which sets forth the general corporate governance policies and
procedures of IndyMac's Board of Directors, including the specific
responsibilities of the committee, has been filed as an Exhibit to IndyMac's
Annual Report on Form 10-K for the year ended December 31, 2001. The committee
consists of Messrs. Napolitano, Grant, Haden and Ukropina. The chairman of the
committee is Mr. Napolitano.
DIRECTOR COMPENSATION
During 2001, each director who was not an employee of IndyMac received (i)
an annual retainer fee of $50,000 (or pro rata amounts in the case of Messrs.
Ukropina and Hunt, who were appointed to the Board of Directors in February 2001
and November 2001, respectively), (ii) a $2,500 committee meeting fee ($5,000
for the committee chairman) for attendance at committee meetings, and (iii)
reimbursement for expenses related to attending meetings. On February 5, 2001,
each outside director (other than Mr. Hunt) received a grant of stock options
covering 15,544 shares of Common Stock, with an exercise price of $24.4150 per
share. Mr. Hunt received a grant of stock options covering 7,772 shares of
Common Stock on November 20, 2001, with an exercise price of $22.0350, which is
a pro-rated number of stock options since Mr. Hunt joined the IndyMac Board of
Directors more than six months following the annual grant of stock options. All
of the foregoing options become exercisable one year after the applicable grant
date. Directors of IndyMac are eligible to participate in IndyMac's Deferred
Compensation Plan,
5
which allows directors to defer all or a portion of their annual retainer and
committee meeting fees. The Deferred Compensation Plan requires the deferral of
an annual minimum amount of $2,000 for a number of years designated by each
participating director, subject to a minimum deferral period of five years, with
IndyMac matching a percentage of the deferral. For fiscal year 2001, the
Deferred Compensation Plan provided a return of 11%. During 2001, Messrs.
Gramley and Haden deferred $70,000 and $3,600, respectively, of their annual
retainer and committee fees, and IndyMac contributed $2,800 and $1,800 to their
respective deferred compensation accounts as matching funds.
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. Thomas J. Kearns, who
retired from the Board of Directors effective January 21, 2002, currently
participates in the Director Emeritus program. He will receive an annual
retirement benefit of $42,000 for the remainder of his life. In addition to this
benefit under the Director Emeritus program, Mr. Kearns will receive an
additional $20,000 on each of the first and second anniversary dates of his
retirement for specific consulting services he has agreed to provide IndyMac.
The retirement age requirement for this program was waived for Mr. Kearns in
recognition of his service as a director of IndyMac for over 10 years.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of Common Stock by each director nominee, IndyMac's Chief
Executive Officer and each of IndyMac's other four most highly compensated
executive officers, and all executive officers and directors as a group, as of
December 31, 2001. Except as otherwise indicated, all persons listed below have
sole voting power and dispositive power with respect to their shares, except to
the extent that authority is shared by their spouses, and have record and
beneficial ownership with respect to their shares. The shares and percentages
set forth below include shares of Common Stock that were outstanding or issuable
within 60 days upon the exercise of options outstanding as of December 31, 2001.
SHARES OF COMMON
STOCK OWNED PERCENT
NAME BENEFICIALLY(1) OF CLASS
---- ----------------- --------
David S. Loeb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352,502 *
Michael W. Perry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,211,131(2) 2.0%
Lyle E. Gramley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,078(3) *
Hugh M. Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,544 *
Patrick C. Haden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,459(4) *
Robert L. Hunt II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - *
Frederick J. Napolitano . . . . . . . . . . . . . . . . . . . . . . . . . . 240,705(5) *
James R. Ukropina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,544 *
Richard H. Wohl. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461,031(6) *
S. Blair Abernathy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,327(7) *
Carmella L. Grahn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133,048(8) *
All directors and executive officers as a group (12 persons) . . . . . . . . 2,892,198 4.79%
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* Less than one percent of class.
(1) Includes shares that may be purchased through stock options currently
exercisable or exercisable within 60 days of December 31, 2001 held by the
following persons: Mr. Loeb, 225,000 shares; Mr. Perry, 1,081,096 shares;
Mr. Gramley, 55,544 shares; Mr. Grant, 35,544 shares; Mr. Haden, 35,544;
Mr. Napolitano, 91,107 shares; Mr. Ukropina, 15,544 shares; Mr. Wohl,
429,586 shares; Mr. Abernathy, 125,831 shares; Ms. Grahn 107,717 shares;
all directors and executive officers as a group, 2,299,179 shares.
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(2) Includes 1,315 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 5,075 shares owned by Cindy Haden, the wife of Mr. Haden.
(5) Includes 10,000 shares owned by a limited liability company in which Mr.
Napolitano has a 1% ownership interest. Mr. Napolitano disclaims beneficial
ownership of these securities except to the extent of his ownership
interest in the limited liability company.
(6) Includes 268 shares held in Mr. Wohl's 401(k) account.
(7) Includes 975 shares held in Mr. Abernathy's 401(k) account.
(8) Includes 1,086 shares held in Ms. Grahn's 401(k) account.
EXECUTIVE OFFICERS
The executive officers of IndyMac are:
OFFICER
NAME AGE OFFICE SINCE
- ---- --- ------ -------
David S. Loeb . . . . . . . . . . 78 Chairman of IndyMac and IndyMac Bank 1985
Michael W. Perry . . . . . . . . 39 Chief Executive Officer of IndyMac and IndyMac Bank 1993
Richard H. Wohl . . . . . . . . . 43 Senior Executive Vice President of IndyMac Bank; 1994
President and Chief Operating Officer of IndyMac
Bank's Mortgage Banking Group
S. Blair Abernathy. . . . . . . . 40 Executive Vice President, Capital Markets of 1994
IndyMac Bank's Mortgage Banking Group
Carmella L. Grahn . . . . . . . . 38 Executive Vice President and Chief Financial Officer 1993
of IndyMac and IndyMac Bank
A. Scott Keys . . . . . . . . . . 39 Executive Vice President and Chief Financial Officer 2002
of IndyMac and IndyMac Bank
(effective March 11, 2002)
Roger H. Molvar . . . . . . . . . 46 Executive Vice President and Chief Administrative 2000
Officer of IndyMac and IndyMac Bank
Biographical information with respect to Messrs. Loeb and Perry is set
forth above under "Election of Directors -Director Nominees."
RICHARD H. WOHL is Senior Executive Vice President of IndyMac Bank and the
President and Chief Operating Officer of IndyMac Bank's Mortgage Banking Group.
Mr. Wohl is responsible for IndyMac Bank's mortgage banking business and each of
its customer channels, products and key support functions, such as consumer
lending technology and secondary marketing. Mr. Wohl 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 various
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 Executive Vice President, Capital Markets of IndyMac
Bank's Mortgage Banking Group. Mr. Abernathy is responsible for the hedging,
trading, product development, risk-based pricing and secondary market functions
of IndyMac Bank. 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.
7
CARMELLA L. GRAHN was Executive Vice President and Chief Financial Officer
of IndyMac and IndyMac Bank through March 8, 2002. As Chief Financial Officer,
Ms. Grahn was responsible for accounting, tax, and financial planning, analysis
and reporting. Ms. Grahn is now managing key financial projects for IndyMac,
including an information technology project relating to the financial accounting
and reporting functions of IndyMac and IndyMac Bank. 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.
A. SCOTT KEYS is Executive Vice President and Chief Financial Officer of
IndyMac and IndyMac Bank. Mr. Keys is responsible for accounting, tax, and
financial planning, analysis and reporting. Prior to joining IndyMac in March
2002, Mr. Keys was a partner with Ernst & Young LLP in its Columbus, Ohio
office. He most recently served as the partner in charge of the Ohio Valley
Banking Practice for Ernst & Young LLP, serving a number of regional banking
companies and large mortgage companies. Prior to becoming a partner with Ernst &
Young LLP in October 1999, Mr. Keys held various professional staff positions
with the firm in its Columbus, Ohio and Los Angeles, California offices
beginning in September 1986. Mr. Keys is a Certified Public Accountant and
received a B.S. in accounting from Loyola Marymount University in Los Angeles,
California.
ROGER H. MOLVAR is Executive Vice President and Chief Administrative
Officer of IndyMac and IndyMac Bank. Mr. Molvar has management responsibility
for finance and administrative functions, including Corporate Finance, Treasury,
Acquisitions,Venture Capital Investments, Investor and Media Relations and
Strategic Planning. Prior to joining IndyMac in July 2000, among other
responsibilities, he was Senior Vice President and Management Committee member
of The Times Mirror Company, Senior Vice President & Comptroller, First
Interstate Bank, Chief Financial Officer, Helionetics, Inc. and a senior manager
at Arthur Andersen. Mr. Molvar chairs the Executive Committee of the SEC and
Financial Reporting Institute-University of Southern California, having
previously served as a member of the Accounting Standards Executive Committee
(AcSEC) and its Business Combinations Task Force (1995 to 1998). He is a past
member of the Financial Executives Institute's Advisory Committee on the use of
Internet/Intranet Technologies and was Chairman of the FASB's Working Group on
the delivery of financial information to investors via web-enabled strategies.
His affiliations include the American Institute of Certified Public Accountants,
where he recently completed duties on the Professional Ethics Executive
Committee (the profession's standards enforcement arm). Mr. Molvar received his
undergraduate degree in business administration from the University of
Washington. He is an honors graduate of the Graduate School of Financial
Management-Dartmouth and the Stanford University Advanced Management College.
EXECUTIVE COMPENSATION
The following table sets forth the cash and other compensation paid by
IndyMac and its subsidiaries to the named executive officers of IndyMac for all
services in all capacities during the years indicated.
8
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
----------------------------
RESTRICTED SECURITIES
ANNUAL COMPENSATION STOCK UNDERLYING
NAME AND PRINCIPAL ---------------------- OTHER ANNUAL AWARD OPTIONS ALL OTHER
POSITION(S) DURING 2001 YEAR SALARY(1) BONUS(1) COMPENSATION ($) (#) COMPENSATION(2)
- ----------------------- ---- --------- ---------- ------------ ---------- ---------- ---------------
David S. Loeb (3). . . . . . . 2001 $687,500 $ - $ - - 500,000 $ -
Chairman of the Board 2000 550,000 - - - 125,000 -
1999 550,000 - - - 250,000 -
Michael W. Perry(4). . . . . . 2001 830,821 1,000,000 68,793(5) - 1,000,000 116,536
Chief Executive Officer 2000 754,646 - 87,936 - 1,000,000 91,245
1999 695,750 945,000 - 249,999 250,000 21,502
Richard H. Wohl. . . . . . . . 2001 491,293 200,000 6,024(6) - 500,000 59,536
Senior Executive Vice 2000 441,667 185,638 - - 500,000 91,842
President, IndyMac Bank 1999 350,000 450,000 - 100,002 100,000 53,639
S. Blair Abernathy . . . . . . 2001 287,605 150,000 8,798(6) - 250,000 37,301
Executive Vice 2000 231,094 320,998 - - 37,500 34,826
President, IndyMac Bank 1999 225,000 250,000 - 49,996 50,000 4,800
Carmella L. Grahn . . . . . . 2001 225,038 230,000 955(6) - 15,410 45,511
Chief Financial Officer 2000 211,854 214,564 - - 37,500 25,100
1999 189,750 175,000 - 49,996 50,000 33,873
- --------------
(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. Amounts shown for 2001 Salary include the following:
(i) Mr. Perry: imputed income of $1,116 relating to club dues; and (ii) Mr.
Abernathy: $23,238 for retroactive pay for 2000.
(2) Amounts shown for 2001 consist of the following: (i) Mr. Perry:
split-dollar life insurance premiums paid by IndyMac-$38,250; IndyMac
contribution to 401(k) Plan-$5,100; IndyMac contribution to deferred
compensation account-$73,186; (ii) Mr. Wohl: IndyMac contribution to 401(k)
Plan-$5,100; IndyMac contribution to deferred compensation account-$27,075;
forgiveness of loan-$27,361 (iii) Mr. Abernathy: IndyMac contribution to
401(k) Plan-$5,100; IndyMac contribution to deferred compensation
account-$24,607; forgiveness of loan-$7,594 (iv) Ms. Grahn: IndyMac
contribution to 401(k) Plan-$5,100; IndyMac contribution to deferred
compensation account-$17,580; forgiveness of loan-$22,831.
(3) Mr. Loeb is a director and executive officer of IndyMac. The amount of
salary for 2000 and 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."
(4) Mr. Perry is 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."
(5) Includes: $13,200 for car allowance; $10,093 for financial and tax
planning; $25,867 for club dues; and $19,633 for interest accrued on
deferred compensation in excess of the applicable federal rate.
(6) Amounts shown consist of interest accrued on deferred compensation in
excess of the applicable federal rate.
STOCK OPTION PLANS
GENERAL. Stock options have been granted to directors and officers of
IndyMac and IndyMac Bank pursuant to IndyMac's 2000 Stock Incentive Plan (the
"2000 Plan"). Additional stock options were also granted to certain directors
and executive officers of IndyMac under the 1998 Stock Incentive Plan (the "1998
Plan"), which was terminated in connection with IndyMac's adoption of the 2000
Plan, the 1996 Stock Incentive Plan (the "1996 Plan"), which was terminated in
connection with IndyMac's adoption of the 1998 Plan, and under the 1994 Stock
9
Incentive Plan (the "1994 Plan"), which was terminated in connection with
IndyMac's adoption of the 1996 Plan (the 2000 Plan, the 1994 Plan, the 1996 Plan
and the 1998 Plan are collectively referred to herein as the "Stock Option
Plans"). The termination of the 1998 Plan, the 1996 Plan and the 1994 Plan did
not affect the validity of stock options granted thereunder, some of which are
currently outstanding. The Stock Option Plans are administered by the
Compensation Committee of the Board of Directors.
STOCK OPTION GRANTS IN FISCAL YEAR 2001
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES IN PRICE ($/SHARE) EXPIRATION GRANT DATE
NAME (#)(1) FISCAL YEAR (2) DATE PRESENT VALUE(3)
- ---- ---------- ------------ --------------- ---------- ----------------
David S. Loeb . . . . . . . . . . 500,000 15.13% $24.4150 2/5/11 $4,006,900
Michael W. Perry. . . . . . . . . 1,000,000 30.27 24.4150 2/5/11 8,013,800
Richard H. Wohl . . . . . . . . . 500,000 15.13 24.4150 2/5/11 4,006,900
S. Blair Abernathy. . . . . . . . 250,000 7.57 24.4150 2/5/11 2,003,450
Carmella L. Grahn . . . . . . . . 15,410 0.47 24.4150 2/5/11 123,500
- --------------
(1) All stock options granted become immediately exercisable in the event of a
"Change in Control" as defined in the Stock Option Plans.
(2) The exercise price of $24.4150 is the average of the high and low sales
prices for the Common Stock, as published in the Western Edition of THE
WALL STREET JOURNAL, on the date of grant.
(3) The present value of the options as of the grant date was calculated using
a Black-Scholes single option-pricing model. The assumptions used for the
model were: expected volatility of 40%, risk-free interest rate of return
(approximately equal to the weighted average of the ten-year Treasury rate
on the grant date) of 5.17%, expected dividend yield of 0% and time to
exercise of 3 years. No discounting was done to account for
nontransferability or vesting. The actual value, if any, an option holder
may realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2001
AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FY-END (#) AT FY-END($)
ON VALUE -------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- ---------- ----------- ------------- ----------- -------------
David S. Loeb . . . 0 $ 0 125,000 500,000 $ 1,495,938 $ 0
Michael W. Perry . . 127,570 2,321,068 681,096 1,883,334 7,573,059 10,633,800
Richard H. Wohl . . 49,580 644,739 229,586 933,334 2,852,843 5,210,925
S. Blair Abernathy . 47,010 731,520 63,331 291,667 798,796 511,150
Carmella L. Grahn . 0 0 84,945 72,487 976,921 511,150
DELIVERY OF SHARES OF COMMON STOCK. Each recipient of stock options is
allowed to pay the exercise price of the stock options and/or any related
withholding taxes through the delivery of Common Stock owned by the recipient
for at least six months (or such other period required under applicable law) and
satisfying such other requirements as the Compensation Committee may specify
from time to time, having an aggregate fair market value (as defined in the 2000
Plan) that is equal to the amount of cash that would otherwise be required to
complete payment of the exercise price of the stock options and/or any related
withholding taxes. Each recipient of restricted stock is allowed to pay the
statutory withholding taxes due upon vesting through the delivery of a portion
of the vested
10
restricted stock having an aggregate fair market value (as defined in the 2000
Plan) that is equal to the amount of cash that would otherwise be required to
pay the statutory withholding taxes.
LOAN PLANS. The Board of Directors previously adopted two loan plans (the
"Prior Loan Plans") under which loans were 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, 1998, 1999 and 2000, the Board
of Directors amended and restated the Prior Loan Plans to provide financing for,
among other things, the exercise of stock options granted under the 1998 Plan
and the 2000 Plan (the "Amended and Restated Loan Plan"). The Amended and
Restated Loan Plan is administered by the Compensation Committee. Under the
Amended and Restated Loan Plan, officers, directors and employees are permitted
to obtain loans with principal amounts of up to (a) the purchase price required
to be paid to IndyMac upon the exercise of one or more stock options, plus any
applicable withholding taxes, (b) less any legally required margin amount, and
for loans to officers and employees, 25% of the fair market value of the
underlying Common Stock (as of the exercise date). Additionally, under the
Amended and Restated Loan Plan (1) quarterly mark-to-market margin calls are
required on loans with outstanding principal balances exceeding 90% of the fair
market value of the Common Stock pledged to secure the loan (as of the last
business day of each quarter), and (2) 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 Executive Vice President or Senior Vice President and $100,000 for all other
borrowers.
Loans may be for a period of five years, which term may be renewed at the
Compensation 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. Installments of principal and interest on
loans made under the Amended and Restated Loan Plan are due quarterly, and
dividends, if any, paid on the pledged Common 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, or no
dividends are paid for the quarter, the interest is due and payable immediately.
To the extent a quarterly dividend is insufficient to pay a quarterly
installment of principal, or no dividends are paid for the quarter, the
difference is payable upon the maturity of the loan. 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.
UNSECURED LOAN PROGRAM. 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 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.
LOAN MODIFICATION PROGRAMS. 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
11
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 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 Common Stock pledged in connection with the applicable loan at a
price equal to their fair market value on the Balloon Payment date.
RESTRICTED STOCK TAX WITHHOLDING LOAN PROGRAM. The Board of Directors also
has approved a loan program for officers of IndyMac and its affiliates who have
received restricted stock awards whereby recipients may elect to finance the
payment of taxes arising from the vesting of such 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 a
portion of the Common Stock underlying the vested restricted stock award and the
plan limits the principal balance of each loan to 75% of the fair market value
of the pledged Common 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 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 would be forgiven on December 31, 2000 and the remaining outstanding
balance plus accrued interest would be forgiven on December 31, 2001, provided
the participants are employed with IndyMac 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 table sets forth information as of December 31, 2001 relating
to loans made by IndyMac to certain executive officers and directors of IndyMac
under the Amended and Restated Loan Plan and the other loan programs described
above.
LOANS OUTSTANDING DURING FISCAL YEAR 2001
BALANCE AT
DECEMBER 31, HIGHEST BALANCE INTEREST
NAME LOANS OUTSTANDING(1) 2001 DURING 2001 RATE(2)
- ---- -------------------- ------------ --------------- --------
Lyle E. Gramley . . . . . . . . . . . . Note 1 $169,072 $254,057 0%
Note 2 247,912 360,712 0%
Note 3 3,272 9,548 0%
Richard H. Wohl . . . . . . . . . . . . Note 1 103,098 103,098 4.68%
- -----------
(1) Unless otherwise indicated, loans are secured by the pledge of 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.
DEFINED BENEFIT PENSION PLAN
The following table illustrates annual pension benefits under IndyMac's
Defined Benefit Pension Plan (the "Pension Plan") for participants retiring in
2001 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.
12
PENSION PLAN TABLE
YEARS OF SERVICE
FINAL AVERAGE -------------------------------------------------------------------
COMPENSATION(1) 5 10 15 20 25 30 35
- --------------- ------- ------- ------- ------- ------- ------- -------
$125,000 . . . . . . . . . . . . . $ 8,300 $16,500 $27,500 $38,500 $46,300 $54,100 $62,000
150,000 . . . . . . . . . . . . 10,100 20,300 33,700 47,200 56,900 66,600 76,300
175,000+ . . . . . . . . . . . . 10,900 21,800 36,200 50,700 61,200 71,600 82,100
- ------------
(1) As a result of a limitation under the Code that became effective January 1,
2000, annual compensation in excess of $170,000 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 $170,000
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. . . . . . . . . . . . . . . 3
Michael W. Perry . . . . . . . . . . . . . 9
Richard H. Wohl . . . . . . . . . . . . . 8
S. Blair Abernathy . . . . . . . . . . . . 8
Carmella L. Grahn . . . . . . . . . . . . 8
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 the 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
CHAIRMAN OF THE BOARD
Mr. Loeb entered into an employment agreement with IndyMac in December
1998. His employment agreement provides for the following: (1) an annual base
salary of $550,000, subject to annual review by the Board of Directors for
possible increase, (2) an annual grant of stock options and restricted Common
Stock as determined by the Compensation Committee of the Board of Directors, and
(3) 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 agreement),
or by Mr. Loeb for "Good Reason" (as defined in the agreement), including
voluntary termination within one year of a "Change in Control" (as defined in
the agreement), IndyMac is required to pay the following: (1) a $1,000,000
termination bonus, plus (2) an amount equal to (a) if such termination occurs in
2001, 2 times the Base Amount (as defined in the agreement), (b) if such
termination occurs in 2002, 1.5 times the Base Amount, and (c) if such
termination occurs in 2003, an amount equal to the Base Amount.
In February 2000, Mr. Loeb's employment agreement was amended (the "First
Amendment") to prohibit him from accepting any position with CCI, its
subsidiaries or affiliates, with the exception of part-time employment.
Beginning with fiscal year 2000, the First Amendment also provides that Mr. Loeb
will receive an annual grant of stock options to purchase 125,000 shares of
Common Stock. In February 2001, Mr. Loeb's employment agreement was amended (the
"Second Amendment") to increase his annual base salary to $700,000 and to
provide for an annual review of his base salary to assess whether further annual
increases are appropriate. The Second Amendment also provides for a one-time
grant of stock options to purchase 500,000 shares of Common Stock in lieu of the
annual grant of stock options to purchase 125,000 shares of Common Stock
required during the remaining term of the employment agreement, which will
expire on December 31, 2003. The stock options, granted in February 2001, vest
in equal parts over a five-year period. The vesting will be accelerated if Mr.
Loeb's employment agreement is
13
not renewed or is terminated due to his earlier retirement or death. Mr. Loeb's
employment agreement will expire on December 31, 2003, unless earlier terminated
in accordance with the provisions thereof.
CHIEF EXECUTIVE OFFICER
Mr. Perry entered into a new employment agreement with IndyMac effective
from February 1, 2002 through December 31, 2006, subject to approval of
IndyMac's 2002 Incentive Plan by the stockholders (see more detailed discussion
below). The agreement provides that Mr. Perry will serve as Chief Executive
Officer and Vice Chairman of the Board of Directors of IndyMac and IndyMac Bank
and will become Chairman of the Board of IndyMac and IndyMac Bank when Mr. Loeb
ceases to serve in those positions. Mr. Perry's annual base salary will be
$1,000,000, which may be increased in the discretion of the Compensation
Committee, and he will be eligible for annual incentive compensation of up to
100% of his base salary (which also is subject to approval of the IndyMac 2002
Incentive Plan by the stockholders), depending upon the attainment of financial
and strategic objectives established by the Compensation Committee after
consultation with Mr. Perry. For 2002, Mr. Perry's incentive compensation will
be based upon a financial matrix relating to IndyMac's earnings per share and
return on equity and the accomplishment of specific strategic criteria. The
deductibility of compensation in excess of $1 million is described below under
"Compensation Committee Report on Executive Compensation-Deductibility of
Compensation". Mr. Perry also will be entitled to participate in all
compensation and benefit plans that are made available to senior officers or
employees generally.
The following table indicates IndyMac's total returns since January 1993
when Mr. Perry joined IndyMac, compared to the S&P 500 and Dow Jones Industrial
Average for the same years.
------------------------------------------------------------------------
DOW JONES
INDUSTRIAL
TOTAL RETURNS INDYMAC S&P 500 AVERAGE
------------------------------------------------------------------------
PERIOD ENDED DECEMBER 31, 2001
One-year -21% -12% -5%
Three-year 36% -1% 5%
Five-year 8% 11% 11%
January 1, 1993 to December 31, 2001 26% 14% 16%
------------------------------------------------------------------------
Mr. Perry's new employment agreement provides that he will receive a
$5,000,000 credit to his account in IndyMac's non-qualified deferred
compensation plan, effective as of January 1, 2003, that will vest in four equal
annual installments (together with accrued interest) commencing December 31,
2003, or upon earlier termination of his employment, other than "for Cause" or
voluntary termination without "Good Reason", or upon a "Change in Control" of
IndyMac (each as defined in the employment agreement). This $5,000,000 credit
was provided under the new employment agreement as compensation to Mr. Perry for
a $5,000,000 payment that would have been payable to Mr. Perry on February 5,
2003 in the event of an expiration of his prior employment agreement with
IndyMac without the execution of a satisfactory new agreement.
Mr. Perry's new employment agreement provides that it may be terminated by
Mr. Perry, and his prior employment agreement will be reinstated, if IndyMac's
stockholders do not approve IndyMac's 2002 Incentive Plan at the 2002 Annual
Meeting. See "Proposal Two-Approval of the 2002 Incentive Plan" for a
description of this proposal. Mr. Perry's prior agreement terminates on February
5, 2003 and provides that if it is not renewed on terms mutually acceptable to
IndyMac and Mr. Perry, IndyMac will be required to make a payment to Mr. Perry
of $5,000,000 and all stock options and restricted stock granted to Mr. Perry
pursuant to that agreement or prior to its effective date will vest. As of the
date of this proxy statement, Mr. Perry held 1,400,000 stock options and 17,014
shares of restricted stock that had not yet vested and would become vested
pursuant to the foregoing provision. Mr. Perry would also be entitled to
continue to receive employee benefits under the agreement until the earlier of
the date that he commences other employment or the second anniversary of
termination.
14
Mr. Perry's new employment agreement provides that he will be granted
options to purchase 1,000,000 shares of Common Stock at an exercise price equal
to the fair market value of the Common Stock on the date of grant if IndyMac's
2002 Incentive Plan is approved by the stockholders at the 2002 Annual Meeting
of Stockholders. These options will have a ten-year term and will vest and
become exercisable over a five-year period in increments of 20%, or earlier in
certain events, including death, disability or termination of Mr. Perry's
employment by IndyMac without Cause or by Mr. Perry for Good Reason. Any
unvested options wouldvest and become exercisable one year after a Change in
Control of IndyMac if Mr. Perry remains employed by IndyMac at that date.
The new employment agreement also provides for the grant of
performance-based stock options for 500,000 shares of Common Stock at an
exercise price equal to the fair market value of the Common Stock on the date of
grant upon stockholder approval of IndyMac's 2002 Incentive Plan. These options
will have a ten-year term and will vest on the seventh anniversary of the date
of grant, or in increments upon the earlier attainment of specified share price
levels for the Common Stock. Upon a Change in Control of IndyMac, any of the
performance-based stock options that have not vested will either vest or be
forfeited, depending on whether the specified share price levels have been
attained.
Mr. Perry's new employment agreement provides that he will be entitled to a
severance payment equal to 2.5 times the total of his then current annual salary
and target incentive compensation if his employment is terminated by IndyMac
without Cause or if he resigns for Good Reason. Good Reason is defined in the
employment agreement as (1) a material diminution in Mr. Perry's position,
powers, reporting requirements, duties or responsibilities, (2) Mr. Perry not
being elected to the Board of Directors and to the position of Vice Chairman (or
Chairman of the Board when Mr. Loeb ceases to serve in that position), (3) Mr.
Perry being required to relocate his place of employment to a location more than
50 miles from IndyMac's current headquarters, or (4) any material breach of Mr.
Perry's employment agreement by IndyMac. In the event of any such termination,
all stock options held by Mr. Perry (other than performance-based stock options)
would vest and become exercisable for a period of twelve months, and he also
would be entitled to receive payment of a prorated portion of his annual
incentive bonus based on IndyMac's actual performance up to the date of
termination in the year in which the termination takes place, and to
continuation of health and welfare benefits for himself and his family for two
years or until he obtains similar benefits through new employment.
If there is a Change in Control of IndyMac and Mr. Perry is terminated
other than for Cause or resigns for Good Reason within two years thereafter, or
if Mr. Perry's employment is terminated in anticipation of a Change in Control
at the initiation of the acquiring party and without Cause, he will become
entitled to payment of an amount equal to three times his then current annual
salary and target annual bonus. In addition, all stock options held by him
(other than performance-based stock options) would vest and become exercisable
for a period of twelve months and he would be entitled to continuation of health
and welfare benefits for himself and his family for a period of three years or
until his earlier employment by another company. If Mr. Perry is employed by
IndyMac or its successor on the first anniversary of a Change in Control all
unvested options held by him, other than performance-based options, will vest
immediately at that date. Mr. Perry's employment agreement also provides that he
will be paid a gross-up amount sufficient to compensate for any enhanced excise,
income or payroll taxes payable by him as a result of the change in control
provisions of the agreement.
For one year following an early termination of his employment for any
reason other than death, Mr. Perry has agreed not to engage in any business,
whether as an employee, consultant, partner, principal, agent, representative,
or stockholder (with a 1% percent or greater interest) on behalf of or for a
competitor of IndyMac (which shall mean up to 15 corporations or business
entities that are competitors of IndyMac and identified by the Compensation
Committee from time to time). Additionally, during the term of Mr. Perry's
employment with IndyMac and for one year following an early termination of his
employment for any reason other than death or disability, Mr. Perry has
generally agreed not to solicit any customers or employees of IndyMac or its
subsidiaries. The consideration for the foregoing agreements of Mr. Perry is
IndyMac's agreement to continue to employ Mr. Perry and to provide compensation
and benefits pursuant to the new employment agreement, including the severance
compensation described above.
The terms of Mr. Perry's new employment agreement were approved by the
Compensation Committee of the Board of Directors and by the full Board of
Directors after consideration of advice from compensation consultants
15
and legal counsel retained by the Compensation Committee and the Board of
Directors. See "Compensation Committee Report on Executive Compensation" for a
further description of the factors taken into account in determining the
provisions of Mr. Perry's employment agreement.
Mr. Perry's new employment agreement has been filed as an Exhibit to
IndyMac's Annual Report on Form 10-K for the year ended December 31, 2001.
OTHER NAMED EXECUTIVE OFFICERS
Mr. Wohl executed a new employment agreement with IndyMac effective
February 4, 2000. Mr. Wohl's employment agreement provides for the following:
(1) an annual base salary of $450,000 subject to annual review by the
Compensation Committee for possible future increase; (2) annual incentive
compensation in an amount determined pursuant to an annual incentive plan; with
the maximum amount of any incentive compensation award set at $200,000 for
fiscal year 2000; (3) guaranteed minimum annual cash compensation in the amount
of $500,000, including Mr. Wohl's base salary and any incentive compensation;
and (4) a stock option grant of 500,000 shares of Common Stock on each of
February 4, 2000 and February 5, 2001. Stock options granted pursuant to Mr.
Wohl's employment agreement vest in equal parts on the first five anniversaries
of the grant dates. All stock options or restricted stock granted under prior
employment agreements are subject to the terms of Mr. Wohl's new employment
agreement, with the exception of the vesting schedules, which will not change.
Mr. Wohl's employment agreement expires February 5, 2003, unless earlier
terminated in accordance with the provisions thereof.
Mr. Abernathy executed a new employment agreement with IndyMac Bank
effective February 5, 2001 that is guaranteed by IndyMac. Mr. Abernathy's
agreement provides for the following: (1) an annual base salary of $275,000
commencing in February 2001, subject to annual review by the Chief Executive
Officer for possible future increase, (2) annual incentive compensation in an
amount determined pursuant to an annual incentive plan; with the maximum amount
of any incentive compensation award set at $150,000; (3) guaranteed minimum
annual cash compensation equal to 125% of base salary, including Mr. Abernathy's
base salary and any incentive compensation; and (4) a stock option grant of
250,000 shares of Common Stock on February 5, 2001. Stock options granted
pursuant to Mr. Abernathy's employment agreement vest in equal parts on the
first five anniversaries of the grant date. All stock options or restricted
stock granted under prior employment agreements are subject to the terms of Mr.
Abernathy's new employment agreement, with the exception of the vesting
schedules, which will not change. Mr. Abernathy's employment agreement expires
December 31, 2004, unless earlier terminated in accordance with the provisions
thereof.
In November 2000, Ms. Grahn executed a new employment agreement with
IndyMac Bank that is guaranteed by IndyMac. The employment agreement provides
for base compensation and incentive compensation, as well as other specified
benefits, including guaranteed minimum annual cash compensation equal to 125% of
base salary, including Ms. Grahn's base salary and any incentive compensation.
The employment agreement also provides for the annual grant of stock options
and/or restricted stock for such number of shares of Common Stock as the
Compensation Committee determines, taking into account Ms. Grahn's and IndyMac's
performance and competitive practices then prevailing regarding the granting of
stock awards. All stock options or restricted stock granted to Ms. Grahn under
prior employment agreements are subject to the terms of the new employment
agreement. Ms. Grahn's employment agreement will expire on December 31, 2003.
The employment agreements for Messrs. Wohl and Abernathy and Ms. Grahn
provide for incentive compensation each year ending during the term thereof in
the form of an annual cash bonus based on each officer's achievement of his/her
production, revenue, administrative and/or operational goals, with an additional
component of the incentive compensation based on an assessment of each officer's
managerial skills.
In consideration of an agreement not to compete with IndyMac for a period
of one year after termination of employment, IndyMac has agreed to continue to
employ Messrs. Wohl and Abernathy and Ms. Grahn, to provide the compensation and
benefits described in their respective employment agreements, and to provide
certain severance payments to Messrs. Wohl and Abernathy and Ms. Grahn upon
termination of employment for reasons other than for Cause for Mr. Wohl (as
defined in his employment agreement) or other than for Poor Performance or Cause
for Mr. Abernathy and Ms. Grahn (each as defined in their respective employment
agreements). Mr. Wohl's severance payment will equal the sum of (1) his annual
base salary through the last day of employment, (2) a single cash
16
payment equal to $1,500,000, and (3) the additional benefits described in his
employment agreement for one year following the date of termination. Mr.
Abernathy's and Ms. Grahn's severance payments will equal the sum of (1) each
officer's annual base salary through the last day of employment, (2) a single
cash payment equal to two times the guaranteed minimum annual compensation under
each officer's employment agreement, provided that if the termination occurs
within two years of a change in control, as declared by the Board of Directors,
and during the term of the officer's employment agreement, then the single cash
payment will be equal to two times the officer's total compensation (base salary
plus bonus) for the fiscal year preceding the date of termination, and (3) the
additional benefits described in the respective employment agreements for one
year following the date of termination. In the event that any of the severance
payments described above are subject to federal excise taxes, the payments will
include gross-up for any such excise taxes plus any excise, income or payroll
taxes owed on the payment of the gross-up for the excise taxes.
DEFERRED COMPENSATION PLAN
Directors and certain officers of IndyMac are eligible to participate in
IndyMac's Deferred Compensation Plan, which allows participants to defer all or
a portion of their annual compensation (retainer and committee meeting fees for
directors, and base salary and bonus for officers). The Deferred Compensation
Plan requires participants to defer an annual minimum amount of $2,000 for a
number of years designated by each participant, subject to a minimum deferral
period of five years, with IndyMac matching a percent of such deferral for
participants who have been with IndyMac for more than one year. Participants
vest in the IndyMac matching amount in 20% increments for each year of service
completed, with participants being fully vested after five years of service. For
fiscal year 2001, the Deferred Compensation Plan provided a return of 11%.
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
currently composed of Messrs. Napolitano, Haden and Ukropina, with Mr. Ukropina
joining the Compensation Committee in July 2001. Each of the foregoing directors
is a nonemployee director of IndyMac. IndyMac's executive compensation program
generally consists of three main components: (1) base compensation, (2) annual
cash incentive compensation, and (3) stock options to provide long-term
incentives for performance and to align executive officer and stockholder
interests.
The philosophy behind IndyMac's executive compensation program 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 assess 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 financial services companies.
COMPENSATION OF MESSRS. LOEB AND PERRY
During 2001, compensation for Messrs. Loeb and Perry was determined
pursuant to the terms of their respective employment agreements in effect for
2001. Mr. Loeb's employment agreement does not contemplate the payment of
incentive compensation and he did not receive any incentive compensation for
2001. Mr. Perry's employment agreement provides that the Compensation Committee,
in its discretion, may award Mr. Perry additional incentive compensation. In
June 2001, the Compensation Committee awarded Mr. Perry a $1,000,000 bonus in
recognition of Mr. Perry's strong leadership of IndyMac Bank during its
successful first year of operations following IndyMac's acquisition of the
thrift subsidiary. The Compensation Committee evaluated the payment of the
bonus, in addition to the other compensation, including stock incentive
compensation, paid to Mr. Perry pursuant to his employment agreement in effect
for 2001, in light of the compensation paid to chief executive officers of other
financial institutions of a similar size and financial condition as IndyMac
Bank.
17
COMPENSATION OF OTHER NAMED EXECUTIVE OFFICERS
Compensation for 2001 for Messrs. Wohl and Abernathy and Ms. Grahn was
determined pursuant to the terms of their respective employment agreements. Each
of the officers was awarded additional incentive compensation in accordance with
the terms of their respective employment agreements.
STOCK OPTIONS
In addition to reviewing the 2001 compensation arrangements of the
executive officers of IndyMac, the Compensation Committee awarded stock options
pursuant to IndyMac's stock incentive plan and the terms of the employment
agreements of the executive officers. Pursuant to the employment agreements of
Messrs. Loeb, Perry, Wohl and Abernathy, they received an annual grant of stock
options to purchase 500,000, 1,000,000, 500,000 and 250,000 shares of Common
Stock, respectively. Messrs. Loeb's, Perry's,Wohl's and Abernathy's stock
options vest in equal parts on the first five anniversaries of the grant date.
In accordance with the annual stock option grant terms of Ms. Grahn's
employment agreement, the Compensation Committee took into account her
performance and the performance of IndyMac in meeting earnings per share goals.
The Compensation Committee also established guidelines for the granting of stock
options at various officer levels. Pursuant to these guidelines, officers at the
Executive Vice President level, such as Ms. Grahn, were eligible for a grant of
stock options equal to 25 percent of total cash compensation for year 2000 (2000
Base Salary plus 2000 Bonus paid in 2001). Based upon the foregoing criteria,
Ms. Grahn received an annual grant of stock options to purchase 15,410 shares of
Common Stock. The stock options vest in equal parts on the first three
anniversaries of the grant date.
CONSIDERATION OF CHIEF EXECUTIVE OFFICER'S NEW EMPLOYMENT AGREEMENT
The Compensation Committee approved the terms of Mr. Perry's new employment
agreement and recommended approval of the new employment agreement by the full
Board of Directors, which was subsequently obtained. The Compensation Committee
and the Board of Directors retained the services of William M. Mercer, Inc.
("Mercer") and Latham & Watkins, compensation consultants and lawyers,
respectively, as independent advisors to advise the Compensation Committee and
the Board of Directors on the various compensation and legal issues related to
the new employment agreement and to negotiate the terms and conditions of the
new employment agreement with Mr. Perry and his legal counsel. Additionally,
regulatory counsel for IndyMac and IndyMac Bank reviewed the terms and
conditions of the new employment agreement with respect to compliance with
regulatory matters. The Compensation Committee held 12 meetings to discuss the
new employment agreement, with Mercer and Latham & Watkins participating in many
of these meetings.
The Compensation Committee's objectives with respect to the new employment
agreement were to, among other things, (1) provide a total compensation package
for Mr. Perry that is closely linked to the creation of value for stockholders
of IndyMac, (2) provide a total compensation and benefits package that is
competitive with the packages of chief executive officers in peer companies, (3)
recognize Mr. Perry's strong performance to date by providing a package that
rewards his continued service and performance, and (4) balance the need to
protect IndyMac and Mr. Perry in the event of termination, resignation, and
change in control. Mercer provided the Compensation Committee its opinion that
Mr. Perry's new employment agreement successfully achieves these objectives and
that, furthermore, the specific terms within the new employment agreement are
reasonable and justified.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Code limits the corporate deduction for cash
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 ("performancebased compensation"). Mr. Perry was the only
executive officer who received cash compensation in excess of $1 million in
2001. None of the cash compensation paid to Mr. Perry in 2001 qualified as
performance-based compensation, and the taxes paid by IndyMac with respect to
the non-deductibility of the cash compensation in excess of $1 million paid to
Mr. Perry in 2001 totaled approximately $185,000. However, under the terms of
Mr. Perry's
18
new employment agreement, the annual incentive compensation payable to Mr. Perry
will qualify as performancebased compensation, subject to approval of the
IndyMac 2002 Incentive Plan by the stockholders.
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
Frederick J. Napolitano, CHAIRMAN
Patrick C. Haden
James R. Ukropina (July 2001 to present)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
At various points during fiscal year 2001, Messrs, Haden, Napolitano and
Ukropina 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 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 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, when it was 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 is a major investor together with his family. CLCA is now a
division of IndyMac Bank and all of these loans formerly made by CLCA are now
held at IndyMac. Any additional loans made to builders secured by real property
purchased by such builders from Loeb Enterprises, LLC are made by IndyMac. Each
project is part of a master planned community, which 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 had made construction loans, Loeb Enterprises, LLC 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 the CLCA financing facility, although both the CLCA financing facility and
the second mortgage are paid down on a unit-by-unit basis. There are no
outstanding loans from IndyMac, CLCA or any other subsidiary of IndyMac to Mr.
Loeb.
In the case of each project previously financed by CLCA, the builder was
not affiliated with either IndyMac or Loeb Enterprises, LLC, the general risk
characteristics of the construction loan were comparable to those for similar
projects funded by CLCA, and the construction loan facility between CLCA and the
builder was negotiated at arms length on terms consistent with those of similar
loans made by CLCA to other unaffiliated builders. Moreover, each credit
facility was approved by the disinterested members of the Board of Directors of
IndyMac.
As of December 31, 2001, IndyMac had outstanding four construction loan
facilities to a builder secured by property originally purchased by the builder
from Loeb Enterprises, LLC, with total dollar commitments of $16.1 million, and
total loans outstanding of $3.3 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.
19
As of December 31, 2000, IndyMac foreclosed upon one of the construction
loan facilities previously extended by CLCA. The second mortgage held by Loeb
Enterprises, LLC totaling $734,600 was extinguished through the foreclosure
process. The property underlying the facility was sold from IndyMac's foreclosed
assets portfolio in 2001 to a party not affiliated with IndyMac or Loeb
Enterprises, LLC. IndyMac recouped all of the principal of the loan and $322,000
of the $430,000 accrued interest that was previously written off.
From time to time, certain directors and executive officers of IndyMac and
its affiliates and associates of such persons were indebted to IndyMac and its
affiliates as customers in connection with mortgage loans and other extensions
of credit by IndyMac and its affiliates. 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 directors and executive officers of IndyMac and its
affiliates 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 its affiliates are
entitled to receive certain discounts or waivers of fees or commissions for
certain products and services offered by IndyMac and its affiliates.
In October 1998, IndyMac extended a $100,000 second mortgage loan to Ms.
Grahn and her 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.
In March 2002, IndyMac extended a $150,000 second mortgage loan to Mr. Keys
and his spouse in connection with the purchase of a home. The loan bears an
interest rate of 9.625% and a term of 15 years. Pursuant to the terms of the
loan, no interest or principal is due unless Mr. Key'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 his employment by IndyMac
terminates prior to that time. The loan will be forgiven in its entirety if Mr.
Key's employment terminates and he is entitled to severance payments pursuant to
his employment agreement with IndyMac.
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 2001.
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.
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PROPOSAL TWO
APPROVAL OF THE 2002 INCENTIVE PLAN
At the Annual Meeting, stockholders will be asked to approve IndyMac's 2002
Stock Incentive Plan (the "2002 Plan" or the "Plan"), which authorizes up to
3,000,000 shares of IndyMac's Common Stock to be issued under the Plan, subject
to adjustment to reflect stock splits, mergers and other corporate events. The
Plan was adopted by the Board of Directors, subject to stockholder approval, on
January 23, 2002. The closing price of IndyMac's Common Stock on February 28,
2002 was $24.57.
The 2002 Plan will become effective immediately upon approval by the
stockholders and, if approved, will continue in effect until terminated by the
Board. No Awards may be granted under the Plan, however, after the tenyear
anniversary of the effective date, except for Awards granted pursuant to
commitments entered into prior to such ten-year anniversary. Any Awards that are
outstanding at the time the Plan is terminated will remain subject to the terms
of the Plan.
This summary of the material terms of the 2002 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. Stockholders may also obtain a
copy of the Plan without charge upon written request directed to: IndyMac
Bancorp, Inc., Attention: Investor Relations, 155 North Lake Avenue, P.O. Box
7137, Pasadena, CA 91109-7137 (telephone: (800) 669-2300).
DESCRIPTION OF PLAN
KEY CONSIDERATIONS
The following are key considerations relating to the 2002 Plan:
o Stock options granted under the Plan cannot be repriced without
stockholder approval.
o Stock options must be granted at not less than the fair market value
of IndyMac's Common Stock on the grant date.
o The number of stock awards (including restricted stock awards) and
stock units that may be granted under the Plan is limited to 10% of
the total number of shares of IndyMac's Common Stock authorized for
issuance under the Plan.
o Restricted stock awards and stock units must have a minimum 3-year
vesting period and stock options must have a minimum 1-year vesting
period.
o A committee of independent directors administers the Plan.
o The compensation of IndyMac's Chief Executive Officer is heavily based
on stock option compensation to closely align his interest with the
interests of IndyMac's stockholders.
OVERVIEW
The Plan provides for the grant of non-qualified and incentive stock
options, stock appreciation rights ("SARs"), bonus stock, stock units,
performance shares, performance units, restricted stock, restricted stock units
and cash incentive awards. The purpose of the 2002 Plan is to enable IndyMac and
its subsidiaries and affiliates to: (1) attract and retain persons eligible to
participate in the Plan; (2) motivate participants to achieve IndyMac's
long-range goals by providing incentive compensation opportunities that are
competitive with those of other similar companies; and (3) further identify
participants' interests with those of IndyMac's stockholders through
compensation that is based on the value of IndyMac's stock. The Board of
Directors has approved the 2002 Plan, and is recommending it to IndyMac's
stockholders for their approval because the Board believes it is important for
employees and others providing services to IndyMac and its subsidiaries to have
an equity interest in IndyMac. Awards may be granted under the Plan 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. In addition,
nonqualified options will be automatically
21
granted to each director of IndyMac or IndyMac Bank 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."
PLAN ADMINISTRATION
The Plan provides that it will be administered by a committee of the Board
of Directors of IndyMac consisting of two or more directors (the "Committee").
The Committee will be the Compensation Committee of the Board of Directors of
IndyMac. The Committee has the authority to grant, and amend, any type or
combination of types of awards, whether payable in stock, cash or a combination
of the two.
The Committee may delegate all or any portion of its responsibilities or
powers under the Plan to persons selected by it. Until action to the contrary is
taken by the Committee, ministerial, non-discretionary functions of the Plan
have been delegated to the senior human resources manager of IndyMac. The
Committee may also delegate to officers of IndyMac the authority to grant awards
under the Plan, provided that such delegation is set forth in writing and
includes all of the limitations and parameters applicable to such awards, and
provided further that such awards are subsequently ratified by the Committee.
GENERAL
As of February 28, 2002, all of the approximately 2,400 officers and
employees of IndyMac and its subsidiaries were eligible to receive awards under
the Plan, subject to the power of the Committee to determine the eligible
employees and other persons (other than Non-Employee Directors) to whom awards
will be granted. The total number of shares that may be granted under the 2002
Plan is 3,000,000 shares, subject to adjustment as described below. Any shares
allocated to an award under the 2002 Plan that expires, lapses, is forfeited or
terminated for any reason without issuance of the shares (whether or not cash or
other consideration is paid to the holder in respect of such shares) will be
available for new awards to be granted under the 2002 Plan.
The following additional limits will apply to awards under the 2002 Plan:
(1) no more than 300,000 shares of Common Stock may be issued for bonus stock,
stock unit, performance share, performance unit, restricted stock, and
restricted stock unit awards; (2) no more than 1,500,000 shares of Common Stock
may be issued for options and SARs granted to any one individual in any calendar
year; (3) no more than 300,000 shares of Common Stock may be issued for bonus
stock, stock unit, performance share, performance unit, restricted stock, and
restricted stock unit awards that are intended to be "performance-based
compensation" (as described below) granted to any one individual during any
calendar year; (4) no more than $1,500,000 may be granted to any one individual
during any calendar year as performance unit awards that are intended to be
performance-based compensation; and (5) no more than $1,500,000 may be paid to
any one individual for any annual performance period as cash incentive awards
that are intended to be performance-based compensation.
The Common Stock with respect to which awards may be made under the Plan
must be shares that are currently authorized but unissued, or to the extent
permitted by applicable law, currently held or subsequently acquired by IndyMac
as treasury shares, including shares purchased in the open market or in private
transactions. At the discretion of the Committee, an award under the Plan may be
settled in cash rather than Common Stock. The Committee may use shares of Common
Stock available under the Plan as the form of payment for compensation, grants
or rights earned or due under any other compensation plans or arrangements of
IndyMac or a subsidiary, including the plans and arrangements of IndyMac or a
subsidiary assumed in business combinations.
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 stockrelated benefits.
The length of service required for an award to vest fully (which, in the case of
stock options, must be at least one year, and in the case of restricted stock or
restricted stock unit awards that vest without regard to achievement of
performance objectives, must be at least three years), and any other
restrictions that are deemed appropriate by the Committee for a particular type
of award, to particular individuals, or in particular circumstances, will be
included in the individual award memorandum reflecting the grant of an award to
the recipient and setting forth specific terms and conditions of the award.
22
The Plan contains provisions relating to adjustments of the terms of
outstanding awards to reflect changes in IndyMac's capitalization or Common
Stock or the occurrence of 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.
Except as otherwise provided by the Committee, awards under the Plan will
only be transferable to the extent designated by the holder by will or by laws
of descent and distribution.
STOCK OPTIONS
The Committee may grant options to purchase Common Stock, which may be
either incentive stock options, which qualify for favorable tax treatment for
the holders of such options, or non-qualified stock options. The purchase price
of a share of Common Stock under each option must be not less that the fair
market value of a share of Common Stock on the date the option is granted.
Options granted under the Plan will be exercisable in accordance with the terms
established by the Committee. The full purchase price of each share of Common
Stock purchased upon the exercise of any option must be paid at the time of
exercise. The Committee, in its discretion, may impose such conditions,
restrictions, and contingencies on Common Stock acquired pursuant to the
exercise of an option as the Committee determines to be desirable.
Except as otherwise provided by the Committee, if an employee recipient of
a stock option award under the Plan terminates employment for a reason other
than Cause (as determined by the Committee in its sole discretion), death,
permanent and total disability or retirement, the holder of the stock option may
exercise the stock option at any time within a period of three months after such
termination to the extent the stock option was exercisable on the date of such
termination. If the employee terminates employment by reason of permanent and
total disability, or if the employee becomes permanently and totally disabled
within three months after termination (other than termination for Cause), the
employee may exercise the stock option at any time within a period of twelve
months after such termination to the extent the stock option was exercisable on
the date of such termination. If the employee terminates employment by reason of
death, or if the employee dies within three months after termination (other than
termination for Cause), then the stock option may be exercised within a period
of twelve months after the employee's termination of employment, to the extent
the stock option was exercisable on the date of such termination. If the
employee terminates employment by reason of retirement, then the stock option
may be exercised within a period of twelve months after the employee's
termination of employment, to the extent the stock option was exercisable on the
date of such termination. In no event, however, may any stock option be
exercised by any person after its expiration date.
The Plan provides that, except as may be approved by IndyMac stockholders,
the exercise price for an outstanding stock option may not be decreased after
the stock option has been granted, nor may an outstanding stock option be
surrendered to IndyMac as consideration for the grant of a new stock option with
a lower exercise price.
STOCK APPRECIATION RIGHTS
The Committee may grant an SAR in connection with all or any portion of a
previously or contemporaneously granted option or independent of any option
grant. An SAR entitles its holder to receive the amount by which the fair market
value of a specified number of shares on the exercise date exceeds an exercise
price established by the Committee, which may not be less than the fair market
value of the Common Stock at the time the SAR is granted. The excess amount will
be payable in Common Stock, in cash, or in a combination thereof, as determined
by the Committee. The Committee, in its discretion, may impose such conditions,
restrictions, and contingencies on the Common Stock acquired pursuant to the
exercise of an SAR as the Committee determines to be desirable.
OTHER STOCK AWARDS
The Committee may grant bonus stock (a grant of shares of Common Stock in
return for previously performed services, or in return for the holder
surrendering other compensation that may be due), stock units (a right to
receive Common Stock in the future), performance shares and performance units (a
right to receive Common Stock or stock
23
units, or the right to receive a designated dollar value of Common Stock, that
is contingent upon achievement of performance or other objectives), restricted
stock and restricted stock units (grants of Common Stock or the right to receive
Common Stock in the future, which shares or rights are made subject to a risk of
forfeiture or other restrictions that lapse upon the achievement of one or more
goals relating to completion of service by the holder or the achievement of
performance or other objectives, as determined by the Committee). Recipients of
restricted stock may have voting rights and may receive dividends on the granted
shares prior to the time the restrictions lapse.
CASH INCENTIVE AWARDS
The Committee may grant cash incentive awards that are made contingent on
the achievement of performance goals it establishes for the applicable
performance period. The performance goals must be objective and must be
established in writing by the Committee not later than 90 days after the
beginning of the performance period (but in no event after 25% of the
performance period has elapsed), and while the outcome as to the performance
goals is substantially uncertain.
PAYMENT PROVISIONS
The Plan permits the payment of the option exercise price, or award price
in cash, or, at the Committee's discretion with shares of Common Stock valued at
their fair market value, or with a combination of such shares and cash. 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
the Committee) and meets any other requirements established by the Committee.
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 Plan, to the extent authorized by the
Committee.
Shares held by a Plan 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.
CHANGE IN CONTROL
In the event of a Change in Control of IndyMac, as defined below, awards
under the Plan become fully vested and immediately exercisable. The Committee is
authorized, however, to limit the duration of such acceleration of awards. The
Board of Directors of IndyMac may also make an affirmative determination in
light of all of the 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 Board of
Directors shall consider, without limitation, the likely effect of such
transaction(s) on the makeup of IndyMac's stockholder base, Board of Directors
and senior management. If the Board of Directors does not exercise the right to
make such an affirmative determination, a "Change in Control" will be deemed to
occur under the Plan if: (1) any entity or group (other than (a) IndyMac or any
of its subsidiaries, (b) any employee benefit plan maintained by IndyMac or any
subsidiary of IndyMac or (c) any other entity or group in connection with a
Non-Control Transaction (as defined in the Plan)) acquires 25% or more of the
then outstanding Common Stock or the combined voting power of IndyMac's then
outstanding voting securities; (2) the individuals who as of January 23, 2002,
were members of the Board of Directors (the "Incumbent Board") together with any
new directors nominated or elected by the stockholders and approved by a vote of
at least two-thirds of the Incumbent Board cease for any reason to constitute at
least a majority of the members of the Board of Directors; (3) a merger,
consolidation or reorganization involving IndyMac is consummated, unless the
transaction is a Non-Control Transaction; (4) a complete liquidation or
dissolution of IndyMac is approved by the stockholders; (5) disposition of all
or substantially all of the assets of IndyMac occurs (other than a transfer to a
subsidiary of IndyMac); or (6) disposition of all or substantially all of the
stock or assets of IndyMac Bank, F.S.B. (other than a transfer to a subsidiary
of IndyMac) occurs.
24
NON-EMPLOYEE DIRECTOR AWARDS
Under the Plan, each Non-Employee Director will be entitled to receive
annual grants of nonqualified stock options ("Director Options") to purchase the
number of shares of Common Stock that equals 0.025% of the issued and
outstanding shares of 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 (other than newly elected Non-Employee Directors, who may
receive a pro rata number of shares as set forth below). Newly elected
Non-Employee Directors will automatically receive a grant of Director Options
upon election as follows: (1) if the Non-Employee Director is elected within six
months following the annual grant date, a grant of Director Options for the
number of shares covered by the most recent annual grant, and (2) 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 the most recent annual
director grant. The Director Options will have exercise prices equal to the per
share fair market value of the 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 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 (or such other period as may be required by the Committee) and meets
any other requirements established 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 (1) the loan is
made pursuant to a full recourse promissory note, and (2) the loan, if secured
by Common Stock, is made in compliance with applicable federal margin
regulations.
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 termination 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.
AMENDMENT AND TERMINATION
The Plan, and any award granted under the Plan, may be amended or
terminated at any time by the Board. No amendment or termination may adversely
affect the rights of any participant without the participant's written consent.
TAX CONSEQUENCES OF THE PLAN
The federal income tax consequences of the 2002 Plan under current law,
which is subject to change, are summarized in the following paragraphs. 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. In addition, it does not address any state or local tax
consequences of awards under the Plan.
NONQUALIFIED STOCK OPTIONS
No taxable income will be realized by an optionee upon the grant of a
nonqualified stock option ("NQO"). Upon exercise of an NQO, 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 optionee will realize short-term or longterm 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 optionee
uses previously owned shares to pay some or all of the option exercise price.
25
The exercise of an NQO through the delivery of previously acquired stock
will generally be treated as a nontaxable, like-kind exchange as to the number
of shares surrendered and the identical number of shares received under the
option. That number of shares will take the same basis and, for capital gains
purposes, the same holding period as the shares that are given up. The value of
the shares received upon such an exchange that are in excess of the number given
up will be includible as ordinary income to the participant at the time of
exercise. The excess shares will have a new holding period for capital gain
purposes and a basis equal to the value of such shares determined at the time of
exercise.
INCENTIVE STOCK OPTIONS
An optionee who receives an incentive stock option ("ISO") 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 treated as an item of tax preference at the time of exercise in
determining liability for the alternative minimum tax. If stock acquired
pursuant to an ISO 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
ISO is disposed of prior to the expiration of such holding periods, the optionee
will generally realize ordinary income, and a corresponding deduction will be
allowed to IndyMac, at the time of the disposition of the shares, in an amount
equal to the lesser of (1) the excess of the fair market value of the shares on
the date of exercise over the exercise price, or (2) the excess, if any, of the
amount realized upon disposition of the shares over the exercise price. If the
amount realized exceeds the value of the shares on the date of exercise, any
additional amount will be capital gain. If the amount realized is less than the
exercise price, the optionee will recognize no income, and a capital loss will
be recognized equal to the excess of the exercise price over the amount realized
upon the disposition of the shares.
The exercise of an ISO through the exchange of previously acquired stock
will generally be treated in the same manner as such an exchange would be
treated in connection with the exercise of an NQO; that is, as a non-taxable,
like-kind exchange as to the number of shares given up and the identical number
of shares received under the option. That number of shares will take the same
basis and, for capital gain purposes, the same holding period as the shares that
are given up. However, the holding period will not be credited for purposes of
the one-year holding period required for the new shares to receive ISO
treatment. Shares received in excess of the number of shares given up will have
a new holding period and will have a basis of zero or, if any cash was paid as
part of the exercise price, the excess shares received will have a basis equal
to the amount of the cash. If a disqualifying disposition (a disposition before
the end of the applicable holding period) occurs with respect to any of the
shares received from the exchange, it will be treated as a disqualifying
disposition of the shares with the lowest basis.
If the exercise price of an ISO is paid with Common Stock acquired through
a prior exercise of an ISO, gain will be realized on the shares given up (and
will be taxed as ordinary income) if those shares have not been held for the
minimum ISO holding period (two years from the date of grant and one year from
the date of transfer), but the exchange will not affect the tax treatment, as
described in the immediately preceding paragraph, of the shares received.
RESTRICTED AND OTHER STOCK
A participant who has been granted a restricted stock award will not
realize taxable income at the time of grant, and IndyMac will not be entitled to
a deduction at that time, assuming that the restrictions constitute a
"substantial risk of forfeiture" for federal income tax purposes. Upon the
vesting of shares subject to an award, the holder will realize ordinary income
in an amount equal to the then fair market value of those shares, and IndyMac
will be entitled to a corresponding deduction. Gains or losses realized by the
holder upon disposition of the shares will be treated as capital gains and
losses, with the basis in the shares being equal to the fair market value of the
shares at the time of vesting. Dividends paid to the holder during the
restriction period will also be compensation income to the holder and deductible
as such by IndyMac.
26
STOCK APPRECIATION RIGHTS
A recipient of an SAR will not recognize any taxable income at the time of
the grant of the SAR, and IndyMac will not be entitled to a deduction for the
SAR at that time. Upon the exercise of an SAR, the holder of the SAR will
generally recognize ordinary income in an amount equal to the cash and/or fair
market value of the shares received. If the holder receives stock, then the
amount recognized as ordinary income becomes the holder'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 holder of
the SAR first recognizes ordinary income.
PERFORMANCE AWARDS
A person 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.
STOCK PAYMENTS AND BONUSES
A person 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 be entitled to a deduction in the same amount.
CASH INCENTIVE AWARDS
A person who has been granted a cash incentive award will recognize
ordinary income when the award is paid, and IndyMac will then be entitled to a
deduction.
ACCELERATED PAYMENTS
If, as a result of a change in control of IndyMac, a Plan 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
the 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
An income tax deduction is generally not available for annual compensation
in excess of $1 million paid to any of the five most highly compensated
executive officers of a public corporation. However, amounts that constitute
"performance-based compensation" are not counted toward the $1 million limit. It
is expected that options and SARs granted under the 2002 Plan will satisfy the
requirements for "performance-based compensation." The Committee may designate
whether any bonus stock, stock units, performance shares, performance units,
restricted stock, restricted stock units or cash incentive awards being granted
to any participant are intended to be "performance- based compensation" as that
term is used in Section 162(m) of the Internal Revenue Code. Any such awards
designated as intended to be "performance-based compensation" must be
conditioned on the achievement of one or more performance measures, to the
extent required by Section 162(m). The Plan provides that the performance
measures that may be used by the Committee for such performance awards, which
must be quantitative and objective, and not qualitative, standards, may be based
on any one or more of the following, as selected by the Committee: core
earnings; net worth; stock price; asset quality; efficiency ratio; loan
origination; deposit growth; interest rate risk; earnings per share; return on
average common equity; return on average equity; net operating expense,
27
either before or after amortization of intangible assets (goodwill); operating
earnings (earnings before transactionrelated expense) per diluted share of
common stock, either before or after amortization of intangible assets
(goodwill); return on average assets, ratio of non-performing assets to total
assets; credit risk; liquidity risk; customer service; and regulatory
compliance.
SPECIFIC BENEFITS
No awards have been made to date under the 2002 Plan. As described in more
detail in "Employment Agreements -Chief Executive Officer," pursuant to Mr.
Perry's new employment agreement, the Committee will grant two separate stock
option awards under the 2002 Plan effective upon the approval of the 2002 Plan
by the stockholders of IndyMac, representing a total of 1,500,000 shares of
Common Stock.
VOTE REQUIRED
Approval of the Plan requires the affirmative vote of holders of a majority
of the shares present or represented at the meeting and entitled to vote on this
matter, provided that the total votes cast must represent over 50% of the shares
entitled to vote on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE 2002
INCENTIVE PLAN. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED
UNLESS THE STOCKHOLDER SPECIFIES OTHERWISE.
STOCK PERFORMANCE GRAPH
The following chart compares the total stockholder return (stock price
increase plus dividends) on IndyMac's Common Stock from December 31, 1996
through December 31, 2001 with the total stockholder returns for the Russell
2000 Index, as the broad market index, and the Russell 2000 Financial Services
Index, as the peer group index. The graph assumes that the value of the
investment in the Common Stock and each index was $100 on December 31, 1996 and
that all dividends were reinvested.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
Dec96 Dec97 Dec98 Dec99 Dec00 Dec01
Indymac 100 117.69 58.23 79.46 183.84 145.7
Russell 2000 Index 100 122.36 119.25 144.6 140.23 143.71
Russell 2000 Financial Index 100 136.03 126.25 118.84 143.85 166.35
ASSUMES $100 INVESTED ON DECEMBER 31, 1996
ASSUMES DIVIDENDS REINVESTED THROUGH
FISCAL YEAR ENDING DECEMBER 31, 2001
28
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. 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.
INDEPENDENT PUBLIC ACCOUNTANTS AND AUDIT COMMITTEE MATTERS
GENERAL
The Board of Directors has selected Ernst & Young LLP to audit IndyMac's
financial statements for the year ending December 31, 2002. A representative of
Ernst & Young 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.
Grant Thornton LLP served as IndyMac's independent public accountants until
June 4, 2001 when the Board of Directors, upon the recommendation of the Audit
Committee of the Board of Directors, dismissed Grant Thornton LLP as the
independent public accountants for IndyMac and selected Ernst & Young LLP to
replace Grant Thornton LLP and to serve as IndyMac's independent public
accountants for the year ending December 31, 2001.
The reports of Grant Thornton LLP on IndyMac's financial statements for the
two fiscal years ended December 31, 2000 did not contain any adverse opinion or
a disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles. In connection with the audits of IndyMac's
financial statements for each of these two fiscal years, and in the subsequent
interim period, there were no disagreements with Grant Thornton LLP on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope and procedures which, if not resolved to the satisfaction of
Grant Thornton LLP, would have caused Grant Thornton LLP to make reference to
the matter in their report. IndyMac requested Grant Thornton LLP to furnish it a
letter addressed to the Securities and Exchange Commission stating whether it
agreed with the above statements and a copy of that letter, indicating such
agreement, was filed as Exhibit 16.1 to the Form 8-K filed by IndyMac on June 6,
2001.
AUDIT COMMITTEE REPORT
Management is responsible for IndyMac's internal controls and the financial
reporting process. The independent public accountants are responsible for
performing an independent audit of IndyMac's consolidated financial statements
in accordance with generally accepted auditing standards and to issue a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes, but the Audit Committee is not responsible for preparing IndyMac's
financial statements or auditing those financial statements, which are the
responsibilities of management and the independent public accountants,
respectively.
The Audit Committee reviewed with IndyMac's independent public accountants,
who are responsible for expressing an opinion on the conformity of the audited
financial statements with generally accepted accounting principles, the
independent public accountants' judgment as to the quality, not just the
acceptability, of IndyMac's accounting principles and such other matters as are
required to be discussed with the Audit Committee under generally accepted
auditing standards. The Audit Committee also discussed with IndyMac's internal
auditors and its independent public accountants the overall scope and plans for
their respective audits. The Audit Committee meets with the internal auditors
and independent public accountants to discuss the results of their examinations,
their evaluations of IndyMac's internal controls and the overall quality of
IndyMac's financial reporting.
In the context of the foregoing, the Audit Committee of the Board of
Directors has reviewed the audited financial statements of IndyMac for the
fiscal year ended December 31, 2001 with management. Management represented to
the Audit Committee that IndyMac's consolidated financial statements were
prepared in accordance with generally accepted accounting principles.
29
The Audit Committee has discussed the consolidated financial statements
with Ernst & Young LLP and it has discussed with Ernst & Young LLP the matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees) relating to the conduct of the audit. The
Audit Committee has also received written disclosures and a letter from Ernst &
Young LLP regarding its independence from IndyMac as required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
has discussed with Ernst & Young LLP the independence of that firm, and has
considered the compatibility of nonaudit services with the independence of Ernst
& Young LLP.
Based upon the above materials and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in IndyMac's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.
The Audit Committee
Hugh M. Grant, CHAIRMAN
Robert L. Hunt II (November 2001 to present)
James R. Ukropina (February 2001 to present)
FEES OF PRINCIPAL ACCOUNTANTS
The following table sets forth the aggregate fees billed to IndyMac for the
fiscal year ended December 31, 2001 by Ernst & Young LLP:
TYPE OF FEE AMOUNT
----------- ------
Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $465,000
Audit Related Fees(2)(3). . . . . . . . . . . . . . . . . . . . . . . . $374,000
Financial Information Systems Design and Implementation Fees(3) . . . . $ 0
All Other Fees(3)(4). . . . . . . . . . . . . . . . . . . . . . . . . . $655,000
- ----------------
(1) Includes the fees for the audit of IndyMac's annual financial statements
for fiscal year 2001 and the review of the financial statements included in
IndyMac's Form 10-Qs for the second and third quarters of 2001. The fees
billed by Grant Thornton LLP for the review of the financial statements
included in IndyMac's Form 10-Q for the first quarter of 2001 were $22,000.
(2) These fees were primarily for services provided in connection with trust
preferred and mortgage-backed securities offerings of IndyMac or its
subsidiaries during 2001 and general accounting advice.
(3) The Audit Committee has considered whether the provision of the services
relating to these fees is compatible with maintaining the principal
accountants' independence.
(4) Includes fees for all services not included in the other three categories
listed. These fees were primarily for tax, compliance and consulting
services, business continuity planning and assistance in designing an
Internetbased training platform.
ANNUAL REPORT AND FORM 10-K
The 2001 Annual Report to Stockholders containing the consolidated
financial statements of IndyMac for the year ended December 31, 2001 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, 2001 AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WITHOUT THE ACCOMPANYING EXHIBITS, BY
WRITING TO INVESTOR RELATIONS, INDYMAC BANCORP, INC., 155 NORTH LAKE AVENUE,
P.O. BOX 7211, 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.
30
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2003 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 November 13, 2002 to be considered
for inclusion in IndyMac's proxy materials for that meeting.
Stockholders intending to present business at IndyMac's 2003 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 there of
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 December 26, 2002 and
no later than January 24, 2003. If the notice is received before December 26,
2002 or after January 24, 2003, it will be considered untimely and IndyMac will
not be required to present the proposal at the 2003 Annual Meeting.
By Order of the Board of Directors
/s/ Richard L. Sommers
----------------------------------
Richard L. Sommers
EXECUTIVE VICE PRESIDENT, GENERAL
Dated: March 13, 2002 COUNSEL AND SECRETARY
31
APPENDIX A
INDYMAC BANCORP, INC. AUDIT COMMITTEE CHARTER
PURPOSE
An Audit Committee is appointed by the Board of Directors (the "Board") of
IndyMac Bancorp, Inc. (the "Corporation"). The primary function of the Audit
Committee is to assist the Board in fulfilling its oversight responsibilities
with respect to the financial reports and other financial information provided
by the Corporation to the stockholders and others, the Corporation's system of
internal controls, and the Corporation's audit, accounting, and financial
reporting processes generally. In carrying out this function, the Audit
Committee shall serve as an independent and objective monitor of the performance
of the Corporation's financial reporting process and system of internal control;
review and appraise the audit efforts of the Corporation's independent
accountants and internal audit department; and provide for open, ongoing
communication among the independent accountants, financial and senior management
of the Corporation and of IndyMac Bank, F.S.B. (the "Bank"), the internal audit
department, and the Board concerning the Corporation's financial position and
affairs.
COMPOSITION
The Audit Committee shall be comprised of not less than three members, all
of whom have no relationship with the Corporation that may interfere with the
exercise of their independence from management and the Corporation. All members
of the Audit Committee shall be "financially literate," as the Board interprets
such qualifications using its business judgement. At least one Audit Committee
member will have accounting or related financial management expertise.
MEETINGS
The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee shall meet at least
annually, and more often as warranted, with the General Auditor and the
independent accountants in separate executive sessions to discuss any matters
that the Audit Committee or any of these parties believes should be discussed
privately. The Audit Committee shall maintain a high degree of independence both
in establishing its agenda and directly accessing senior managers of the
Corporation or its subsidiaries. The Audit Committee shall meet at least
annually with management, the General Auditor and/or the audit committee of the
Bank regarding its systems of internal control, results of audits, and accuracy
of financial reporting.
RESPONSIBILITIES AND DUTIES
The Audit Committee's responsibility is oversight, and it recognizes that
the Corporation's management is responsible for preparing the Corporation's
financial statements and that the independent accountants are responsible to
audit them. Additionally, the Audit Committee recognizes that financial
management (including the internal audit staff), as well as the independent
accountants, have more knowledge and more detailed information about the
Corporation than do the members of the Audit Committee; consequently, in
carrying out its oversight responsibilities the Audit Committee is not providing
any expert or special assurance as to the Corporation's financial statements or
any professional certification as to the independent accountants'work.
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The following functions shall be the common recurring activities of the
Audit Committee in carrying out its oversight responsibility. These functions
are set forth as a guide with the understanding that the Audit Committee may
diverge from this guide as appropriate given the circumstances.
o Review with a representative of financial management and the
independent accountants the financial information contained in the
Corporation's Quarterly Report on Form 10-Q prior to its filing, the
Corporation's earnings announcements prior to release, and the results
of the independent accountants' review of Interim Financial
Information pursuant to SAS 71. The Chair may represent the entire
Audit Committee, either in person or by telephone conference call, for
purposes of this review.
o Review with management and the independent accountants at the
completion of the annual audit of the Corporation's consolidated
financial statements included in the Annual Report on Form 10-K for
the last fiscal year and prior to its filing:
1. the Corporation's annual consolidated financial statements and
related footnotes;
2. the independent accountants' audit of the consolidated financial
statements and their report;
3. any significant changes required in the independent accountants'
examination plan;
4. any serious difficulties or disputes with management encountered
during the course of the audit; and
5. other matters related to the conduct of the audit which are to be
communicated to the Audit Committee under generally accepted
auditing standards, including discussions relating to the
independent accountants' judgements about such matters as the
quality, not just the acceptability, of the Corporation's
accounting practices and other items set forth in SAS 61
(Communications with Audit Committees) or such other auditing
standards that may in time modify, supplement or replace SAS 61.
o On an annual basis, the Audit Committee should ensure receipt of, and
review with the independent accountants, a written statement required
by Independence Standards Board (ISB) Standard No. 1, as may be
modified or supplemented, and discuss with the accountants their
independence. The Audit Committee will recommend that the Board take
appropriate action on any disclosed relationships that may reasonably
be thought to bear on the independence of the accountants and satisfy
itself that the Corporation has engaged independent accountants as
required by the Securities Acts administered by the Securities and
Exchange Commission.
o The Audit Committee shall have prepared and shall review the Audit
Committee Report for inclusion in the annual stockholders' meeting
proxy statement. The Audit Committee Report must state whether the
Audit Committee:
1. has reviewed and discussed the audited consolidated financial
statements with management;
2. has discussed with the independent accountants the matters
required to be discussed by SAS 61, as may be modified,
supplemented or replaced;
3. has received the written disclosures from the independent
accountants required by ISB Standard No. 1, as may be modified or
supplemented, and has discussed with the accountants their
independence; and
4. has recommended to the Board, based on the review and discussions
referred to in above items (1) through (3), that the
Corporation's consolidated financial statements be included in
the Annual Report on Form 10-K for the last fiscal year for
filing with the Securities and Exchange Commission.
o The Audit Committee and Board are responsible for the selection,
evaluation and, where appropriate, replacement of the independent
accountants. Consistent with these responsibilities, it is recognized
that the independent accountants are ultimately accountable to the
Board and Audit Committee.
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o Review and reassess the adequacy of this Audit Committee Charter on an
annual basis. This Charter will be included as an appendix to the
annual stockholders' meeting proxy statement at least once in every 3
year period and in the next annual stockholders' meeting proxy
statement after any significant amendment to this Charter.
o In consultation with the independent accountants and the General
Auditor, regularly review the integrity of the Corporation's financial
reporting processes and system of internal control.
o Review and concur in the appointment, replacement, reassignment or
dismissal of the General Auditor. Confirm and assure the objectivity
of the General Auditor.
o Review the performance of the internal audit department, including the
objectivity and authority of its reporting obligations, the proposed
audit plans for the coming year, and the coordination of such plans
with the independent accountants.
o Review, as needed, the internal audit department's charter, which
shall define its purpose, authority, and responsibilities.
o Review policies and procedures with respect to officers' expense
accounts and perquisites, including their use of corporate assets, and
consider the results of any review of these areas by the internal
auditors or the independent accountants.
o Review legal and regulatory matters that may have a material impact on
the Corporation's consolidated financial statements, related
compliance policies and programs, and reports received from
regulators.
o Review with the General Auditor the results of the internal audit
department's review of compliance with the Corporation's Code of
Conduct.
In addition to the activities described above, the Audit Committee will
perform such other functions as necessary or appropriate under law, the
Corporation's charter or by-laws, and the resolutions and other directives of
the Board.
The Audit Committee shall have the power to conduct or authorize
investigations into any matters within its scope of responsibilities and shall
be empowered to retain independent counsel, accountants, or others to assist it
in the conduct of any investigation.
The duties and responsibilities of a member of the Audit Committee are in
addition to those duties generally pertaining to a member of the Board.
The Audit Committee will report its actions to the Board with such
recommendations as the Audit Committee may deem appropriate.
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INDYMAC VOTE BY TELEPHONE OR INTERNET
BANCORP, INC. 24 HOURS A DAY, 7 DAYS A WEEK
TELEPHONE INTERNET MAIL
1-888-216-1322 HTTPS://WWW.PROXYVOTENOW.COM/NDE
Use any touch-tone telephone to vote Use the Internet to vote your proxy. Have Mark, sign and date your proxy card and
your proxy. Have your proxy card in your proxy card in hand when you access return it in the postage-paid envelope we
hand when you call. You will be the website. You will be prompted to enter have provided.
prompted to enter your control your control number, located in the box
number, located in the box below, and below, to create an electronic ballot.
then follow the simple directions
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 INTERNET THERE IS NO NEED FOR YOU TO MAIL BACK YOUR PROXY
CARD.
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CONTROL NUMBER FOR
TELEPHONE OR INTERNET VOTING
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1-888-216-1322
CALL TOLL-FREE TO VOTE
DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET
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Please sign, date and return /X/
/ / this proxy card in the Votes must be indicated
enclosed envelope. (x) in Black or Blue ink.
1. Election of Directors
FOR WITHHOLD
ALL / / FOR ALL / / *EXCEPTIONS / / Consent to future electronic
delivery of Annual Report/Proxy
Statement (see explanation on / /
Nominees: 01 - David S. Loeb, 02 - Michael W. Perry, 03 - Lyle E. page 2 of the Proxy Statement).
Gramley, 04 - Hugh M. Grant,
05 - Patrick C. Haden, 06 - Robert L. Hunt II, 07 - Frederick J. Napolitano, To change your address, please
08 - James R. Ukropina mark this box and correct at / /
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK left.
THE "EXCEPTIONS" BOX AND
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.) To include any comments, please
mark this box, and use reverse / /
*Exceptions: side.
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I PLAN TO ATTEND THE MEETING. / /
2. To approve the IndyMac Bancorp, Inc.
2002 Incentive Plan. FOR / / AGAINST / / ABSTAIN / /
UNMARKED PROXIES SHALL BE VOTED IN FAVOR OF EACH OF THESE MATTERS unless specified to the contrary.
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SCAN LINE
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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.
Date Share Owner sign here Co-Owner sign here
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INDYMAC BANCORP, INC.
P R O X Y
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS APRIL 24, 2002
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
Bancorp, Inc. ("IndyMac") which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of IndyMac to be held
at IndyMac's offices located at 3465 East Foothill Boulevard, Pasadena,
California on April 24, 2002 at 9:00 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 March 13, 2002
is hereby acknowledged.
(continued and to be signed on the reverse side.)
INDYMAC BANCORP, INC.
P.O. BOX 11262
NEW YORK, N.Y. 10203-0262