UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2007
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number: 1-8422
Countrywide Financial Corporation
(Exact name of registrant as specified in its charter)
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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13-2641992
(I.R.S. Employer
Identification No.)
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4500 Park Granada, Calabasas, CA
(Address of principal executive offices)
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91302
(Zip Code)
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Registrants telephone number, including area code:
(818) 225-3000
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.05 Par Value
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New York Stock Exchange
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Preferred Stock Purchase Rights
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act. Yes
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No
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. Yes
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No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller reporting company in
Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes
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No
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As of June 30, 2007, the last business day of the registrants most recently completed second
fiscal quarter, the aggregate market value of the Registrants Common Stock held by non-affiliates
was $20,784,169,522 based on the closing price as reported on the New York Stock Exchange.
As of April 4, 2008, there were 583,344,170 shares of Countrywide Financial Corporation Common
Stock, $0.05 par value, outstanding.
Countrywide Financial Corporation
Amendment
No. 1 to
2007 Annual Report on Form 10-K/A
Table of Contents
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Explanatory Note
This Amendment No. 1 (Amendment No. 1) to the Annual Report on Form 10-K of Countrywide
Financial Corporation (Countrywide, the Company, we or us) for the fiscal year ended December 31, 2007
(which was filed with the SEC on February 29, 2008, the 2007 Annual Report), is being filed to
include the information required in Part III (Items 10, 11, 12, 13 and 14) of the 2007 Annual
Report.
This Amendment No. 1 does not affect any other portion of the 2007 Annual
Report, other than the filing of new Exhibits 31.1 and 31.2, which are being filed herewith.
Additionally, except as specifically referenced herein, this Amendment No. 1 does not reflect any
event occurring after February 29, 2008, the filing date of the 2007 Annual Report.
When we refer to our fiscal year, we mean the twelve-month period ended December 31 of the
stated year (for example, Fiscal 2007 is January 1, 2007 through December 31, 2007), unless
specifically stated otherwise.
ii
Item 10.
Directors, Executive Officers and Corporate Governance
DIRECTORS
The nine members of the Board of Directors of the Company, as of the date of this Form 10-K/A,
are as follows:
DirectorsTerm Expiring 2008 (Class III)
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Angelo R. Mozilo
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Age 69, Director since 1969
. Mr. Mozilo is the Chairman
of the Board and Chief Executive Officer of the Company.
Mr. Mozilo is a co-founder of the Company and has been
Chairman of the Board of the Company since March 1999
and Chief Executive Officer of the Company since
February 1998. Prior to his present position, he was
President of the Company from March 2000 through
December 2003 and served in other executive capacities
since the Companys formation in March 1969. Mr. Mozilo
was the 1991-1992 President of the Mortgage Bankers
Association of America and also served on its board of
directors. He currently serves on the board of directors
of the Harvard Kennedy School Joint Center for Housing
Studies. He is also a member of the boards of trustees
of the National Housing Endowment, Fordham University
and Gonzaga University.
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Oscar P. Robertson
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Age 69, Director since 2000
. Mr. Robertson is the
President and Chief Executive Officer of Oscar
Robertson Solutions L.L.C., a holding company, and
Orchem Corporation, a manufacturer of specialty
chemicals. He is also President and Chief Executive
Officer of OR Document Management Services, LLC, a
document management provider, and a member and manager
of OR Food Force, LLC. Mr. Robertson is also General
Partner of Oscar Robertson Media Ventures, a media
publications firm. Mr. Robertson currently serves on
the board of trustees of the Lupus Foundation of
America, he is an honorary spokesperson for the
National Kidney Foundation and he serves on the board
of directors of Countrywide Bank, FSB. From 1960 to
1974, Mr. Robertson was a professional basketball
player, and he was inducted into the National
Basketball Hall of Fame in 1979.
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Keith P. Russell
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Age 62, Director since 2003
. Mr. Russell has been the
President and Chief Executive Officer of Russell
Financial, Inc., a strategic and financial consulting
firm, since 2001. From 1996 to 2001, he was Chairman of
Mellon West where he established, expanded and oversaw
Mellons West Coast operations and, from 1991 to 1996,
he was Vice-Chairman and Chief Risk Officer of Mellon
Financial Corporation. Prior to these positions, Mr.
Russell served as President and Chief Operating Officer
of Glendale Federal Bank. Mr. Russell currently serves
on the boards of directors of Countrywide Bank, FSB,
Nationwide Health Properties and Sunstone Hotel
Investors, Inc. He also currently serves on the advisory
board of Forrest Binkley and Brown Capital Partners, a
venture capital firm, and is a member of the board of
visitors of the UCLA Anderson School of Management.
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David Sambol
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Age 48, Director since 2007
. Mr. Sambol is the President and
Chief Operating Officer of the Company. He also serves as
Chairman of the Board and Chief Executive Officer of
Countrywide Home Loans, Inc. and Chief Executive Officer and
President of Countrywide Bank, FSB. Mr. Sambol has served in
a number of other executive positions with the Company,
including most recently as Executive Managing Director,
Business Segment Operations, and as Executive Managing
Director and Chief of Mortgage Banking and Capital Markets.
Prior to joining the Company in 1985, Mr. Sambol served as a
Certified Public Accountant with the accounting firm of Ernst
& Whinney.
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DirectorsTerm Expiring 2009 (Class I)
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Jeffrey M.
Cunningham
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Age 55, Director since 1998
. Mr. Cunningham is the
Chairman and Chief Executive Officer of NewsMarkets
LLC, publishers of Directorship Magazine. He is
also founder and Chairman of New England Ventures,
LLC, an advisory and investment firm with interests
in media and technology. Previously he served as
Managing Director of Schroders International
Finance Fund; president of CMGI, Inc., an Internet
incubator; publisher of Forbes Magazine; and head
of sales and marketing at Business Week Magazine.
He currently serves as non-executive Chairman of
the Board of Sapient Corporation and TheStreet.com,
Inc. and serves on the board of directors of
Countrywide Bank, FSB. He formerly served on the
boards of directors of Data General, Pagenet,
Schindler Holdings and Premiere Group, Inc.
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Martin R. Melone
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Age 66, Director since 2003
. Mr. Melone is a retired
Partner of Ernst & Young LLP, effective June 2003, where
he was responsible for global clients in a wide range of
industries. He became a partner of that firm in 1975.
Mr. Melone previously was a director of Parsons E&C
Corporation. He currently serves on the boards of
directors of Countrywide Bank, FSB, Internet Brands,
Inc., an operator of media and e-commerce sites, and the
Public Counsel Law Center and serves as a trustee of the
California Science Center Foundation. Mr. Melone is also
a member of the American Institute of Certified Public
Accountants and the California Society of Certified
Public Accountants.
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Robert T. Parry
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Age 68, Director since 2004
. Mr. Parry is the retired
President and Chief Executive Officer, effective May
2004, of the Federal Reserve Bank of San Francisco. He
had served in such capacity since February 1986. Mr.
Parry previously was a director and member of the
Executive Committee of the San Francisco Bay Area Council
of the Boy Scouts of America. He currently serves on the
boards of directors of Janus Capital Group, Inc., PACCAR,
Inc., a truck manufacturing and distribution company, the
National Bureau of Economic Research and Countrywide
Bank, FSB.
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DirectorsTerm Expiring 2010 (Class II)
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Robert J. Donato
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Age 68, Director since 1993
. Mr. Donato has been the
President of Donato Financial Services since December
2004. From October 1997 to November 2004, Mr. Donato was
employed as the Executive Vice President, Los Angeles
Branch, of UBS Financial Services, Inc. and from January
1997 through September 1997, he was the President of
Freedom Advisors, Inc., an investment advisor company.
Prior thereto, Mr. Donato held the position of Executive
Vice President, Director of Regional Institutional Sales
for PaineWebber, Incorporated. Mr. Donato previously
served on the boards of directors of Countrywide
Mortgage Investments, Inc. (now IndyMac Bancorp, Inc.),
Paine Webber Development Corp. and the Juvenile Diabetes
Research Foundation. He is an honorary member of the
board of visitors of the Graziadio Graduate School of
Business and Management at Pepperdine University and
currently serves on the board of directors of
Countrywide Bank, FSB.
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Harley W. Snyder
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Age 75, Director since 1991
. Mr. Snyder has been the
President of HSC, Inc., a real estate development
company, since 1972, and President of The S-W
Corporation, a land development company, since 1978. Mr.
Snyder, a consultant and private investor in real
estate, is also currently a managing member of Parke &
Associates LLC, a real estate development company, a
managing partner of Reason Bell Properties, LLC, a
commercial property
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management company, and a managing
member of South Coast, LLC, a real estate development
company. From April 1997 to February 2000, he served as
Senior Vice President, Real Estate, of Whiteco
Industries, Inc., a company engaged in outdoor
advertising, family entertainment, hotels and
restaurants, land development and construction. Mr.
Snyder previously served on the boards of directors of
Countrywide Mortgage Investments, Inc. (now IndyMac
Bancorp, Inc.) and Porter County Community Foundation.
Mr. Snyder was President of the National Association of
Realtors in 1983 and has served as a director of that
organization since 1972. He currently serves on the
boards of directors of Countrywide Bank, FSB and the
Northwestern Indiana Regional Development Authority and
serves on the board of trustees of Valparaiso
University.
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EXECUTIVE OFFICERS
The executive officers of the Company, as of the date of this Form 10-K/A, selected at the
annual organizational meeting of the Board of Directors held on June 13, 2007, or subsequently
appointed, to serve until their successor has been elected and qualified or until their earlier
resignation or removal, are as follows:
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Employed
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Name
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Age
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Office
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Since
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Angelo R. Mozilo
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69
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Chairman of the Board and Chief Executive Officer
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1969
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David Sambol
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48
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President and Chief Operating Officer
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1985
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Kevin W. Bartlett
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50
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Executive Managing Director, Chief Investment Officer
Investments and Market Risk Management
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1984
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Carlos M. Garcia
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52
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Executive Managing Director, Enterprise Risk
Management and Governance
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1984
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Andrew Gissinger III
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48
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Executive Managing Director, Residential Lending and
Insurance
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1995
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Ranjit M. Kripalani
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48
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Executive Managing Director, Capital Markets
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1998
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Sandor E. Samuels
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55
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Executive Managing Director, Chief Legal Officer
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1990
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Jack W. Schakett
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56
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Executive Managing Director, Chief Operations Officer
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1998
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Eric P. Sieracki
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51
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Executive Managing Director and Chief Financial Officer
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1988
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Robert V. James
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53
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Senior Managing Director, President and Chief
Executive Officer, Countrywide Insurance Group
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2004
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Anne D. McCallion
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53
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Senior Managing Director and Deputy Chief Financial Officer
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1991
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Laura K. Milleman
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47
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Senior Managing Director, Chief Accounting Officer
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1989
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Angelo R. Mozilo
, a co-founder of the Company, has served the Company as its Chairman of the
Board since March 1999 and its Chief Executive Officer since February 1998. Mr. Mozilo was
President of the Company from March 2000 through December 2003 and has served in other executive
capacities since the Companys formation in March 1969.
David Sambol
joined the Company in 1985 and became a Managing Director in July 1994. He has
served the Company in a number of executive positions, including most recently from April 2006 to
September 2006 as Executive Managing Director, Business Segment Operations, from January 2004 to
April 2006 as Executive Managing Director and Chief of Mortgage Banking and Capital Markets and
from April 2003 to January 2004 as Executive Managing Director, Loan Originations and Capital
Markets. Mr. Sambol is the President and Chief Operating Officer of the Company, and has served
in this capacity since September 2006. Since October 2006, he has served as Chairman of the Board
and Chief Executive Officer of Countrywide Home Loans, Inc., and since January 2008 he has served
as Chief Executive Officer and President of Countrywide Bank, FSB.
Kevin W. Bartlett
joined the Company in 1984 and became a Managing Director in July 1991. He
has served the Company in a number of executive positions, including Senior Managing Director and
Chief of Secondary Markets. In September 2006, he was promoted to Executive Managing Director,
Chief Investment Officer and currently holds the title of Executive Managing Director, Chief
Investment OfficerInvestments and Market Risk Management.
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Carlos M. Garcia
joined the Company as Vice President, Finance in 1984 and was promoted to
Managing Director in 1990. Mr. Garcia has served the Company in several executive positions,
including Chief Financial Officer, and he currently holds the title of Executive Managing Director,
Enterprise Risk Management and Governance.
Andrew Gissinger III
originally joined the Company in 1995 as Senior Vice President,
Correspondent Lending Division, and left in 1997. After returning to the Company in January 2001,
he served in a number of executive positions before being promoted to Senior Managing Director,
Banking and Insurance Operations. He currently holds the title of Executive Managing Director,
Residential Lending and Insurance. Mr. Gissinger is also President, Chief Operating Officer and
Head of Mortgage Lending of Countrywide Home Loans, Inc. and Chief Operating Officer of Countrywide
Bank, FSB.
Ranjit M. Kripalani
joined the Company as Executive Vice President, National Sales Manager of
Countrywide Securities Corporation in 1998. He held a number of executive positions before being
promoted to Managing Director and President of Countrywide Securities Corporation in 2001. He
currently serves as Executive Managing Director, Capital Markets.
Sandor E. Samuels
joined the Company in 1990 as Senior Vice President, General Counsel and
Secretary. He was promoted to Managing Director, Legal, General Counsel and Secretary in April
1991. He currently holds the title of Executive Managing Director, Chief Legal Officer.
Jack W. Schakett
joined the Company as Senior Vice President, Chief Operating Officer,
Correspondent Lending Division of Countrywide Home Loans, Inc. in 1998. After having held a number
of executive positions, Mr. Schakett was promoted to Managing Director & Chief Operating Officer,
Institutional Mortgage Services Group in 2002. He currently serves as Executive Managing Director,
Chief Operations Officer.
Eric P. Sieracki
joined the Company in 1988 as Senior Vice President of Countrywide Asset
Management Corp. In 1996, after holding several executive positions at the Company, he was promoted
to Managing Director, and in 2002 he was promoted to Senior Managing Director. In April 2005, he
was promoted to Executive Managing Director and Chief Financial Officer.
Robert V. James
joined the Company in 2004 as Managing Director, President and Chief Operating
Officer of Balboa Insurance Group, Inc., the umbrella organization that encompasses the insurance
business segment of the Company. He was promoted to Senior Managing Director of the Company in
January 2005, and currently holds the title of Senior Managing Director, President and Chief
Executive Officer, Countrywide Insurance Group. Prior to joining the Company, Mr. James served as
Executive Vice President of U.S. Insurance Operations for CNA Insurance Companies from June 1998 to
January 2004.
Anne D. McCallion
joined the Company in 1991 and has served in a number of executive
positions. Ms. McCallion was promoted to Managing Director in September 1997, and, in April 2003,
she was promoted to Senior Managing Director, Operations. She currently holds the title of Senior
Managing Director and Deputy Chief Financial Officer.
Laura K. Milleman
joined the Company in 1989 as Budget Director. Having served in a number of
executive positions, Ms. Milleman was appointed Executive Vice President and Chief Accounting
Officer in July 1999. In June 2002, Ms. Milleman was promoted to Managing
Director, Chief
Accounting Officer. She currently holds the title of Senior Managing Director, Chief Accounting
Officer.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Exchange Act requires the Companys directors and executive officers to
report their ownership of and transactions in the Companys common stock to the Securities and
Exchange Commission (SEC) and the New York Stock Exchange (NYSE). Copies of these Section 16
reports are also required to be supplied to the Company and such reports are available on our
website at
www.countrywide.com
. Specific dates for filing these Section 16 reports have been
established by the SEC, and the Company is required to report in this Form 10-K/A any failures of
its directors and executive officers to file by the relevant due date any of these reports during
Fiscal 2007.
Based solely on its review of the copies of the Section 16 reports received by it with respect
to Fiscal 2007, the Company believes that all such filing requirements were satisfied, except as
described below.
Mr. Bartlett did not timely report on Form 4 the equity portion of an incentive plan bonus
received on March 15, 2007. Mr. Bartlett subsequently reported this transaction on a Form 4 filed on May
9, 2007.
4
GOVERNANCE
Code of Business Ethics
The Company has adopted a Code of Business Ethics that applies to all of the Companys
employees, officers and directors, including our principal executive officer, principal financial
officer, principal accounting officer and persons performing similar functions. The Code of
Business Ethics is available on the Companys website at
www.countrywide.com
and is available in
print upon written request to the Companys Secretary. The Company will disclose on its website if
there are any amendments to its Code of Business Ethics or if any waivers to its Code of Business
Ethics are granted to the principal executive officer, principal financial officer, principal
accounting officer or persons performing similar functions. There were no waivers of the Code of
Business Ethics during Fiscal 2007.
Board Committees and Charters
The Boards committees are: Audit and Ethics Committee, Compensation Committee, Corporate
Governance and Nominating Committee, Credit Committee, Finance Committee, Operations and Public
Policy Committee and Special Oversight Committee.
Under a long-standing policy of the Board, each of the Boards committees operates under its
own written charter. All committee charters are available on the Companys website at
www.countrywide.com
and are available in print upon written request to the Companys Secretary.
Audit and Ethics Committee
The Audit and Ethics Committee currently consists of three directors: Martin R. Melone, Robert
T. Parry and Keith P. Russell. During Fiscal 2007, Messrs. Melone, Parry and Russell
served as members of the Audit and Ethics Committee, along with Henry G. Cisneros, who was a
member of the Audit and Ethics Committee through June
13, 2007. The Board has determined that each member of the Audit and Ethics Committee meets the
independence requirements of the NYSEs listing standards and Rule 10A-3(b)(1)
under the Securities
Exchange Act of 1934 (Exchange Act).
The Board has determined that Messrs. Melone, Parry and Russell are audit committee financial
experts, as defined by Item 407 of Regulation S-K. The Board has also determined that each of the
Audit and Ethics Committee members is financially literate under the NYSEs listing standards.
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Item 11.
Executive Compensation
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
During the first quarter of 2007, when we were setting compensation for our named executive
officers, our primary objectives were to motivate key leadership and compensate them for Company
and individual performance. At this time, we had just completed a
record-setting year in 2006, during which net income reached $2.7 billion, or 1,267% higher than
our $196 million in net income for 1996. Our compensation objectives during this period of rapid
growth focused on paying for performance and aligning pay with the interests of our stockholders,
and we were comfortable that our overall compensation practices would ensure sufficient retention
of our key leadership. We also recognized the need to attract and retain the highest level of
executive talent through the payment of competitive compensation, but
we also acknowledged the concerns
of stockholders regarding executive compensation. As a result, in early 2007, we took the
following actions:
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Implemented Mr. Mozilos new employment agreement, which targeted his total
compensation at approximately the 75
th
percentile of compensation for similar executives in our peer group reducing his base salary, target bonus, maximum
bonus, and annual long term incentive award; Mr. Mozilo also received a special
award of restricted stock units (RSUs) in consideration for postponing
his planned retirement
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Entered into an employment agreement with Mr. Sambol, which increased his base
salary and awarded him a one-time promotion bonus of $2.6 million in connection with
his promotion to President and Chief Operating Officer
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Changed the mix of our annual equity award from 100% time-vested stock
appreciation rights (SARs) to 50% time-vested SARs and 50% performance-based RSUs to
further emphasize our objective of paying for performance and aligning pay with our
stockholders interests
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During the second half of 2007, unprecedented disruptions in the U.S. mortgage market and the
global capital markets severely strained the housing market, mortgage lenders and other financial
institutions, including Countrywide. In response, we made a number of important business and
strategy changes, including accelerating the integration of our mortgage banking operations into
our bank subsidiary, significantly changing our underwriting standards, implementing a management
reorganization and staff reductions and obtaining a $2 billion investment by Bank of America
Corporation. These disruptions ultimately resulted in significant inventory valuation adjustments,
increased credit costs and retained interest impairment in 2007 and led us to report a net loss of
$704 million for 2007, our first full-year net loss in more than 30 years. Consistent with our
philosophy of paying for performance:
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None of the named executive officers received a cash bonus under our Annual
Incentive Plan for 2007 because performance fell below threshold targets
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The portion of the April 2007 annual equity award (granted in RSUs) that was scheduled
to vest in the first quarter of 2008 was forfeited because performance fell below
threshold targets
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Total direct compensation in 2007 was below target levels for all of the named
executive officers
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As market
and Company-specific challenges continued during the second half of
2007, we believed that it was
paramount to maintain our key leadership during a time of significant change and transition.
Accordingly, beginning in November 2007, we implemented a retention program to enhance our ability
to retain key employees. Our retention program is described in the section Retention Program on
page 18. Among our named executive officers, only Mr. Gissinger participated in the retention
program in 2007 since he was not a named executive officer at that time. Participation for our
named executive officers was postponed to allow the Compensation Committee to further consider the
appropriate size and form of any retention awards to them under the
program. In January 2008, Bank
of America announced its planned acquisition of Countrywide. In light of the anticipated change in
control, we determined that the retention of key management personnel
was even more important during
this period of transition, and accordingly, included the other named executive officers
6
in our retention program. As part of our retention program,
Messrs. Sieracki, Sambol and Garcia received the following:
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A special grant of cash-settled RSUs that are to vest over three years
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A cash retention payment that was paid on March 14, 2008
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Mr. Mozilo chose not to participate in the retention program.
Oversight and Authority over Executive Compensation
The Compensation Committee
. Under its charter, the Compensation Committee has the sole
authority to determine and approve compensation for our Chief Executive Officer and each
of our other executive officers. The Compensation Committee, which is comprised solely of
independent directors and provides reports to the Board of Directors, oversees our benefit and
incentive plans, evaluates the performance of our executive officers, and reviews and approves our
compensation programs on an annual basis. The Compensation Committee is also responsible for
setting the compensation for the members of our Board of Directors and the board of directors of
our subsidiary, Countrywide Bank, FSB.
With
respect to compensation for each of our named executive officers (other than
Messrs. Mozilo and Sambol), the Compensation Committee, with assistance from its independent
consultant (described below), reviews recommendations from Mr. Sambol regarding compensation targets and goals, considers each
executives
performance in light of the goals set for him or her and determines each executives
compensation. In addition to market compensation data and
other compensation analyses, the Compensation
Committee is provided tally sheets to facilitate its final decisions.
Role of Management in Establishing Compensation
. Mr. Sambol reviews compensation data and
analysis for each component of executive compensation for our named
executive officers (other than with respect to his own
compensation and that of Mr. Mozilo), including target levels and payout amounts for annual
incentive awards. This information, including the competitive information used to support it, is
typically provided by our Human Resources and Compensation and Benefits staff (sometimes with
assistance from managements compensation consultants, described below). Mr. Sambol also discusses
individual performance and recommended compensation levels with other senior executives before
making any final recommendations. Mr. Sambol, following consultation with Mr. Mozilo (and with support
from our Human Resources management and Chief Administrative Officer), then makes recommendations
to the Compensation Committee regarding each component of executive compensation for our named
executive officers (other than with respect to his own compensation and that of Mr. Mozilo). No
executive officer has any role in approving his or her own compensation.
Consultant to the Compensation Committee
. The Compensation Committee has the authority to
retain the services of outside consultants to assist it in performing its responsibilities. In early
2006, the Compensation Committee tightened the independence standards it applied to its
compensation consultants. Since its then-current consultant, Hewitt Associates LLC, also provided
services to the Company, although unrelated to its services for the Compensation Committee, the
Committee terminated its relationship with Hewitt. The Compensation Committee then engaged
Exequity LLP as a compensation consultant. During 2007
,
Exequity provided data on the compensation
and relative performance of peer group companies to the Compensation Committee, recommended
compensation programs, made presentations on regulatory and legislative matters affecting executive
compensation, provided opinions on the degree to which compensation arrangements are consistent
with market practices and our objectives, and consulted on other compensation matters as needed.
Exequity has only provided services to the Compensation Committee since its engagement.
Consultant to Management
. Our management has retained the
services of Towers Perrin Forster &
Crosby, Inc. to assist management with compensation design and analysis for our executive
employees. During 2007, Towers Perrin provided market data to assist management with its
benchmarking of peer group companies, responded to technical and compensation design requests
and assisted with other compensation and benefit matters.
In addition, during 2007 Towers Perrin interacted only with management and did not make any
recommendations to the Compensation Committee or Exequity.
7
Objectives, Components and Review of Executive Compensation
Our compensation objectives consist of:
|
|
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Attracting and retaining the highest level of executive talent through payment of
competitive compensation
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Paying for performance
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Aligning our compensation programs with the interests of our stockholders
|
Depending upon our particular business environment, in different years we may prioritize
different objectives. For instance, during our rapid growth period, we placed primary emphasis on
paying for performance and aligning pay decisions with the interests of our stockholders,
comfortable that our overall compensation practices would ensure sufficient retention of our key
leadership.
Our executive compensation program consists of the following five components:
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Base salary
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Annual incentive awards and other bonuses
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Equity awards
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Benefits and perquisites
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Post-employment compensation and benefits
|
These
components are intended to work together to compensate and reward our named executive
officers based upon the Companys overall performance and each executives individual
performance
during the year. In assessing total compensation, we review each component and consider and
evaluate the mix and value, including benefits and perquisites, in light of the competitive market
for executive talent. We intend for a substantial portion of each named executive officers
compensation to consist of performance-based incentive pay. As a reflection of our objective to
pay for performance, we set 2007 target compensation opportunities such that performance-based
incentive compensation would represent approximately 80 to 90% of the total target compensation for
each of our named executive officers.
Evaluating Competitiveness of Our Compensation Programs
We believe our compensation programs should achieve a mix of performance-based pay while
providing competitive base salaries, benefits and post-employment compensation and benefits for
retention purposes. In order to provide competitive compensation, we (1) review the compensation
levels and practices of a peer group and (2) benchmark all elements of compensation for our named
executive officers. (Our target positioning for each named executive officer is discussed under the
caption Summary of 2007 Compensation Actions beginning on
page 9). Generally, each element of
pay is determined in large part using the target positioning set for each of the named executive
officers. We also review and consider an executive officers potential, scope and breadth of
responsibilities, recent promotions, and internal pay equity when determining certain elements of
compensation such as base salary, annual incentives and equity awards, which can lead to
adjustments from the benchmark data.
Because of the unique nature of our business, there are very few companies of similar size
that operate in each of our various lines of business. Accordingly, and to ensure a robust sample
of data, we consider a group of diversified financial services companies that engage in one or more
of our key business segments: mortgage lending, banking, and investment banking operations. We
generally consider organizations with assets within a reasonable range of our own, since asset size
tends to be the financial metric most closely correlated to pay practices among diversified
financial companies, and is the primary financial measure provided in financial services industry
compensation surveys. We also consider other size and performance measures in assessing potential
peer companies, such as revenues, net income, and market capitalization.
When reviewing pay levels at our peer companies, we gather information about executive
compensation and practices using publicly available information. Since publicly available
information covers a limited number of executive positions, we also review pay levels and pay
practices among a group broader than our peer group of similarly-sized financial services
organizations using published compensation surveys.
The peer group we used to benchmark 2007 compensation was as follows:
8
2007 Peer Group
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American Express Company
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The Bank of New York Mellon Corporation
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Capital One Financial Corp.
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Keycorp
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Lehman Brothers Holdings, Inc.
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Merrill Lynch & Co, Inc.
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National City Corporation
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The PNC Financial Services Group, Inc.
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SLM Corporation
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SunTrust Banks, Inc.
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U.S. Bancorp
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Wachovia Corporation
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Washington Mutual, Inc.
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Wells Fargo & Company
|
The Compensation Committee regularly reviews this group and makes any modifications necessary
to ensure the group most closely resembles our competitive market for executive talent. Given the
evolving business environment and our changing business, the Compensation Committee is continuing
to evaluate possible changes to the peer group for 2008.
Summary of 2007 Compensation Actions
In summarizing 2007 compensation actions, we have provided tables below that illustrate how
the Compensation Committee viewed certain compensation information. The compensation information
in these tables differs from and is not a substitute for the information presented in the Summary
Compensation Table on page 24.
Employment Agreements with Messrs. Mozilo and Sambol
We have entered into employment agreements with both Mr. Mozilo, our Chairman of the Board and
Chief Executive Officer, and Mr. Sambol, our President and Chief Operating Officer, that cover
fiscal years 2007 through 2009. We do not have employment agreements with any other officer of
the Company.
Employment Agreement with Mr. Mozilo
As we discussed in our 2007 proxy statement, in December 2006 we entered into a new employment
agreement with Mr. Mozilo to secure his continued services as our Chief Executive Officer. Mr.
Mozilo planned on retiring at the expiration of his prior agreement
in December 2006, but our Board of Directors
believed it was in our best interests for Mr. Mozilo to continue to serve as our Chief Executive
Officer for an additional three year term.
During our period of significant growth prior to 2007, we targeted Mr. Mozilos base salary,
annual incentives and long-term performance awards at or above the 90th percentile of
compensation for similar executives in our peer group. We chose this position based on Mr.
Mozilos status, knowledge and reputation as a top leader in the industry as well as his
contributions to creating stockholder value over his tenure with us. Under the terms of Mr.
Mozilos new employment agreement, we reduced the targets for Mr. Mozilos base salary, annual
incentive awards and equity awards so that if he achieved the
specified target performance levels, he would be
compensated at approximately the 75th percentile of compensation for similar executives in our
peer group.
The
table below sets forth amounts for the following elements of Mr. Mozilos 2006
actual and 2007 target and actual compensation. All of Mr. Mozilos 2007 compensation was paid
pursuant to the terms of his employment agreement.
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|
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|
|
|
|
|
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|
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2006 (actual) -
|
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|
|
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|
2006 (actual) -
|
|
|
|
|
|
|
|
|
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|
2007 (target) %
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|
|
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|
|
2007 (actual) %
|
Components
|
|
2006 (actual)
|
|
2007 (target)
|
|
Change
|
|
2007 (actual)
|
|
Change
|
Base Salary
|
|
$
|
2,900,000
|
1
|
|
$
|
1,900,000
|
|
|
|
-34
|
%
|
|
$
|
1,900,000
|
|
|
|
-34
|
%
|
Annual Incentive
|
|
$
|
20,461,473
|
|
|
$
|
4,000,000
|
|
|
|
-80
|
%
|
|
$
|
0
|
|
|
|
-100
|
%
|
Equity Awards
|
|
$
|
19,012,000
|
|
|
$
|
10,000,000
|
|
|
|
-47
|
%
|
|
$
|
10,000,036
|
2
|
|
|
-47
|
%
|
Total Direct
Compensation
|
|
$
|
42,373,473
|
|
|
$
|
15,900,000
|
|
|
|
-62
|
%
|
|
$
|
11,900,036
|
|
|
|
-72
|
%
|
9
|
|
|
1
|
|
Reflects Mr. Mozilos annualized base salary for 2006.
|
|
2
|
|
Reflects the annual equity award set by the terms of Mr. Mozilos employment agreement
and does not include the one-time $10 million employment term extension award of RSUs that Mr. Mozilo
received during 2007.
|
2007 Base Salary.
Mr. Mozilos base salary was $1.9 million (a reduction of $1 million from
2006).
2007 Annual Incentive Award.
In prior years, Mr. Mozilos cash bonus pursuant to his
employment agreement was determined by adjusting his previous year incentive by the year-over-year
percentage change in the Companys diluted earnings per share
(EPS), and the formula for his
annual incentive award did not contain target or maximum payout levels. Under the terms of Mr.
Mozilos new employment agreement, his annual incentive award for 2007 was targeted at $4 million
and capped at $10 million. The incentive award is determined by our corporate return on equity,
which is net income divided by stockholders equity (ROE), as shown in the table below. ROE is a measure of performance commonly used by
stockholders, analysts and our management to assess the overall effectiveness and success of
financial service institutions and an incentive plan measure used by
a number of our competitors. We
believe ROE, in combination with net income, is an appropriate assessment of our overall
profitability and our efficiency in generating earnings.
|
|
|
If Companys ROE is
|
|
Mr. Mozilos Share Rate on Net Income Above ROE Target equals
|
<10%
|
|
0.00% of Net Income
|
10%-12%
|
|
0.44% of Net Income over 10% ROE
|
>12%
|
|
0.44% of Net Income between 10% and 12% ROE
|
|
|
plus 0.64% of Net Income over 12% ROE
|
Mr. Mozilo did not earn an annual incentive award for Fiscal 2007 because the Companys ROE
fell below the threshold level.
2007 Annual Equity Award.
The grant date fair value of Mr. Mozilos annual equity award was
$10 million. We granted half of this value in SARs that time-vest ratably over three years, and we
granted the other half in RSUs that vest ratably over three years, so long as the Company achieves
a 12% ROE threshold for the associated fiscal year. Because the Companys ROE was below the 12%
ROE threshold in 2007, one-third of Mr. Mozilos 2007 RSU grant was forfeited.
2007 Special Term Extension Award.
We made a one-time award of RSUs to Mr. Mozilo having a
grant date fair value of $10 million in consideration for Mr. Mozilo postponing his retirement and
extending his term as Chief Executive Officer beyond December 31, 2006. One half of these RSUs
would vest on December 16, 2009 if Mr. Mozilo remains continuously employed by the Company through
this date. The other half of these RSUs would vest if Mr. Mozilo remains continuously employed
through December 16, 2009, but only if (1) our total stockholder return exceeds the 50
th
percentile of total stockholder return performance of the S&P Financial Services Index over the
period from January 1, 2007 through December 31, 2009 and (2) Mr. Mozilo remains continuously
employed with the Company through the vesting date.
Employment Agreement with Mr. Sambol
In March 2007, we entered into a new employment agreement with Mr. Sambol to reflect his
promotion to President and Chief Operating Officer. Mr. Sambols new employment agreement was
negotiated on behalf of the Company by Mr. Mozilo and the Compensation Committee. In 2006, Towers
Perrin conducted a pay study of peer companies for the Company that assessed appropriate pay
positioning for Mr. Sambol given his new role and developed preliminary recommendations based on
that information. Following additional negotiations, the Compensation Committee approved the terms
of Mr. Sambols compensation package and the agreement was endorsed by the Board. The peer group
used by the Compensation Committee while negotiating Mr. Sambols new employment agreement was
identical to the peer group disclosed on page 9.
10
Similar to Mr. Mozilo, we historically targeted Mr. Sambols total compensation at the
75
th
to 90
th
percentile of compensation for similar executives in our
peer group. In Mr. Sambols new employment agreement, we
reduced the target positioning for each
of his compensation elements to the 75
th
percentile of compensation for similar
executives in our peer group. Despite this reduction in target positioning, Mr. Sambol received
increases in his target compensation as a result of benchmarking to his new role as President and
Chief Operating Officer.
The
table below sets forth amounts for the following elements of Mr. Sambols 2006
actual and 2007 target and actual compensation. All of Mr. Sambols 2007 compensation was paid
pursuant to the terms of his employment agreement.
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|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
2006 (actual) -
|
|
|
|
|
|
2006 (actual) -
|
|
|
2006
|
|
2007
|
|
2007 (target) %
|
|
2007
|
|
2007 (actual) %
|
Components
|
|
(actual)
|
|
(target)
|
|
Change
|
|
(actual)
|
|
Change
|
Base Salary
|
|
$
|
1,200,000
|
1
|
|
$
|
1,400,000
|
|
|
|
17
|
%
|
|
$
|
1,400,000
|
|
|
|
17
|
%
|
Annual Incentive
|
|
$
|
5,250,000
|
|
|
$
|
3,870,000
|
|
|
|
-26
|
%
|
|
$
|
2,625,000
|
2
|
|
|
-50
|
%
|
Equity Awards
|
|
$
|
7,705,970
|
|
|
$
|
9,000,000
|
|
|
|
17
|
%
|
|
$
|
9,000,023
|
|
|
|
17
|
%
|
Total Direct
Compensation
|
|
$
|
14,155,970
|
|
|
$
|
14,270,000
|
|
|
|
1
|
%
|
|
$
|
13,025,023
|
|
|
|
-8
|
%
|
|
|
|
1
|
|
Reflects Mr. Sambols annualized base salary for 2006.
|
|
2
|
|
Reflects a special cash bonus of $2.6 million paid in connection with the execution of Mr. Sambols
new employment agreement; Mr. Sambol did not earn an annual incentive award for Fiscal 2007.
|
In addition to the compensation that Mr. Sambol received in 2007, he also participated in our
retention program in January 2008 described in the section
Retention Program on page 18.
2007 Base Salary.
Mr. Sambols base salary was $1.4 million per year, an increase of
$200,000 per year over his salary as Executive Managing Director, Business Segment Operations.
2007 Annual Incentive Award.
For 2007, the target value of Mr. Sambols annual incentive
award of $3.9 million was set at the 75
th
percentile of the compensation for similar
executives in our peer group. The maximum award he was eligible to receive was $6.3 million. Mr.
Sambols annual incentive award is based on ROE as shown in the following table.
|
|
|
If Companys ROE is
|
|
Mr. Sambols Share Rate on Net Income Above ROE Target equals
|
<10%
|
|
0.00% of Net Income
|
10%-12%
|
|
0.275% of Net Income over 10% ROE
|
>12%
|
|
0.275% of Net Income between 10% and 12% ROE plus
|
|
|
0.40% of Net Income over 12% ROE
|
In addition, for 2007, if the Companys EPS was equal to or greater than $4.30 per share, then
Mr. Sambols annual incentive award would have been the greater of $5.25 million or the amount
determined according to the table above. Mr. Sambol did not earn an annual incentive award for
Fiscal 2007 because the Companys ROE fell below the threshold target.
2007 Annual Equity Award.
For 2007, Mr. Sambols annual equity award had a grant date fair value of $9
million. Half of this value was granted in SARs time-vesting ratably over three years and the
other half of the award was granted in RSUs that vest ratably over three years if the 12% ROE
threshold is met for the associated fiscal year. Because the Companys ROE fell below the
threshold level in 2007, one-third of the 2007 RSU grant has been forfeited.
Special Cash Bonus.
Pursuant to the terms of his employment agreement, Mr. Sambol received a
special cash bonus of $2.6 million in 2007. The Compensation Committee determined that, with the
departure of Mr. Sambols predecessor, Mr. Sambol spent a considerable portion of 2006 fulfilling
the additional responsibilities of President and Chief Operating
Officer, while his 2006 incentive plan targets were calibrated to
compensate him under his prior role as Executive Managing Director, Business Segment
11
Operations.
This special cash bonus was intended to compensate Mr. Sambol for the difference
between what he would have earned in 2006 under the incentive plan as President
and Chief Operating Officer versus what he earned in
2006 under the incentive plan in his prior role.
Other Named Executive Officers
We target each element of compensation for Messrs. Sieracki, Garcia and Gissinger (who we
sometimes refer to in this CD&A as the other named executive officers) between the
50
th
and 75
th
percentiles of compensation for similar executives in our
peer group. We also review and consider their potential, the scope and breadth of their
responsibilities, their recent promotions, and internal pay equity when determining certain
elements of compensation such as base salary, annual incentives, and equity awards. While
benchmarking and target positioning offer guidance on relative levels and ranges of compensation
that may be appropriate for a particular executive, the individuals specific performance and
expected contributions are also important.
The
tables below summarize amounts for 2006 actual and 2007 target and actual
compensation for each of the other named executive officers.
Eric P. Sieracki
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 (actual) -
|
|
|
|
|
|
2006 (actual) -
|
|
|
|
|
|
|
|
|
|
|
2007 (target) %
|
|
|
|
|
|
2007 (actual) %
|
Components
|
|
2006 (actual)
|
|
2007 (target)
|
|
Change
|
|
2007 (actual)
|
|
Change
|
Base Salary
|
|
$
|
700,000
|
1
|
|
$
|
726,250
|
|
|
|
4
|
%
|
|
$
|
726,250
|
1
|
|
|
4
|
%
|
Annual Incentive
|
|
$
|
856,350
|
|
|
$
|
1,500,000
|
|
|
|
75
|
%
|
|
$
|
0
|
|
|
|
-100
|
%
|
Equity Awards
|
|
$
|
1,580,903
|
|
|
$
|
2,000,000
|
|
|
|
27
|
%
|
|
$
|
2,750,138
|
2
|
|
|
74
|
%
|
Total Direct
Compensation
|
|
$
|
3,137,253
|
|
|
$
|
4,226,250
|
|
|
|
35
|
%
|
|
$
|
3,476,388
|
|
|
|
11
|
%
|
|
|
|
1
|
|
Reflects Mr. Sierackis annualized base salary for 2006 and 2007, as applicable.
|
|
2
|
|
Includes a special performance-based RSU award of $750,000 as described in the section
2007 Special Awards on page 15.
|
Carlos M. Garcia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 (actual) -
|
|
|
|
|
|
2006 (actual) -
|
|
|
|
|
|
|
|
|
|
|
2007 (target) %
|
|
|
|
|
|
2007 (actual) %
|
Components
|
|
2006 (actual)
|
|
2007 (target)
|
|
Change
|
|
2007 (actual)
|
|
Change
|
Base Salary
|
|
$
|
900,000
|
1
|
|
$
|
933,750
|
|
|
|
4
|
%
|
|
$
|
933,750
|
1
|
|
|
4
|
%
|
Annual Incentive
|
|
$
|
2,696,378
|
|
|
$
|
2,900,000
|
|
|
|
8
|
%
|
|
$
|
0
|
|
|
|
-100
|
%
|
Equity Awards
|
|
$
|
1,580,903
|
|
|
$
|
2,000,000
|
|
|
|
27
|
%
|
|
$
|
2,000,130
|
|
|
|
27
|
%
|
Total Direct
Compensation
|
|
$
|
5,177,281
|
|
|
$
|
5,833,750
|
|
|
|
13
|
%
|
|
$
|
2,933,880
|
|
|
|
-43
|
%
|
|
|
|
1
|
|
Reflects Mr. Garcias annualized base salary for 2006 and 2007, as applicable.
|
12
Andrew Gissinger III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 (actual) -
|
|
|
|
|
|
2006 (actual) -
|
|
|
|
|
|
|
|
|
|
|
2007 (target) %
|
|
|
|
|
|
2007 (actual) %
|
Components
|
|
2006 (actual)
|
|
2007 (target)
|
|
Change
|
|
2007 (actual)
|
|
Change
|
Base Salary
|
|
$
|
650,000
|
1
|
|
$
|
750,000
|
|
|
|
15
|
%
|
|
$
|
750,000
|
1
|
|
|
15
|
%
|
Annual Incentive
|
|
$
|
2,066,843
|
|
|
$
|
2,500,000
|
|
|
|
21
|
%
|
|
$
|
0
|
|
|
|
-100
|
%
|
Equity Awards
|
|
$
|
1,185,677
|
|
|
$
|
2,000,000
|
|
|
|
69
|
%
|
|
$
|
4,149,406
|
2
|
|
|
250
|
%
|
Total Direct
Compensation
|
|
$
|
3,902,520
|
|
|
$
|
5,250,000
|
|
|
|
35
|
%
|
|
$
|
4,899,406
|
|
|
|
26
|
%
|
|
|
|
1
|
|
Reflects Mr. Gissingers annualized base salary for 2006 and 2007, as applicable.
|
|
2
|
|
Includes $2,149,276 in cash-settled RSUs granted to Mr. Gissinger on November 1, 2007
as part of our retention program. See section Retention Program on page
18.
|
In addition to the compensation that Messrs. Sieracki and Garcia received in 2007, they also
participated in our retention program in January 2008 described in the section Retention Program
on page 18. Mr. Gissinger participated in the initial phase of our retention program in November
2007.
Total target direct compensation for each of Mr. Sieracki and Mr. Gissinger increased 35% for
2007, as illustrated in the tables above, although actual compensation fell below target as a
result of Company performance falling below threshold level. The target compensation increase for
Mr. Sieracki reflected his increased role upon the departure of our former President and Chief
Operating Officer, and was intended to position his target compensation more closely with other
chief financial officers within our peer group. Mr. Gissingers target compensation increase
reflected his increased role in managing our mortgage lending operations.
2007 Base Salary
. For Messrs. Sieracki, Garcia and Gissinger, Mr. Sambol recommends base
salaries to the Compensation Committee in connection with annual performance reviews. The
Compensation Committee typically reviews and approves salary increases at a meeting in the first
quarter, with increases effective June 1. Salary changes are based upon the executives
then-current salary, competitive market factors in our peer group, the scope of the executives
responsibilities, Company performance, the executives performance and the executives length of
service in the position.
In June 2007, we increased the salaries of our other named executive officers by approximately
4%, except for Mr. Gissinger who received a 15% increase due to his enhanced role in overseeing our
mortgage lending operations. The 4% increase was consistent with the 2007 annual budget for our
non-executive employees. When we set target compensation for 2007 in the first quarter, we
believed any additional compensation should be performance-based and, therefore, at-risk.
2007 Annual Incentive Awards
. Annual incentive awards in the form of cash bonuses to all of
our named executive officers are made pursuant to a stockholder-approved Annual Incentive Plan
(though a portion of Mr. Mozilos award may be made pursuant to our Supplemental Annual Incentive
Plan) and each award is subject to certain performance criteria. Under special circumstances we
may elect to pay a portion of the annual incentive award in restricted stock to assist with
retention of our executives. Annual incentive awards are paid after fiscal year-end results are
finalized and after the Compensation Committee approves the Companys performance and the named
executive officers achievement of his individual goals and objectives.
Performance measures for annual incentive awards made to Messrs. Sieracki, Garcia and
Gissinger are based on the Companys EPS performance. EPS is another performance measure used
widely in our industry and, we believe, is a readily available and transparent measure for both the
executives who participate in this plan as well as our stockholders. In 2006, Mr. Garcias and Mr.
Gissingers annual incentives were based on a combination of EPS and business unit goals.
Due to management changes in 2006, these executives gained broader organization-wide responsibilities,
and consequently we modified their 2007 annual bonus framework to emphasize EPS rather than
business unit performance. The formulas for the annual incentive awards are recommended by Mr.
Sambol upon consultation with Mr. Mozilo and are then approved by the Compensation Committee. When
Mr. Sambol makes performance recommendations to the Compensation Committee for its approval, he
does so with the belief that achievement of all goals will be:
|
|
|
At least at threshold levels
: More likely than not to occur,
but not certain;
|
|
|
|
|
At target levels
: Challenging, yet achievable; and
|
13
|
|
|
Above target levels
: Unlikely, but not impossible.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual
|
2007 EPS
|
|
$
|
3.30
|
|
|
$
|
4.30
|
|
|
$
|
5.30
|
|
|
|
-$2.03
|
|
2007 Payout as a %
of Target
|
|
|
30
|
%
|
|
|
100
|
%
|
|
|
200
|
%
|
|
|
0
|
%
|
2006 EPS
|
|
$
|
3.80
|
|
|
$
|
4.30
|
|
|
$
|
4.80
|
1
|
|
$
|
4.30
|
|
2006 Payout as a %
of Target
|
|
|
65
|
%
|
|
|
100
|
%
|
|
|
200%
|
1
|
|
|
100
|
%
|
|
|
|
1
|
|
For Mr. Gissinger in 2006, the maximum EPS payout as a percent of
target was 150%. For Mr. Garcia in 2006, the maximum EPS target was $4.55
and the maximum payout as a percent of target was 150%.
|
The calibration of our Annual Incentive Plan payout structure was changed in 2007 to reflect
the difficulty in repeating our record performance in 2006. The 2007 structure required a lower
threshold of performance to achieve an annual incentive payment, but the annual incentive payment
upon achievement of threshold performance was significantly lower. Better performance was required
to achieve the maximum award. We kept the target the same, while expecting it would be more
difficult to achieve that level again. The change to the overall pay-for-performance relationship
and the range was intended to motivate our executives to achieve
superior performance
while maintaining ongoing engagement and focus if results fell below expectations.
In addition to corporate EPS performance, we have developed a talent management index as a
means to measure our enterprise-wide progress to attract, select, manage and retain talent and a
governance index in support of our organization-wide governance structure. An executives annual
incentive earned through the EPS formula can be reduced by up to 10% for failure to achieve each of
these two metrics. The talent management and government indices did not influence 2007 annual incentive
compensation, as no annual incentive awards were received for 2007.
The annual incentive targets and awards for the other named executive officers in 2007 were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual
|
Eric P. Sieracki
|
|
$
|
360,000
|
|
|
$
|
1,500,000
|
|
|
$
|
3,000,000
|
|
|
$
|
0
|
|
Carlos M. Garcia
|
|
$
|
696,000
|
|
|
$
|
2,900,000
|
|
|
$
|
5,800,000
|
|
|
$
|
0
|
|
Andrew Gissinger III
|
|
$
|
600,000
|
|
|
$
|
2,500,000
|
|
|
$
|
5,000,000
|
|
|
$
|
0
|
|
2007 Annual Equity Awards.
Equity incentive awards to our named executive officers are made
pursuant to our stockholder-approved 2000 Equity Incentive Plan and our 2006 Equity Incentive Plan.
Our equity incentive compensation is intended to ensure the retention of our executives throughout
the vesting period and term of the award. In addition, our equity plans are designed to promote a
performance-based culture and align the interests of our executives with those of our stockholders
through equity ownership.
The Compensation Committee annually reviews our equity plans and programs to consider which
equity award vehicles will meet our objectives and create the most efficient long-term incentives,
taking into account stockholder dilution, the rate at which we issue equity under our plans, tax
impact of awards
for the Company and the named executive officer, risk/reward profile of the named executive
officers total compensation package, total expense, compensation practices among our peer group,
and perceived value of the rewards. In determining the appropriate level of equity compensation
for a named executive officer, we determine the appropriate dollar amount of equity compensation
and then convert that value into a specific number of shares, units, options, or SARs, as
applicable, based on the fair market value of our common stock on the date of grant. Using this
methodology, equity compensation has been a key element in achieving our targeted pay objectives.
14
Mr. Sambol recommended annual equity awards for each of the named executive officers (other
than himself and Mr. Mozilo) to the Compensation Committee. The 2007 annual equity grants to
Messrs. Sieracki, Garcia and Gissinger were determined based on individual executive performance
and competitive considerations namely, achieving our targeted positioning of 50
th
to
75
th
percentile of compensation for similar executives in our peer group. Equity
awards for Messrs. Mozilo and Sambol are made pursuant to their employment agreements.
In 2006, our entire annual equity grant was awarded in the form of SARs. In 2007, we altered
our equity mix to 50% time-vested SARs and 50% performance-based RSUs. This change was made for two
primary reasons: (1) we believed that the mix of equity awards granted to Messrs. Mozilo and
Sambol and the other named executive officers should be consistent and should support the same
prospective performance and retention objectives, and (2) we believed there was a demonstrable
need to balance the upside potential of SARs with the retention benefits associated with RSUs.
In addition, because our RSUs are performance-based (given the minimum ROE vesting
requirement), they further support our executive compensation programs pay-for-performance
orientation. The 2007 SAR grant vests in equal installments over three years. These SARs are
stock-settled and allow the holder to receive an amount of our common stock on the exercise date
equal to the appreciation in the value of the common stock since the date of grant. The
Compensation Committee decided to issue SARs rather than stock options because SARs accomplish the
same compensation objectives as stock options, but are less dilutive than options. The 2007 RSUs
vest in equal installments over three years if our ROE exceeds 12% in each year and the executive
is still employed by the Company at the time of vesting. If the annual performance goal is not
met, the RSUs are forfeited. Our ROE for 2007 was below the 12% threshold. Consequently, Messrs.
Sieracki, Garcia and Gissinger each forfeited the portion of the 2007 RSU grant that was scheduled
to vest on April 1, 2008.
2007 Special Awards
. In recognition of Mr. Sieracki taking on additional responsibilities in
2006 following the departure of our former President and Chief Operating Officer, the Compensation
Committee awarded him an additional grant of performance-based RSUs with a grant date value of
$750,000. This award carries the same terms and conditions as described above. In addition, the
value of the award was intended to bring Mr. Sierackis total annual compensation more in line with
compensation provided to other chief financial officers within our peer group and to recognize his
performance after the departure of our former President and Chief Operating Officer. Because
Company performance in 2007 was below threshold level, Mr. Sieracki forfeited the portion of the
RSUs that was scheduled to vest on April 1, 2008.
As discussed below, in November 2007, Mr. Gissinger participated in our retention program in
which he received (1) a special grant of cash-settled RSUs with a grant date fair value of $2.1 million and
which vest 50% after the first anniversary and 25% after each of the second and third
anniversaries, and (2) the right to a cash retention payment in
the amount of $1.3 million, so
long as he remained employed by the Company until March 14, 2008. Since Mr. Gissinger remained
employed by the Company through this date, he received the cash retention payment on March 14,
2008. Mr. Gissinger participated in the initial phase of the retention program because at the time
of the adoption of the program he was not a named executive officer.
Benefits and Perquisites
We believe that offering our named executive officers certain benefits and perquisites
facilitates the operation of our business and assists us in recruiting and retaining key
executives. We believe the benefits to us of providing these benefits and
perquisites outweigh their costs. We also believe that the benefits and perquisites offered to our
named executive officers are generally consistent with practices among companies in our peer group,
as well as large companies within broader industry segments. It is
our intention to periodically
assess our business needs and evolving compensation practices to ensure that our benefit and
perquisite offerings are competitive and in the best interests of our stockholders. During 2006,
we conducted, with Compensation Committee oversight, a thorough review of executive benefits and
perquisites, taking into account the practices of our peer group. In 2006 and 2007, a number of
changes to our benefit and perquisite program were implemented to better align with current and
evolving practices.
The
table below summarizes our key benefit and perquisite programs for our named executive
officers, and additional detail can be found in the Summary
Compensation Table on page 24:
15
|
|
|
|
|
|
|
Perquisite
|
|
Description
|
|
Status
|
|
Named
Executive
Officer Participation
|
|
|
|
|
|
|
|
Auto Program
|
|
Leased auto or
allowance provided
and includes
maintenance and
licensing fees
|
|
Closed to new
participants
effective September
2006
|
|
All named executive officers
|
|
|
|
|
|
|
|
Executive Country Club
Membership
|
|
Payment of
initiation fees and
monthly club dues
|
|
Closed to new
participants
effective September
2006
|
|
Messrs. Mozilo, Sambol,
Sieracki and Gissinger
|
|
|
|
|
|
|
|
Executive Physical Program
|
|
Company-paid
comprehensive
physical
examination
|
|
Active
|
|
All named executive officers
|
|
|
|
|
|
|
|
Executive Financial
Planning Program
|
|
Personal financial
planning services,
including tax
preparation
|
|
Active
|
|
All named executive officers
|
|
|
|
|
|
|
|
Personal Use of Corporate
Aircraft
|
|
Use of Company
aircraft for
personal use
|
|
Active only for CEO
and President & COO
in accordance with
Company security
policy
|
|
Messrs. Mozilo and Sambol
are required to use private
aircraft for all travel
pursuant to Company
security policy, whether
business or personal
|
|
|
|
|
|
|
|
|
|
|
|
Permission required
for all other officers
|
|
Permission required for all
other officers
|
|
|
|
|
|
|
|
Supplemental Disability
|
|
Provides coverage
in excess of
benefits provided
under the Companys
group long term
disability plan
|
|
Active
|
|
Messrs. Sambol, Sieracki, Garcia
and Gissinger
|
|
|
|
|
|
|
|
Executive Life
|
|
Provides coverage
in excess of the
Companys basic
life insurance
coverage
|
|
Active
|
|
Messrs. Sambol,
Sieracki, Garcia and Gissinger
|
|
|
|
|
|
|
|
Post-Employment Compensation and Benefits
Retirement Benefits
We believe that our retirement benefits serve an important role in the retention of our named
executive officers. Each of our retirement benefit plans has been designed to be consistent with
practices among our peer group. The Compensation Committee regularly evaluates the competitiveness
and cost of our plans to ensure that they are consistent with current market practices. Due to
recent changes in market practices, we are currently transitioning from defined benefit to defined
contribution plans; none of our defined benefit plans are available to newly-hired executives.
Each of our named executive officers participates in one or more of a number of our supplemental
programs. The table below describes the retirement benefits that we currently offer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive
|
Benefit Program
|
|
Eligibility
|
|
Benefit
|
|
Rationale
|
|
Officer
Participation
|
|
|
|
|
|
|
|
|
|
Executive
Contribution
Account Plan
|
|
Select executives
who do not
participate in the
Companys
Supplemental
Executive
Retirement Plan
(SERP)
|
|
Annual Company
contribution of
1-5% of eligible
compensation
|
|
Additional source
of post-employment
income. Replacement
for income provided
by the SERP
|
|
Mr. Gissinger
|
|
|
|
|
|
|
|
|
|
Executive Deferred
Compensation Plan
|
|
Employees with base
salary in excess of
$150,000
|
|
May defer up to 50%
of base salary that
exceeds Internal
Revenue Code
compensation limit
and up to 100% of
incentive awards
|
|
Opportunity to plan
for retirement and
defer taxation
|
|
Voluntary participation
All named executive
officers are eligible
|
|
|
|
|
|
|
|
|
|
16
Some of our named executive officers also participate in retirement benefit plans that are no
longer open to new participants.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive
|
Benefit Program
|
|
Eligibility
|
|
Benefit
|
|
Rationale
|
|
Officer Participation
|
|
|
|
|
|
|
|
|
|
Defined Benefit
Pension Plan
|
|
All employees hired
before January 1,
2006
|
|
Defined percentage
of average base
salary
|
|
Source of
post-employment
income
|
|
All named executive
officers
|
|
|
|
|
|
|
|
|
|
Supplemental
Executive
Retirement Plan
(the SERP)
|
|
Certain executives
that were
participants on or
before December 31,
2005
|
|
70% of average
annual salary less
offsets for those
in plan before 1998
and 20% to 33.3% of
average annual
salary for
participants
eligible after 1997
|
|
Additional source
of post-employment
income to restore
benefits lost due
to statutory limits
on the qualified
defined benefit
pension plans
|
|
Messrs. Mozilo,
Sambol, Sieracki
and Garcia
|
Enhanced SERP (Mozilo only)
. As part of Mr. Mozilos employment agreement with us, we have
agreed to provide Mr. Mozilo with an enhanced retirement benefit under the SERP. Mr. Mozilos
enhanced SERP benefit is generally governed by the terms of the regular SERP, with certain
important exceptions. For example, in all cases other than following termination of Mr. Mozilos
employment by the Company for cause, Mr. Mozilos enhanced SERP benefit is measured in terms of
both his base salary and his annual incentive awards. In contrast, benefits under the regular SERP
are based solely on base salary. In order to manage the potential cost of Mr. Mozilos enhanced
SERP, his enhanced SERP benefit cannot exceed an amount equal to $3.0 million per year, less
certain offsets. Mr. Mozilo is currently entitled to receive
payments under the SERP of $2.1
million annually. During 2007, this $2.1 million payment was automatically deferred to optimize
the amount of his annual compensation that we can deduct for Internal Revenue Code §162(m)
purposes.
Severance Benefits
With the exception of Messrs. Mozilo and Sambol, who are entitled to severance payments under
their employment agreements, we do not have special executive agreements or programs for severance
benefits for any named executive officers other than what is provided by:
17
|
|
|
The benefit plans in which the named executive officers participate
|
|
|
|
|
Our general severance policy in non-change in control situations
|
|
|
|
|
Our Change in Control Severance Plan
|
A description of the potential payments to each of our named executive officers triggered upon
termination or a change in control, can be found in the Potential Payments Upon Termination or
Change in Control section on page 41.
Reflecting our belief that stability in the roles of Chief Executive Officer and President and
Chief Operating Officer is vital to the long-term success of our business, the employment
agreements for Messrs.
Mozilo and Sambol provide for severance payments upon termination of their employment in
certain circumstances.
Pursuant to a January 2008 letter agreement with the Company, Mr. Mozilo agreed to waive his
right to receive any cash severance and pro rata bonus payments under his employment agreement upon
a termination of his employment by him for any reason or by the Company without cause (as cause
is defined in his employment agreement) following completion of the anticipated acquisition by Bank
of America. Such severance payments would have equaled approximately $36.4 million.
In addition, effective upon completion of the Bank of America acquisition, Mr. Mozilo agreed
to terminate his consulting agreement with the Company and waive his right to receive consulting
fees totaling $400,000 per year, as well as certain benefits and perquisites (such as use of the
corporate airplane, access to office and secretarial support, financial consulting services and the
payment of country club dues).
Messrs. Sieracki, Garcia and
Gissinger are each participants in our Change in Control Severance Plan. We implemented our
Change in Control Severance Plan in recognition of the importance to us and our stockholders of
avoiding the distraction and potential loss of key management personnel in the event of a rumored
or actual change in control transaction. We adopted our Change in Control Severance Plan in
September 1996 to deliver typical market competitive benefits to all employees,
including our executive officers. The Change in Control Severance Plan, which we have modified
from time-to-time, provides severance payments based on a multiple of salary and bonus, and certain
other benefits (including health and welfare continuation) for each of our employees who is a
participant in the plan and who separates from employment with the Company under certain
circumstances following a change in control (as defined in the Change in Control Severance Plan).
In 2006, our Compensation Committee conducted a review of the Change in Control Severance
Plan. The Compensation Committee retained Hewitt Associates to assess the design of the program and
Lehman Brothers to advise on the appropriate definitional trigger for the change in control
severance protections. While the analysis showed that the basic design of the change-in-control
plan as it applied to the named executive officers was generally consistent with market practices,
Hewitt recommended some adjustments to the plan.
Accordingly, based on a recommendation by the Compensation Committee, the Board of Directors
made several minor changes to the plan. Aside from these minor changes, the Board affirmed the
basic design of the then-existing change-in-control plan in recognition of the continuing
importance to us and our stockholders of avoiding the distraction and potential loss of key
management personnel and other employees in the event of a rumored or actual change in control
transaction.
Retention Program
During
the second half of 2007, our stock price declined to levels below the exercise prices
for our 2004, 2005 and 2006 annual stock option and SAR grants, which severely limited the
incentive value of equity awards as our primary retention vehicle. As a result of this stock price decline and the
uncertainty in our business environment, we believed we were at risk of losing key employees, and
in fact, by the second half of 2007, a number of key employees had resigned or were actively being recruited by other
companies. In response, the Compensation Committee implemented a broad-based retention program
in November 2007 to motivate and retain our key talent. The initial phase of the program excluded the named
executive officers listed in our 2007 proxy statement (Mr. Gissinger
participated in the initial phase of the retention program because at the time he was not a
named executive officer). Although the original intent was to include the
18
named executive officers in the program, the Compensation Committee wanted additional time to consider the appropriate size
and form of the awards made to those individuals. The design of the program was intended to balance a number of objectives, including stock use
commitments to stockholders, available shares in the equity incentive plans, accounting treatment
(especially the accounting impact of using cash-settled RSUs) and overall cost considerations.
In
January 2008, the Compensation Committee expanded the retention
program to make the following benefits available to our
named executive officers, other than Mr. Mozilo, who chose not to participate in the program:
|
|
|
Special Grant of CashSettled RSUs.
Our special grant of RSUs was intended to motivate key employees,
including our named executive officers, to remain with us over the
next three years to assist us in
managing our evolving business, market conditions, and overall macroeconomic developments. To
ensure that awards were considered meaningful by recipients, the values generally reflected each
employees most recent annual equity grant made in April 2007. We placed a greater emphasis on the
first vesting year, so that fifty percent of the restricted stock units vest upon the first
anniversary of grant and twenty-five percent vest upon each of the second and third anniversaries
of grant. In addition, these units would settle in cash to prevent further dilution to
stockholders. These awards vest based only on whether the recipient remains employed with us,
which enhances the retention incentive of these awards.
|
|
|
|
|
Cash Retention Payment.
As described above, our key executives did not receive a cash bonus
for 2007 under our annual incentive program. Nonetheless, the Compensation Committee believed it was
important to acknowledge the contributions of these executives and to send an important message to
them that their recent and ongoing efforts are critical to our operational success. To support
these objectives, the Compensation Committee approved special cash retention payments for key
executives throughout the Company. These awards generally represented 50% of each executives 2007
annual cash incentive target, with certain exceptions to reflect critical skills and extraordinary
contributions during a difficult transition. For example, the Compensation Committee awarded Mr.
Sieracki a cash retention payment equal to 100% of his 2007 target bonus to reflect his significant
contributions during the third and fourth quarters of 2007 when the industrys and Companys
financial challenges were especially acute. The recipients were required to be employed by us
through March 14, 2008 to receive the payment.
|
Under our retention program, the named executive officers received the following retention
awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CashSettled RSUs
|
|
Cash Retention Payment
|
|
|
|
|
|
|
Grant Date Fair
|
|
|
|
|
|
% of 2007
|
Name
|
|
Number of Units
|
|
Value
1
|
|
Amount
|
|
Annual
Incentive Target
|
Angelo R. Mozilo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Sambol
|
|
|
335,126
|
|
|
$
|
2,546,958
|
|
|
$
|
1,935,000
|
|
|
|
50
|
%
|
Eric P. Sieracki
|
|
|
148,945
|
|
|
$
|
1,131,982
|
|
|
$
|
1,500,000
|
|
|
|
100
|
%
|
Carlos M. Garcia
|
|
|
148,945
|
|
|
$
|
1,131,982
|
|
|
$
|
1,450,000
|
|
|
|
50
|
%
|
Andrew Gissinger III
2
|
|
|
148,945
|
|
|
$
|
2,149,276
|
|
|
$
|
1,250,000
|
|
|
|
50
|
%
|
|
|
|
1
|
|
Reflects the number of units multiplied by the fair market value on the date
of grant.
|
|
2
|
|
In addition, as part of our retention program, the exercise
periods of Mr.
Gissingers 2004 and 2005 stock options were extended by two years and one year,
respectively. The aggregate incremental fair value with respect to the extension of
these stock options is $87,094, as determined in accordance with FAS 123R.
|
19
Summary of 2008 Compensation Actions
In March 2008, the Compensation Committee determined the 2008 total target direct compensation
for Messrs. Sieracki, Garcia and Gissinger. The 2008 base salary and equity-based awards for
Messrs. Sieracki, Garcia and Gissinger remain unchanged from 2007 amounts. The 2008 target bonus
amounts for Messrs. Sieracki, Garcia and Gissinger were set at $673,750, $1.8 million and $1.5
million, respectively, which constitute reductions of 55.1%, 39.1% and 42%, respectively, from
their 2007 target bonus amounts. In 2008, the Compensation Committee will consider, in its
discretion, the following performance objectives when determining the actual bonuses for Messrs.
Sieracki, Garcia and Gissinger: operational objectives prior to completion of the planned
acquisition by Bank of America, merger transition objectives, productivity, expense management and
key employee retention. The Compensation Committee may also consider other objectives or criteria
specific to each individual. Other than as noted below, the 2008 compensation levels and annual
incentive awards for Messrs. Mozilo and Sambol remained unchanged from 2007 and are in accordance
with the provisions of their employment agreements.
The 2008 annual equity awards for
Messrs. Sieracki, Garcia, and Gissinger were made pursuant to
our 2006 Equity Incentive Plan and were cash-settled RSUs that vest in equal
installments over three years instead of the SARs and performance-based RSUs granted in 2007. The
Compensation Committee made this change to further enhance retention and since our stockholder-approved stock plans limit the number
of shares available for employee equity awards granted under those plans. The remaining changes
described above were made with the expectation of a continually challenging business environment
during 2008.
Additionally, as we previously reported in an SEC filing, we amended the terms of Mr. Sambols
2008 annual equity award that was provided pursuant to his employment agreement. Under the
terms of the amendment, on April 1, 2008 Mr. Sambol received a performance-based RSU award with a
grant date value of no less than $9.0 million instead of receiving (1) a performance-based RSU
award with a grant date value of no less than $4.5 million and (2) time-vested SAR with a grant
date value of no less than $4.5 million.
Process for Granting Equity Awards
The Compensation Committee usually considers and approves equity awards in the first quarter
of each year at regular or telephonic meetings. Since 2004, the grant date for the awards has been
the first business day in April. In addition, the Compensation Committee has delegated to the Companys
Administrative Committee the authority to grant ad hoc awards for
employees other than our executive officers from an equity pool previously
authorized by the Compensation Committee. In general, the grant date for ad hoc awards is either
(1) the first business day of the month following the month in which a
new employee is hired or the decision to make the award was otherwise
made or (2) if a new
employee is hired on the first business day of the month, the date the new employee is hired. All ad hoc
awards are reported to the Compensation Committee at the next regular meeting. In no case will an
ad hoc award for a newly hired employee be effective prior to the recipients effective date of
employment.
Once each equity grant has been approved by the Compensation Committee, the awards exercise
price is determined under the methodology approved by the Compensation Committee and must be equal
to the fair market value of the Companys common stock on the grant date. Effective January 1,
2007, the fair market value of our common stock has been computed by using the closing market price of
the common stock on
the effective date of the award. It had previously been based on an average of the high and
low prices on the effective date of the award and was changed to better conform to the SECs proxy
disclosure rules.
20
Stock Ownership Guidelines
In 2006, the Compensation Committee established stock ownership guidelines for our executive
officers. These guidelines are designed to encourage our executives to hold a meaningful amount of
our common stock and align their interests with those of our stockholders. The ownership
guidelines are based on job title and, for each title, the recommended level of ownership is either
(1) a fixed share amount or (2) a multiple of salary, whichever is lower. If multiple titles are
held, the ownership guideline is the higher of the two. Shares that count toward satisfying the
guideline include shares held outright, shares held in benefit plans and stock equivalents such as
deferred compensation payable in stock. Executives are encouraged to comply with the guidelines
within five years of their adoption (by 2011) or within five years of becoming an executive
officer.
The table below summarizes each named executive officers progress toward compliance with the
fixed share guidelines as of April 4, 2008. The multiple of salary guidelines have been omitted from the table because
they are currently higher than the fixed share guidelines. Messrs. Mozilo, Sieracki and Garcia
have each surpassed his respective guideline.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Share Amount
|
|
Number of Shares
|
|
|
Name
|
|
(Guideline)
|
|
Owned
|
|
% of Guideline
|
Angelo R. Mozilo
|
|
|
300,000
|
|
|
|
1,093,774
|
1
|
|
|
365
|
%
|
David Sambol
|
|
|
200,000
|
|
|
|
75,278
|
|
|
|
38
|
%
|
Eric P. Sieracki
|
|
|
50,000
|
|
|
|
182,482
|
|
|
|
365
|
%
|
Carlos M. Garcia
|
|
|
50,000
|
|
|
|
507,401
|
|
|
|
1,015
|
%
|
Andrew Gissinger III
|
|
|
50,000
|
|
|
|
1,857
|
|
|
|
4
|
%
|
|
|
|
1
|
|
Excludes 129,891 shares of which Mr. Mozilo disclaims beneficial ownership.
|
Tax Deductibility under Section 162(m) of the Internal Revenue Code
We generally intend for our compensation programs to provide compensation that is tax
deductible to the Company, but we recognize that the best interests of the Company and its
stockholders may at times be better served by compensation arrangements that are not tax
deductible. Our stockholder-approved Annual Incentive Plan is designed and administered to qualify
compensation awarded thereunder as performance-based, and therefore fully deductible pursuant to
Section 162(m) of the Internal Revenue Code. Our 2000 and 2006 Equity Incentive Plans are also
stockholder-approved, and in 2007 we began to award RSUs under those plans that are also intended
to qualify for full deductibility under Section 162(m).
In accordance with their employment agreements, Messrs.
Mozilo and Sambol must defer certain amounts of their compensation
that otherwise would not be currently deductible under Section
162(m). The compensation is deferred until such time as the
limitations of Section 162(m) for Mr. Mozilo or Mr. Sambol no longer
apply.
In March 2007, the Compensation Committee approved a Supplemental Annual Incentive Plan. The
plan was created to provide for payment of any annual incentive award earned by Mr. Mozilo in
excess of $8 million (the limit under the Annual Incentive Plan). Any payment made under the
Supplemental Annual Incentive Plan is not deductible under Section
162(m) and would
be deferred until the limits of Section 162(m) no longer apply to Mr. Mozilo. In addition, the 2008 bonus
program previously discussed
was not established under our stockholder-approved Annual Incentive Plan, and therefore
any awards earned under the 2008 bonus program would not qualify as performance-based compensation under Section 162(m) of the Internal Revenue
Code.
Accounting Standards
Statement of Financial Accounting Standards No. 123R (revised 2004),
Accounting for
Share-Based Payment
, requires a charge to compensation expense for the fair value of equity
compensation awards. Grants of stock options, SARs, RSUs, and restricted shares under the
Companys 2000 and 2006 Equity Incentive Plans are accounted for under FAS 123R. The
Compensation Committee regularly considers the accounting implications of significant compensation
decisions, especially in connection with decisions that relate to Countrywides equity award
programs.
21
Section 409A of the Internal Revenue Code
Internal Revenue Code Section 409A requires nonqualified deferred compensation programs, such
as Countrywides deferred compensation plans, to meet certain requirements regarding risk of
forfeiture and election and distribution timing. The Internal Revenue Service previously issued
proposed regulations regarding the application of Section 409A and companies were expected to
comply in good faith with the proposed regulations. The Company and the Compensation Committee
worked during 2007 to review the final regulations and consider the impact of the changes. While
the affected plans have been operating under good faith compliance, the deadline for compliance
with the final regulations has been postponed to December 31, 2008. In late 2007, the Company
implemented transitional relief provisions that allowed participants to accelerate the distribution
of their 2007 Plan Year incentive deferrals under the Executive Deferred Compensation Plan to
within two weeks of their deferral. Mr. Sambol is the only named executive officer who elected to
take advantage of this distribution acceleration.
22
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Companys Board of Directors has reviewed and discussed the
foregoing Compensation Discussion and Analysis section of this Form 10-K/A with the Companys
management. Based on such review and discussion, the Compensation Committee recommended to the
Board that the Compensation Discussion and Analysis section be included in this Form 10-K/A.
The Compensation Committee
Harley W. Snyder (Chair)
Robert J. Donato
Oscar P. Robertson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 2007, the following individuals served as members of the Compensation Committee:
Harley W. Snyder, Robert J. Donato, and Oscar P. Robertson. Michael E. Dougherty and Henry G.
Cisneros served as members of the Compensation Committee until their separation from the Board on
June 13, 2007 and October 18, 2007, respectively. None of the foregoing individuals has ever
served as an officer or employee of the Company or any of its subsidiaries. No executive officer of
the Company has served as a director or member of the compensation committee of another entity at
which an executive officer of such entity is also a director of the Company.
23
SUMMARY COMPENSATION TABLE
The Summary Compensation Table below summarizes the compensation of the named executive
officers for Fiscal 2007 and Fiscal 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
& Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
Name & Principal
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
Position(1)
|
|
Year
|
|
($)
|
|
($)(2)
|
|
($)(3)(4)
|
|
($)(3)(5)
|
|
($)(6)
|
|
($)(7)
|
|
($)(8)
|
|
($)
|
Angelo R. Mozilo
|
|
|
2007
|
|
|
|
1,900,000
|
|
|
|
|
|
|
|
4,218,539
|
|
|
|
3,400,885
|
(9)
|
|
|
|
|
|
|
1,116,360
|
|
|
|
176,513
|
|
|
|
10,812,297
|
|
Chairman of the
Board and Chief
Executive
Officer
|
|
|
2006
|
|
|
|
2,866,667
|
|
|
|
|
|
|
|
1,103,745
|
|
|
|
26,669,172
|
(9)
|
|
|
20,461,473
|
|
|
|
10,961
|
|
|
|
643,205
|
|
|
|
51,755,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric P. Sieracki
|
|
|
2007
|
|
|
|
715,313
|
|
|
|
|
|
|
|
408,540
|
(10)
|
|
|
816,188
|
|
|
|
|
|
|
|
270,231
|
|
|
|
41,016
|
|
|
|
2,251,288
|
|
Executive
Managing
Director and
Chief Financial
Officer
|
|
|
2006
|
|
|
|
658,333
|
|
|
|
|
|
|
|
|
|
|
|
593,660
|
|
|
|
856,350
|
|
|
|
246,301
|
|
|
|
251,401
|
|
|
|
2,606,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Sambol
|
|
|
2007
|
|
|
|
1,400,000
|
|
|
|
2,625,000
|
(11)
|
|
|
1,050,467
|
|
|
|
4,731,245
|
|
|
|
|
|
|
|
429,454
|
|
|
|
127,400
|
|
|
|
10,363,566
|
|
President and
Chief Operating
Officer
|
|
|
2006
|
|
|
|
1,116,667
|
|
|
|
|
|
|
|
26,118
|
|
|
|
5,111,432
|
|
|
|
5,250,000
|
|
|
|
254,549
|
|
|
|
214,613
|
(12)
|
|
|
11,973,379
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos M. Garcia
|
|
|
2007
|
|
|
|
919,688
|
|
|
|
|
|
|
|
233,452
|
|
|
|
895,830
|
|
|
|
|
|
|
|
319,373
|
|
|
|
47,264
|
|
|
|
2,415,607
|
|
Executive
Managing
Director,
Enterprise Risk
Management and
Governance
|
|
|
2006
|
|
|
|
879,167
|
|
|
|
|
|
|
|
|
|
|
|
875,917
|
|
|
|
2,696,378
|
|
|
|
307,773
|
|
|
|
87,156
|
|
|
|
4,846,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Gissinger III
|
|
|
2007
|
|
|
|
708,333
|
|
|
|
|
|
|
|
390,650
|
|
|
|
785,360
|
|
|
|
|
|
|
|
35,203
|
|
|
|
200,524
|
|
|
|
2,120,070
|
|
Executive
Managing
Director,
Residential
Lending
and Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Mr. Gissinger was not a named executive officer for Fiscal 2006. Accordingly, this table only
reflects his compensation for Fiscal 2007.
|
|
(2)
|
|
Amounts earned by our named executive officers under our Annual Incentive Plan (and, if
applicable, our Supplemental Incentive Plan) are reported in the Non-Equity Incentive Plan
Compensation column. Incentive bonus formulas for such awards are specified in employment
agreements or approved by our Compensation Committee.
|
|
(3)
|
|
The amounts reported reflect the dollar amount recognized for financial statement reporting
purposes in accordance with FAS 123R and may include amounts from equity awards granted
prior to and during the relevant fiscal year. Assumptions used in the calculation of these
amounts are included in Note 2, Summary of Significant Accounting Policies, to our audited
financial statements for Fiscal 2003, 2004, 2005, 2006 and 2007, which are included in our
Annual Reports on Form 10-K for the respective years.
|
|
(4)
|
|
The amounts reported reflect restricted stock awards to the named executive officers granted
pursuant to our 2000 Equity Incentive Plan and restricted stock units (RSUs) granted to the
named executive officers pursuant to our 2000 and 2006 Equity
Incentive Plans.
|
|
(5)
|
|
The amounts reported reflect stock options granted to Mr. Mozilo and stock appreciation
rights (SARs) granted to the other named executive officers pursuant to our 2000 Equity
Incentive Plan in Fiscal 2006 and SARs granted to all of the named executive officers pursuant
to our 2000 and 2006 Equity Incentive Plans in Fiscal 2007. Amounts reported also reflect stock option grants to the
named executive officers pursuant to our 1993 and 2000 Equity
Incentive Plans.
|
|
|
|
Because Mr. Mozilo was eligible for retirement in Fiscal 2006, his Fiscal 2006 equity awards
would have vested pursuant to his previous employment agreement had he retired during Fiscal
2006. As a result, the amount reported for Fiscal 2006 reflects the full grant date fair value
of Mr. Mozilos equity compensation in Fiscal 2006. Mr. Mozilos Fiscal 2007 equity awards
would not have vested upon his retirement pursuant to his 2007 employment agreement and
|
24
|
|
|
|
|
accordingly, the amounts reported for Fiscal 2007 reflect only a portion of the grant date fair
value of Mr. Mozilos equity compensation in accordance
with FAS 123R.
|
|
|
|
In November 2007, the expiration dates of the equity awards made to Mr. Gissinger in Fiscal
2004 and Fiscal 2005 were extended two years and one year, respectively, and, as a result, the
amount reported for Mr. Gissinger includes an additional $87,094 of incremental expense
attributable to this modification. This extension was approved by the Compensation Committee on
November 1, 2007 as part of the Companys retention program.
|
|
(6)
|
|
For Mr. Mozilo, the amounts reported reflect non-equity
incentive plan awards made pursuant to his employment agreement, our Annual Incentive Plan and, if applicable,
our Supplemental Annual Incentive Plan. For Mr. Sambol, the
amounts reported reflect non-equity incentive plan awards made pursuant to his employment agreement and our
Annual Incentive Plan. The amounts reported for Messrs. Sieracki, and Garcia reflect
non-equity incentive plan awards made under our Annual Incentive Plan. The named executive
officers were not awarded amounts for Fiscal 2007 because their performance targets for such
awards were not met.
|
|
(7)
|
|
The amounts reported consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Actuarial Present Value
|
|
Above-Market or
|
|
|
|
|
|
|
|
|
Increase in
|
|
Increase in
|
|
|
|
|
|
Preferential
|
|
|
|
|
|
|
|
|
Actuarial
|
|
Actuarial
|
|
|
|
|
|
Earnings on
|
|
|
|
|
|
|
|
|
Present Value
|
|
Present Value
|
|
Aggregate Change in
|
|
Deferred
|
|
|
|
|
|
|
|
|
Pension Plan
|
|
SERP
|
|
Actuarial Present
|
|
Compensation
|
|
Total
|
Name
|
|
Year
|
|
(a)($)
|
|
(b)($)
|
|
Value ($)
|
|
(c)($)
|
|
($)
|
Angelo R. Mozilo
|
|
|
2007
|
|
|
|
127,749
|
|
|
|
946,313
|
(d)
|
|
|
1,074,062
|
|
|
|
42,298
|
|
|
|
1,116,360
|
|
|
|
|
2006
|
|
|
|
111,789
|
|
|
|
(1,142,406
|
)(e)
|
|
|
(1,030,617
|
)
|
|
|
10,961
|
|
|
|
10,961
|
|
Eric P. Sieracki
|
|
|
2007
|
|
|
|
19,186
|
|
|
|
249,248
|
|
|
|
268,434
|
|
|
|
1,797
|
|
|
|
270,231
|
|
|
|
|
2006
|
|
|
|
23,059
|
|
|
|
222,882
|
|
|
|
245,941
|
|
|
|
360
|
|
|
|
246,301
|
|
David Sambol
|
|
|
2007
|
|
|
|
15,294
|
|
|
|
394,424
|
|
|
|
409,718
|
|
|
|
19,736
|
|
|
|
429,454
|
|
|
|
|
2006
|
|
|
|
20,020
|
|
|
|
230,412
|
|
|
|
250,432
|
|
|
|
4,117
|
|
|
|
254,549
|
|
Carlos M. Garcia
|
|
|
2007
|
|
|
|
23,395
|
|
|
|
293,640
|
|
|
|
317,035
|
|
|
|
2,339
|
|
|
|
319,373
|
|
|
|
|
2006
|
|
|
|
29,273
|
|
|
|
277,927
|
|
|
|
307,200
|
|
|
|
573
|
|
|
|
307,773
|
|
Andrew Gissinger III
|
|
|
2007
|
|
|
|
12,499
|
|
|
|
|
|
|
|
12,499
|
|
|
|
22,704
|
|
|
|
35,203
|
|
|
|
|
(a)
|
|
The amounts reported reflect the actuarial increase in the present value of each
named executive officers benefits under our Defined Benefit Pension Plan, which we refer
to as our Pension Plan.
|
|
(b)
|
|
The amounts reported for Messrs. Mozilo, Sieracki, Sambol and Garcia reflect the
actuarial increase in the present value of each named executive officers benefits under
our Supplemental Executive Retirement Plan (SERP). The amounts reported include amounts
which the named executive officer may not have been entitled to receive in the relevant
fiscal year because such amounts had not yet vested.
|
|
|
|
Mr. Gissinger elected to transfer the present value of his SERP benefit as of
December 31, 2005 to the Executive Contribution Account Plan effective January 1,
2006.
|
|
(c)
|
|
The amounts reported reflect above-market earnings on compensation deferred by
each named executive officer in our Executive Deferred Compensation
Plan. Mr. Gissinger also received above-market earnings on amounts
deferred pursuant to our Executive Contribution Account Plan.
|
|
(d)
|
|
Effective January 1, 2007, Mr. Mozilo commenced receipt of monthly SERP benefits.
Under the SERP, a participant becomes entitled to receive payment of monthly benefits
once the participants age and years of service equal 105. Mr. Mozilo attained such
status in December 2006. Furthermore, because Mr. Mozilos benefit is not deductible by
the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
Internal Revenue Code), his benefits have been deferred until such time that they would
be deductible. The deferred payments are credited with a fixed interest rate determined
annually based on the Moodys Corporate Average available to participants in the
Executive Deferred Compensation Plan. Mr. Mozilos annual SERP benefit as of December
31, 2006 was $2,147,099. This amount will remain unchanged for the
duration of his fifteen years of payments. The increase reflected in this column for
Fiscal 2007 is a result of accrued earnings on the deferred amounts for the year, the
receipt of benefit payments during the year and the discounting of the remaining
payments.
|
|
(e)
|
|
Under the terms of the SERP and his employment agreement,
Mr. Mozilo was entitled to
a maximum SERP benefit of $3,000,000 per year minus the actuarial present value of his
accrued benefits under the Pension Plan and the actuarial present value of Company
contributions to his Executive Deferred Compensation Plan account. For Fiscal 2006, the
actuarial present values of the Pension Plan benefits and Executive Deferred Compensation
Plan Company contributions increased in comparison to their respective Fiscal 2005
values, causing the amount of Mr. Mozilos SERP benefit to decrease by a corresponding
amount in comparison to his Fiscal 2005 SERP
|
25
|
|
|
|
|
benefit amount. As a result, the change in
actuarial present value of Mr. Mozilos SERP benefit for Fiscal 2006 was negative, and,
consequently, the total aggregate change in actuarial present value for both the Pension
Plan and
the SERP Plan was negative. This negative number is not reflected in the Fiscal 2006 total
reported in the Summary Compensation Table for Mr. Mozilo.
|
(8)
|
|
The amounts reported consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites
|
|
|
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
& Other
|
|
|
|
|
|
to Defined
|
|
Life
|
|
|
|
|
|
|
|
|
|
|
Personal
|
|
Tax
|
|
Contribution
|
|
Insurance
|
|
|
|
|
|
|
|
|
|
|
Benefits
|
|
Reimbursements
|
|
Plans
|
|
Premiums
|
|
Other
|
|
Total
|
Name
|
|
Year
|
|
(a)($)
|
|
(b)($)
|
|
(c)($)
|
|
($)
|
|
(d)($)
|
|
($)
|
Angelo R. Mozilo
|
|
|
2007
|
|
|
|
108,028
|
|
|
|
8,798
|
|
|
|
6,750
|
|
|
|
4,560
|
|
|
|
48,377
|
|
|
|
176,513
|
|
|
|
|
2006
|
|
|
|
162,626
|
|
|
|
16,045
|
|
|
|
406,600
|
|
|
|
3,715
|
|
|
|
54,219
|
|
|
|
643,205
|
|
Eric P. Sieracki
|
|
|
2007
|
|
|
|
28,472
|
|
|
|
|
|
|
|
6,750
|
|
|
|
5,794
|
|
|
|
|
|
|
|
41,016
|
|
|
|
|
2006
|
|
|
|
213,395
|
|
|
|
|
|
|
|
33,694
|
|
|
|
4,312
|
|
|
|
|
|
|
|
251,401
|
|
David Sambol
|
|
|
2007
|
|
|
|
113,629
|
|
|
|
1,981
|
|
|
|
6,750
|
|
|
|
5,040
|
|
|
|
|
|
|
|
127,400
|
|
|
|
|
2006
|
|
|
|
117,852
|
|
|
|
18,336
|
|
|
|
31,183
|
|
|
|
5,040
|
|
|
|
42,202
|
|
|
|
214,613
|
|
Carlos M. Garcia
|
|
|
2007
|
|
|
|
32,954
|
|
|
|
|
|
|
|
6,750
|
|
|
|
7,560
|
|
|
|
|
|
|
|
47,264
|
|
|
|
|
2006
|
|
|
|
34,496
|
|
|
|
595
|
|
|
|
45,975
|
|
|
|
6,090
|
|
|
|
|
|
|
|
87,156
|
|
Andrew Gissinger III
|
|
|
2007
|
|
|
|
47,367
|
|
|
|
|
|
|
|
145,509
|
|
|
|
4,648
|
|
|
|
3,000
|
|
|
|
200,524
|
|
|
|
|
(a)
|
|
The amounts reported reflect the aggregate incremental cost of perquisites and other
personal benefits provided to the named executive officers, including the personal use of
Company aircraft, payment of country club memberships, payments for automobiles, paid tax and
investment advice, executive physicals, and recreational activities covered by us while
the named executive officer traveled for business, including the expenses of spouses and
guests. From time to time, the Company makes tickets to cultural and sporting events
available to our named executive officers and other employees for business purposes. If
not utilized for business purposes, they are made available to named executive officers
and other employees for personal use, which use has no incremental cost to the Company.
|
|
|
|
Company Aircraft
: The aggregate incremental cost of personal use of the Companys aircraft
for Mr. Mozilo in Fiscal 2007 was $44,454 and in Fiscal 2006 was $89,939. The aggregate
incremental cost of personal use of the Companys aircraft for Mr. Sambol in Fiscal 2007
was $62,574 and in Fiscal 2006 was $67,545. The aggregate incremental cost of personal use
of the Companys aircraft for Mr. Gissinger in Fiscal 2007 was $73. The Companys
aircraft was not used by the other named executive officers for personal use. The
incremental cost to the Company of personal use of the Companys aircraft is calculated
based on the average variable operating costs to the Company. Variable operating costs
include fuel costs, mileage, maintenance, crew travel expenses, catering and other
miscellaneous variable costs. The total annual variable costs are divided by the annual
number of flight hours the Company aircraft flew to derive an average variable cost per
flight hour. This average variable cost per flight hour is then multiplied by the flight
hours for personal use to derive the incremental cost. The fixed costs that do not change
based on usage, such as pilot salaries, depreciation costs of the Companys aircraft,
hangar expense for the home hangar and general taxes and insurance, are excluded from the
incremental cost calculation.
|
|
|
|
Country Clubs
: The costs for country clubs reported below reflect the total amount of
payments reimbursed to the named executive officer by the Company during Fiscal 2007 and
Fiscal 2006, including business-related usage. Eligible reimbursements included monthly
dues, assessments, fees and business-related meals. The costs to the Company for Fiscal
2007 were as follows: for Mr. Mozilo, $8,581; for Mr. Sieracki, $10,320; for Mr. Sambol,
$11,261; and for Mr. Gissinger, $13,329. The costs to the Company for Fiscal 2006 were as
follows: for Mr. Mozilo, $15,481; for Mr. Sieracki, $209,324, which included a one-time
$200,000 initiation fee; and for Mr. Sambol, $12,697.
|
|
|
|
Automobiles
: The costs for automobiles reported below reflect the total amount of payments
made by the Company during Fiscal 2007 and Fiscal 2006, including business-related usage.
These payments include monthly lease payments or allowances, applicable acquisition costs,
automobile insurance premiums, registration fees and regularly scheduled maintenance and
repair costs. The costs to the Company for Fiscal 2007 were as follows: for Mr. Mozilo,
$23,755; for Mr. Sieracki, $18,152; for Mr. Sambol, $18,119; for Mr. Garcia, $18,504; and
for Mr. Gissinger, $12,000. The costs to the Company for Fiscal 2006 were as follows: for
Mr. Mozilo, $27,010; for Mr. Sieracki, $4,038; for Mr. Sambol, $20,711; and for Mr.
Garcia, $22,682.
|
26
|
|
|
|
|
Paid Tax and Investment Advice
: The costs for paid tax and investment advice reported
below reflect the portion of total fees paid by the Company during Fiscal 2007 and Fiscal
2006. Named executive officers who utilize these services are responsible for 15% of the
total fees. The amounts reported below are paid by the Company and represent the remaining
85% of the total fees. The costs to the Company for Fiscal 2007 were as follows: for Mr.
Mozilo, $31,238; for Mr. Sambol, $21,675; for Mr. Garcia, $14,450; and for Mr. Gissinger,
$14,450. The costs to the Company for Fiscal 2006 were as follows: for Mr. Mozilo,
$30,196; for Mr. Sambol, $10,561; and for Mr. Garcia, $10,561.
|
|
|
|
Executive Physical
: The Company paid for Mr. Gissingers executive physical in Fiscal
2007, and the cost to the Company was $2,454.
|
|
|
|
Guest Expenses
: The costs for guest expenses reported below reflect the payments made on
behalf of or reimbursed to the named executive officers during Fiscal 2007 and Fiscal 2006
for expenses related to spousal or guest recreational expenses. The costs to the Company
for Fiscal 2007 were as follows: for Mr. Gissinger, $5,061. The costs to the Company for
Fiscal 2006 were as follows: for Mr. Sambol, $6,338; and for Mr. Garcia, $1,037.
|
|
(b)
|
|
The amounts reported reflect amounts paid to named executive officers during Fiscal
2007 and Fiscal 2006 for reimbursement of taxes owed with respect to any compensation paid
to the named executive officer, including, but not limited to, perquisites and other
personal benefits (including personal use of the Companys aircraft). Messrs. Mozilo and
Sambol were provided with tax reimbursements associated with spousal travel on the
Companys aircraft for Fiscal 2007 in the amounts of $8,798 and $1,981, respectively, and
for Fiscal 2006 in the amounts of $16,045 and $13,661, respectively. For purposes of
calculating this gross-up amount, personal aircraft usage was valued using a methodology
derived from the Standard Industry Fare Level rules promulgated by the Internal Revenue
Service. Messrs. Sambol and Garcia were provided with tax reimbursements for
personal-related expenses at business-related events for Fiscal 2006 in the amounts of
$4,675 and $595, respectively. Effective January 1, 2007, the Company no longer
reimburses taxes for expenses related to guest attended events. No named executive
officer received tax reimbursements for personal-related expenses at business-related
events for Fiscal 2007.
|
|
(c)
|
|
The amounts reported reflect our contributions to the
named executive officers accounts under our Executive Deferred Compensation Plan, our Executive Contribution
Account Plan and our 401(k) Plan. Beginning with Fiscal 2007, the Company is no longer
making any contributions to the accounts of Messrs. Mozilo, Sieracki, Sambol and Garcia
with respect to the Executive Deferred Compensation Plan. In Fiscal 2007, the Company
made a contribution of $138,759 to the Executive Contribution Account Plan account of Mr.
Gissinger.
|
|
(d)
|
|
The amounts reported reflect contributions made by us to the Director Charitable
Awards Program and the Executive Matching Gift Program.
|
|
|
|
Director Charitable Award Program.
We fund the Director Charitable Award Program through
life insurance policies. The amount for Mr. Mozilo for Fiscal 2007 was $47,377 and for
Fiscal 2006 was $44,219. These amounts were determined by dividing the aggregate of all
life insurance premiums paid by the Company by the number of current
and former directors, including
Directors Emeriti and Mr. Mozilo (but not including Mr. Sambol), eligible to participate
in the Director Charitable Award Program during Fiscal 2007 and
Fiscal 2006.
|
|
|
|
Executive Matching Gift Program.
Until September 2006, the Company matched gifts by named
executive officers to charitable organizations dollar for dollar, up to $50,000 annually
per named executive officer. If the named executive officer was on the governing board of
the organization, the Company would match 3 to 1 up to the $50,000 limit. Since September
2006, the Company has matched gifts by any Company employee to charitable organizations
dollar for dollar, up to $1,000 annually per employee. The costs to the Company for Fiscal
2007 for matching gifts for named executive officers were as follows: for Mr. Mozilo,
$1,000; and for Mr. Gissinger, $3,000 (a one-time exception to our policy was made for a
donation by Mr. Gissinger). The costs to the Company for Fiscal 2006 for matching gifts
for named executive officers were as follows: for Mr. Mozilo, $10,000; and for Mr. Sambol,
$42,202. As described in footnote 12 below, the amount reported for Fiscal 2006 in our
2007 proxy statement for Mr. Sambol was $34,534, which amount did not include a matching
gift of $7,668 made on behalf of Mr. Sambol.
|
(9)
|
|
In our 2007 proxy statement, the compensation reported with respect to Mr. Mozilos option
awards for Fiscal 2006 was reported as $23,047,104. This amount reflected expense
attributable to his April 2004 stock option award with performance-based vesting. Pursuant to
his employment agreement in effect at the time, however, the award is deemed
|
27
|
|
to be time-vested, not performance-based vested, resulting in straight-line expense over the
vesting period. The compensation expense number for Fiscal 2006 and the compensation expense number for Fiscal 2007 reported in this table reflect straight-line expensing of this award.
|
(10)
|
|
On April 2, 2007, Mr. Sieracki received a one-time discretionary award of performance-based
RSUs with a grant date fair market value of $750,000 in consideration for his performance and
expanded duties during Fiscal 2006. The award was made under the 2006 Equity Incentive Plan
and will vest in equal installments over three years, provided the Companys ROE equals or
exceeds 12% in each year and Mr. Sieracki remains employed by the Company. The first
installment for 2007 did not vest because the Companys ROE did not equal or exceed 12% for
Fiscal 2007.
|
(11)
|
|
On March 27, 2007, the Company entered into an employment agreement with Mr. Sambol. Under
that agreement, Mr. Sambol received a cash lump-sum bonus of $2,625,000 in consideration of
his efforts in Fiscal 2006 prior to his promotion to President and Chief Operating Officer of
the Company and his increased responsibilities following such promotion in Fiscal 2007.
|
(12)
|
|
In our 2007 proxy statement, the All Other Compensation reported for Mr. Sambol for Fiscal
2006 was $206,945. This amount did not include a matching gift of $7,668 made on behalf of Mr.
Sambol pursuant to the Companys Matching Gift Program described in footnote 8(d) above. The
amount for Fiscal 2006 has been changed to reflect this correction.
|
28
GRANTS OF PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
Exercise
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Number of
|
|
or Base
|
|
Date Fair
|
|
|
|
|
|
|
Date of
|
|
Non-Equity Incentive Plan
|
|
Estimated Future Payouts Under Equity
|
|
Shares of
|
|
Securities
|
|
Price of
|
|
Value of
|
|
|
|
|
|
|
Committee
|
|
Awards(2)
|
|
Incentive Plan Awards
|
|
Stock or
|
|
Underlying
|
|
Option
|
|
Stock and
|
|
|
Grant
|
|
Approval
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Units
|
|
Options
|
|
Awards (3)
|
|
Option
|
Name
|
|
Date
|
|
(1)
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($/Sh)
|
|
Awards
|
Angelo R. Mozilo
Annual
Incentive Plan
Award
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000,000
|
|
|
|
10,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Incentive Plan
Awards
|
|
|
2/13/07
|
|
|
|
2/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,541
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000,041
|
|
|
|
|
2/13/07
|
|
|
|
2/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,540
|
(4)
|
|
|
|
|
|
|
|
|
|
|
4,999,999
|
|
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
152,766
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000,031
|
|
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
566,894
|
(6)
|
|
|
32.73
|
|
|
|
5,000,005
|
|
Eric P. Sieracki
Annual
Incentive Plan
Award
|
|
|
|
|
|
|
|
|
|
|
360,000
|
|
|
|
1,500,000
|
|
|
|
3,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Incentive Plan
Awards
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,915
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750,008
|
|
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,555
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,065
|
|
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,386
|
(6)
|
|
|
32.73
|
|
|
|
1,000,065
|
|
David Sambol
Annual
Incentive Plan
Award
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,870,000
|
|
|
|
6,250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Incentive Plan
Awards
|
|
|
4/2/07
|
|
|
|
3/26/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,489
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500,015
|
|
|
|
|
4/2/07
|
|
|
|
3/26/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
510,205
|
(6)
|
|
|
32.73
|
|
|
|
4,500,008
|
|
Carlos M. Garcia
Annual
Incentive Plan
Award
|
|
|
|
|
|
|
|
|
|
|
696,000
|
|
|
|
2,900,000
|
|
|
|
5,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Incentive Plan
Awards
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,555
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,065
|
|
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,386
|
(6)
|
|
|
32.73
|
|
|
|
1,000,065
|
|
Andrew Gissinger III
Annual
Incentive Plan
Award
|
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
2,500,000
|
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Incentive Plan
Awards
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,555
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,065
|
|
|
|
|
4/2/07
|
|
|
|
2/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,386
|
(6)
|
|
|
32.73
|
|
|
|
1,000,065
|
|
|
|
|
11/1/07
|
|
|
|
11/1/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148,945
|
(7)
|
|
|
|
|
|
|
|
|
|
|
2,149,276
|
|
|
|
|
11/1/07
|
(8)
|
|
|
11/1/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,776
|
(9)
|
|
|
31.86
|
(10)
|
|
|
38,343
|
(11)
|
|
|
|
11/1/07
|
(8)
|
|
|
11/1/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(9)
|
|
|
34.43
|
(10)
|
|
|
13,800
|
(11)
|
|
|
|
11/1/07
|
(8)
|
|
|
11/1/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,087
|
(9)
|
|
|
32.60
|
(10)
|
|
|
34,951
|
(11)
|
29
|
|
|
(1)
|
|
The awards for the named executive officers approved by the Compensation Committee on
February 28, 2007 and March 26, 2007 were granted on the first business day in April 2007.
|
|
(2)
|
|
For Mr. Mozilo, the amounts reported reflect the target and maximum amounts
payable pursuant to his employment agreement, our Annual Incentive Plan and/or our
Supplemental Annual Incentive Plan.
|
|
|
|
For Mr. Sambol, the amounts reported reflect the target and maximum amounts payable
pursuant to his employment agreement and our Annual Incentive Plan.
|
|
|
|
For Messrs. Sieracki, Garcia and Gissinger the amounts reported reflect the threshold, target
and maximum amounts payable pursuant to each of their individual annual incentive arrangements.
Awards to Messrs. Sieracki, Garcia and Gissinger are made pursuant to our Annual Incentive Plan
with terms approved by the Compensation Committee.
The threshold, target and maximum non-equity incentive awards for each of the named executive
officers are more fully described under the heading Compensation Discussion and Analysis. The
named executive officers were not awarded non-equity incentive plan awards for Fiscal 2007
because their performance targets were not met for Fiscal 2007, as reported in the Non-Equity
Incentive Plan Compensation column of the Summary Compensation Table.
|
|
(3)
|
|
As of January 1, 2007, the exercise price or base price used for our 2000 and 2006 Equity
Incentive Plans is the closing price of our common stock on the date of grant.
|
|
(4)
|
|
In exchange for Mr. Mozilos agreement to extend his term as the Companys Chief Executive
Officer beyond December 31, 2006, he received a one-time RSU award pursuant to the terms of
his employment agreement valued at $10 million on the date of grant. One-half of the award
will vest if he remains continuously employed by the Company through December 16, 2009. The
other half of the award will vest if the Compensation Committee determines that the Companys
total shareholder return for the period January 1, 2007 through December 31, 2009 has exceeded
the 50
th
percentile of total shareholder returns of the companies comprising the
S&P Financial Services Index and Mr. Mozilo remains continuously employed by the Company
through the term of his employment agreement.
|
|
(5)
|
|
Awards of RSUs made under the 2006 Equity Incentive Plan vest in equal installments over
three years, provided the Companys ROE equals or exceeds 12% in each year and the named
executive officer remains employed by the Company. The first tranche of such awards did not
vest in Fiscal 2007 because the performance target was not satisfied. The table reflects the
original number of units issued. The award to Mr. Sieracki with a grant date fair market
value of $750,000 was a one-time discretionary award of performance-based RSUs in
consideration for his performance and expanded duties during Fiscal 2006.
|
|
(6)
|
|
Awards of SARs made under the 2000 and 2006 Equity Incentive Plans vest in equal installments
over three years, provided the named executive officer remains
employed by the Company during the applicable vesting period.
|
|
(7)
|
|
Mr. Gissingers award of RSUs granted under our 2006 Equity Incentive Plan will be settled in
cash and will vest 50% in 2008, 25% in 2009 and 25% in 2010. This grant was approved by the
Compensation Committee as part of the Companys retention program, as more fully described under
the heading Compensation Discussion and Analysis.
|
|
(8)
|
|
The exercise period of the option awards made to Mr. Gissinger in Fiscal 2004 and Fiscal 2005
under our 2000 Equity Incentive Plan were extended by the Compensation Committee on November
1, 2007 as part of the Companys retention program, as more fully described under the heading
Compensation Discussion and Analysis. The original grant dates in order listed on the table
are April 1, 2004, June 15, 2004 and April 1, 2005.
|
|
(9)
|
|
Represents the number of securities underlying Mr. Gissingers Fiscal 2004 and Fiscal 2005
option awards that remained outstanding at the time of the extension described in footnote 8
above.
|
|
(10)
|
|
Represents the original exercise prices of Mr. Gissingers Fiscal 2004 and Fiscal 2005
modified option awards described in footnote 8 above. The exercise prices were not adjusted
due to the modification and are equal to the average of the highest and lowest prices for our
common stock on the date of grant.
|
|
(11)
|
|
Represents the incremental fair value expense of Mr. Gissingers modified awards, as
determined in accordance with FAS 123R.
|
30
Employment Agreements
We have entered into employment agreements with each of Messrs. Mozilo and Sambol as more
fully described under the heading Potential Payments Upon Termination or Change-in-Control and
under the heading Compensation Discussion and Analysis. We do not have employment agreements with
Messrs. Sieracki, Garcia and Gissinger.
Annual Incentive Awards and Bonuses
Other than as described below, annual incentive awards in the form of cash bonuses to our named executive officers are made
pursuant to a stockholder-approved Annual Incentive Plan and each award is subject to certain
performance criteria. Annual incentive awards are paid after fiscal year-end results are finalized
and after the Compensation Committee reviews and approves the Companys performance and the named
executive officers achievement of his or her individual goals and objectives. The named executive
officers annual incentive awards for Fiscal 2007 and Fiscal 2006 are described under the heading
Compensation Discussion and Analysis and shown in the Summary Compensation Table above. The
threshold, target and maximum opportunities in 2007 for each named executive officer are shown in
the Grants of Plan-Based Awards table, as applicable.
The maximum award under our Annual Incentive Plan is $8 million. Pursuant to our employment
agreement with Mr. Mozilo, his annual incentive award may
exceed the plan limit. In 2007, the Compensation Committee approved the creation of a Supplemental Annual Incentive Plan so that any
annual incentive awards made to Mr. Mozilo pursuant to his employment agreement in excess of the
Annual Incentive Plan limit would be made pursuant to our Supplemental Annual Incentive Plan.
Equity Awards and Additional Information
We have provided additional information regarding the compensation we pay to our named
executive officers and our process for granting equity awards under the heading Compensation
Discussion and Analysis.
31
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(2)
|
|
Stock Awards(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
Plan Awards: Market
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Number
|
|
Market Value
|
|
Plan Awards: Number
|
|
or Payout Value of
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
|
|
|
of Shares or
|
|
of Shares or
|
|
of Unearned Shares,
|
|
Unearned Shares,
|
|
|
Underlying
|
|
Underlying
|
|
Option
|
|
|
|
|
|
Units of Stock
|
|
Units of Stock
|
|
Units or Other
|
|
Units or Other
|
|
|
Unexercised
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
That Have Not
|
|
That Have Not
|
|
Rights that Have
|
|
Rights that Have
|
|
|
Options
|
|
Options (#)
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Not Vested
|
|
Not Vested
|
Name
|
|
(#) Exercisable
|
|
Unexercisable
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
Angelo R. Mozilo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123,609
|
(4)
|
|
|
1,105,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123,610
|
(5)
|
|
|
1,105,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104,437
|
(6)
|
|
|
933,666
|
|
|
|
|
1,149,777
|
|
|
|
|
|
|
|
14.69
|
|
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
18.98
|
|
|
|
6/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,400,000
|
|
|
|
|
|
|
|
31.86
|
|
|
|
4/1/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,400,000
|
|
|
|
|
|
|
|
32.60
|
|
|
|
4/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
466,666
|
|
|
|
933,334
|
(7)
|
|
|
36.45
|
|
|
|
4/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
188,964
|
|
|
|
377,930
|
(8)
|
|
|
32.73
|
|
|
|
4/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric P. Sieracki
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,745
|
(6)
|
|
|
140,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,993
|
(6)
|
|
|
187,679
|
|
|
|
|
9,432
|
|
|
|
|
|
|
|
11.68
|
|
|
|
6/1/2008
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,002
|
|
|
|
|
|
|
|
9.94
|
|
|
|
6/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,200
|
|
|
|
|
|
|
|
9.60
|
|
|
|
2/12/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,800
|
|
|
|
|
|
|
|
10.89
|
|
|
|
3/19/2012
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
|
|
|
|
14.69
|
|
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
18.98
|
|
|
|
6/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,776
|
|
|
|
|
|
|
|
31.86
|
|
|
|
4/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,906
|
|
|
|
|
|
|
|
32.60
|
|
|
|
4/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,397
|
|
|
|
108,415
|
(10)
|
|
|
36.45
|
|
|
|
4/3/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,386
|
(11)
|
|
|
32.73
|
|
|
|
3/31/2012
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Sambol
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,994
|
(6)
|
|
|
840,303
|
|
|
|
|
130,543
|
|
|
|
|
|
|
|
13.24
|
|
|
|
2/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,334
|
|
|
|
|
|
|
|
14.69
|
|
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
139,190
|
|
|
|
|
|
|
|
18.98
|
|
|
|
6/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,065,000
|
|
|
|
|
|
|
|
31.86
|
|
|
|
4/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
657,282
|
|
|
|
|
|
|
|
32.60
|
|
|
|
4/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
260,283
|
|
|
|
528,455
|
(10)
|
|
|
36.45
|
|
|
|
4/3/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
170,068
|
|
|
|
340,137
|
(13)
|
|
|
32.73
|
|
|
|
4/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos M. Garcia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,993
|
(6)
|
|
|
187,679
|
|
|
|
|
8,560
|
|
|
|
|
|
|
|
11.68
|
|
|
|
6/1/2008
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,002
|
|
|
|
|
|
|
|
9.94
|
|
|
|
6/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,000
|
|
|
|
|
|
|
|
9.60
|
|
|
|
2/12/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,000
|
|
|
|
|
|
|
|
10.89
|
|
|
|
3/19/2012
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
168,000
|
|
|
|
|
|
|
|
14.69
|
|
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,000
|
|
|
|
|
|
|
|
18.98
|
|
|
|
6/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131,432
|
|
|
|
|
|
|
|
31.86
|
|
|
|
4/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
129,450
|
|
|
|
|
|
|
|
32.60
|
|
|
|
4/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,397
|
|
|
|
108,415
|
(10)
|
|
|
36.45
|
|
|
|
4/3/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,386
|
(11)
|
|
|
32.73
|
|
|
|
3/31/2012
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Gissinger III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148,945
|
(14)
|
|
|
1,331,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,993
|
(6)
|
|
|
187,679
|
|
|
|
|
47,588
|
|
|
|
|
|
|
|
9.94
|
|
|
|
6/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,550
|
|
|
|
|
|
|
|
9.60
|
|
|
|
2/12/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,952
|
|
|
|
|
|
|
|
10.89
|
|
|
|
3/19/2012
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
|
|
|
|
14.69
|
|
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
18.98
|
|
|
|
6/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,776
|
|
|
|
|
|
|
|
31.86
|
|
|
|
4/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
34.43
|
|
|
|
6/15/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,087
|
|
|
|
|
|
|
|
32.60
|
|
|
|
4/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,048
|
|
|
|
81,311
|
(10)
|
|
|
36.45
|
|
|
|
4/3/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,386
|
(11)
|
|
|
32.73
|
|
|
|
3/31/2012
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
(1)
|
|
The outstanding equity awards do not include the first tranche of the performance-vested RSUs
granted in April 2007 to each of the named executive officers, which tranche was forfeited
because the performance targets for those RSUs were not satisfied. Unless otherwise stated in
the footnotes below, the outstanding equity awards were granted pursuant to our 2000 Equity
Incentive Plan.
|
|
(2)
|
|
Stock options granted to the named executive officers prior to Fiscal 2004 have an exercise
period of ten years. Stock options granted during and after Fiscal 2004 to named executive
officers other than Mr. Mozilo have an exercise period of five years, except that stock
options granted to Mr. Gissinger in 2004 and 2005 had exercise periods extended to 2011. Stock
options granted to Mr. Mozilo during and after Fiscal 2004 have an exercise period of ten
years in accordance with Mr. Mozilos employment agreements. All SARs granted to the named
executive officers have an exercise period of five years.
|
|
(3)
|
|
The closing price of our common stock on December 31, 2007 was $8.94. All outstanding awards
of RSUs were made pursuant to our 2006 Equity Incentive Plan.
|
|
(4)
|
|
Consists of RSUs that vest on December 16, 2009. Includes accumulated dividend equivalents.
|
|
(5)
|
|
Consists of RSUs that vest if Mr. Mozilo remains continuously employed through December 16,
2009, but only if (1) our total stockholder return exceeds the 50
th
percentile of
total stockholder return performance of the S&P Financial Services Index over the period from
January 1, 2007 through December 31, 2009 and (2) Mr. Mozilo remains continuously employed by
the Company through the vesting date. Includes accumulated dividend equivalents.
|
|
(6)
|
|
Consists of RSUs that vest in equal installments over three years, provided the Companys ROE
equals or exceeds 12% in each year and the named executive officer remains employed by the
Company. Because the performance target was not satisfied, one-third of the April 2007
performance-based RSU award has been forfeited. Includes accumulated dividend equivalents.
|
|
(7)
|
|
Consists of stock options that vest ratably over a three-year period. One-third of the
original award vested on April 1, 2007, one-third vested on April 1, 2008 and the
remaining one-third will vest on April 1, 2009.
|
|
(8)
|
|
Consists of stock-settled SARs that vest ratably over a three-year period. One-third of the
original award vested on December 16, 2007, one-third will vest on December 16, 2008 and the
remaining one-third will vest on December 16, 2009.
|
|
(9)
|
|
Consists of stock options granted pursuant to our 1993 Equity Incentive Plan.
|
|
(10)
|
|
Consists of stock-settled SARs that vest ratably over a three-year period. One-third of the
original award vested on April 1, 2007, one-third vested on April 1, 2008 and the remaining
one-third will vest on April 1, 2009.
|
|
(11)
|
|
Consists of stock-settled SARs that vest ratably over a three-year period. One-third of the
original award vested on April 1, 2008, one-third will vest on April 1, 2009 and the remaining
one-third on April 1, 2010.
|
|
(12)
|
|
Consists of SARs granted pursuant to our 2006 Equity Incentive Plan.
|
|
(13)
|
|
Consists of stock-settled SARs that vest ratably over a three-year period. One-third of the
original award vested on December 31, 2007, one-third will vest on December 31, 2008 and the
remaining one-third on December 31, 2009.
|
|
(14)
|
|
Consists of RSUs that will be settled in cash and will vest 50% on November 1, 2008, 25% on
November 1, 2009 and the remaining 25% on November 1, 2010. These RSUs were granted in
connection with the Companys retention program as more fully described under the heading
Compensation Discussion and Analysis.
|
33
OPTION EXERCISES AND STOCK VESTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
Value Realized on
|
|
Number of Shares Acquired
|
|
|
|
|
Acquired on Exercise
|
|
Exercise
|
|
on Vesting
|
|
Value Realized on Vesting
|
Name
|
|
(#)(1)
|
|
($)
|
|
(#)
|
|
($)
|
Angelo R. Mozilo
|
|
|
4,922,588
|
|
|
|
121,502,318
|
|
|
|
|
|
|
|
|
|
Eric P. Sieracki
|
|
|
16,708
|
|
|
|
537,568
|
(2)
|
|
|
|
|
|
|
|
|
David Sambol
|
|
|
203,625
|
|
|
|
4,793,430
|
|
|
|
|
|
|
|
|
|
Carlos M. Garcia
|
|
|
154,576
|
|
|
|
5,268,846
|
|
|
|
|
|
|
|
|
|
Andrew Gissinger III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
During Fiscal 2007, Messrs. Mozilo, Sambol and Garcia informed us that they exercised
options and sold shares of our common stock pursuant to written trading plans intended to
comply with the requirements of Rule 10b5-1 of the Exchange Act.
|
|
(2)
|
|
In Fiscal 2007, Mr. Sieracki exercised 16,708 stock options through a stock swap exercise,
receiving 13,806 new shares of common stock in return. No shares of common stock were sold as
part of this transaction.
|
34
PENSION BENEFITS
The table below shows the present value of accumulated benefits payable to each of the named
executive officers as of December 31, 2007, including the number of years of service credited to
each such named executive officer, under the Defined Benefit Pension Plan (the Pension Plan) and
the Supplemental Executive Retirement Plan (the SERP), as more fully described following the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
|
|
|
|
|
|
|
Number of Years
|
|
Present Value of
|
|
During Last
|
|
|
|
|
|
|
of Credited Service
|
|
Accumulated Benefit
|
|
Fiscal Year
|
Name
|
|
Plan Name
|
|
(#)(1)
|
|
($)(2)(3)
|
|
($)
|
Angelo R. Mozilo
|
|
Pension Plan
|
|
|
38.667
|
|
|
|
1,476,328
|
|
|
|
|
|
|
|
SERP
|
|
|
13.83333
|
|
|
|
23,363,268
|
|
|
|
2,147,099
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric P. Sieracki
|
|
Pension Plan
|
|
|
18
|
|
|
|
240,877
|
|
|
|
|
|
|
|
SERP
|
|
|
13.83333
|
|
|
|
1,097,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Sambol
|
|
Pension Plan
|
|
|
22
|
|
|
|
257,202
|
|
|
|
|
|
|
|
SERP
|
|
|
13.83333
|
|
|
|
2,128,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos M. Garcia
|
|
Pension Plan
|
|
|
23
|
|
|
|
349,043
|
|
|
|
|
|
|
|
SERP
|
|
|
13.83333
|
|
|
|
1,482,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Gissinger III
|
|
Pension Plan
|
|
|
9
|
|
|
|
96,158
|
|
|
|
|
|
|
|
SERP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Pension Plan.
Mr. Mozilos number of years of credited service with respect to the Pension
Plan is equal to his years of service with the Company. Each of the other named executive
officers number of years of credited service with respect to the Pension Plan is one year
less than his actual years of service with the Company. This difference is due to a change in
the Pension Plan participation rules effective for participants hired after February 1983.
|
|
|
|
SERP.
Each named executive officer who participates in the SERP has been credited with 13.8333
years of service, which is the number of years from March 1, 1994 (the date the SERP commenced
and the date such named executive officers began their participation), to December 31, 2007.
|
|
(2)
|
|
Mr. Mozilo is fully vested in the SERP. Each of the other named executive officers who
participate in the SERP is not currently entitled to receive the SERP amounts reported
because his amount has not yet vested. The SERP vesting dates for each of Messrs.
Sieracki, Sambol and Garcia are August 13, 2011, December 7, 2014 and October 10, 2010,
respectively. Mr. Gissinger does not participate in the SERP. Instead, he participates in the
Companys Executive Contribution Account Plan.
|
|
(3)
|
|
The amounts reported reflect the actuarial present value of a named executive officers
accumulated benefit under the Pension Plan and the SERP, if applicable, computed as of the
same pension plan measurement date used for our audited financial statements for Fiscal 2007
and using interest rate assumptions consistent with those disclosed in Note 20, Employee
Benefits, to our audited financial statements for Fiscal 2007, which are included in our Form
10-K for Fiscal 2007.
|
|
|
|
The amount reported for Mr. Mozilo includes $2,147,099 in SERP payments for Fiscal 2007 that
have been deferred and earnings of $61,483 on that deferred amount during Fiscal 2007.
|
|
(4)
|
|
Under the SERP, a participant becomes entitled to receive payment of monthly benefits once
the participants age and years of service equal 105. Mr. Mozilo attained such status in
December 2006. In January 2007, Mr. Mozilo was entitled to begin receiving his SERP benefit
of $2,147,099 per year, to be paid out over fifteen years. Because Mr. Mozilos benefit is
not deductible by the Company under Section 162(m) of the Internal Revenue Code, the benefit
payments he is entitled to receive have been deferred until such time that they would be
deductible. The deferred payments are credited with a fixed interest rate determined annually
based on the Moodys Corporate Average available to participants in the Executive Deferred
Compensation Plan.
|
Pension Plan
Our
Pension Plan is a funded tax qualified defined benefit pension plan
that provides a lifetime
annuity to vested participants commencing upon attainment of a normal retirement age of 65.
Participants are eligible for early commencement of benefits upon attainment of age 55 or any age
after 55 but prior to 65 if they have at least eleven years of credited service. The Pension Plans
terms and conditions are applicable to all participants in the Pension Plan, including the named
executive officers.
35
Until 2006, the Company provided the Pension Plan to all eligible employees, payable as a
lifetime annuity. Effective January 1, 2006, eligibility was revised to include only those
employees hired by December 31, 2005. Although the Pension Plan is not available to new employees,
existing employees hired prior to January 1, 2006, including each of the named executive officers,
continue to accrue additional benefits under the Pension Plan.
The
compensation used to calculate pension benefits at termination is the average of the
highest five consecutive years of eligible compensation out of the last ten years before termination. Benefits are calculated by multiplying years of credited service by that average.
Subject to a $225,000 limitation for Fiscal 2007 under the Internal Revenue Code, the amounts shown
in the Salary column of the Summary Compensation Table would be used to calculate the
retirement benefit for each of the named executive officers. Benefits are 100% vested after five
years of service, with each year of service credited to a participant upon the completion of at
least 1,000 hours of service during a year. Each of the named executive officers has accrued five
years of credited service under the Pension Plan, making their benefits fully vested. Mr. Mozilo is
currently eligible for retirement.
Benefits are payable to retirees and beneficiaries as a monthly annuity, but participants may
elect to receive the portion of their benefit accrued as of March 1, 1982, if any, in the form of a
lump sum. Monthly benefits will be reduced by
1
/180 for each of the first sixty months
and
1
/360 for each additional month by which benefit payments commence prior to age 65.
Maximum benefit amounts payable to participants are subject to tax qualified plan limitations.
If a vested participant dies prior to commencement of benefit payments, a surviving spouse
will receive a portion of the benefit the participant would have received upon retirement. If a
participant dies after commencement of benefit payments, continuation of benefit payments to a
beneficiary will be determined by the form of payment elected at retirement.
Certain provisions in the Pension Plan become effective upon a change in control (as defined
in the Pension Plan). These provisions provide that a participant will become fully vested if
terminated for reasons other than cause (as defined in the Pension Plan) within two years
following a change in control.
Supplemental Executive Retirement Plan
We have adopted a SERP, effective March 1, 1994. The SERP provides the named executive
officers, other than Messrs. Mozilo and Gissinger, with annual supplemental retirement income equal
to 70% of their average annual salary. This average annual salary is determined by averaging the
five highest consecutive salaried years out of the ten years preceding termination. Mr. Mozilo is entitled to
receive enhanced supplemental retirement benefits under the SERP as discussed under the heading
Compensation Discussion and Analysis and under the heading Enhanced Supplemental Executive
Retirement Plan below.
Concurrent with the change in eligibility for the Pension Plan, eligibility for the SERP was
revised to include only those executives who participated as of December 31, 2005. Each of the
named executive officers chose to continue to participate in the SERP except for Mr. Gissinger, who
elected to transfer his participation to the Companys Executive Contribution Account Plan.
Participants in the SERP vest upon the earliest of the following: (i) attainment of at least
age 55 and completion of five years of plan participation; (ii) onset of a disability (as defined
in the SERP); (iii) a change in control of the Company (as defined in the SERP); or (iv) death.
Effective June 1, 2007, the SERP was amended to provide for the payment of a benefit upon the death
of a terminated plan participant, provided the participant had a vested benefit at the time of
termination from the Company. The monthly
benefit payments will be made to the participants beneficiary for 15 years commencing on the
date the participant would have reached age sixty five. This change was made to be consistent with
the provisions of the Companys Pension Plan and the Executive Deferred Compensation plans.
Benefits under the SERP are paid for fifteen years and are reduced by the actuarially
equivalent benefits the participant receives from (i) payments under the Pension Plan; and (ii) the
Companys contributions to the participants deferred compensation account. Company contributions
to a participants deferred compensation account are reflected in the All Other Compensation
column of the Summary Compensation Table.
Enhanced Supplemental Executive Retirement Plan
As part of Mr. Mozilos employment agreement with the Company, we agreed to provide Mr. Mozilo
with an enhanced supplemental retirement benefit under the SERP (the Enhanced SERP). The Enhanced
SERP is generally governed by the terms of the SERP, with certain exceptions. In all cases (other
than following the termination of Mr. Mozilos employment by the Company for cause as defined in
his employment agreement) the Enhanced SERP is designed to provide Mr. Mozilo
36
with annual retirement income equal to 60% of the average of his annual base salary and bonus for three fiscal
years in which he earns the highest combined annual base salary and annual bonus during the ten
fiscal years preceding his termination of employment with the Company. Benefits under the regular
SERP are based solely on base salary and do not include consideration for bonuses. Mr. Mozilos
annual Enhanced SERP benefit as of December 31, 2006 has been calculated to be $2,147,099. This
amount will remain unchanged for the duration of his fifteen years of payments.
401(k) Savings and Investment Plan
Our 401(k) Savings and Investment Plan (the 401(k) Plan) is a Company-sponsored
tax-qualified defined contribution plan. The 401(k) Plan allows eligible employees to supplement
their savings and retirement accounts through tax-deferred contributions. All Company employees who
have attained the age of 21 are eligible to participate immediately upon hire. Effective February
1, 2006, each of the named executive officers may contribute a maximum of six-percent of their
eligible compensation. We also provide matching contributions and discretionary contributions to
eligible participants. We modified our 401(k) Plan following the
revision in eligiblity of the Pension Plan to
permit us to make such discretionary contributions to eligible participants. Participants in the
401(k) Plan are eligible to receive matching contributions from the Company following completion of
one year of service and at least 1,000 hours of work. We currently match 50% of the first six
percent of eligible compensation contributed by an eligible participant.
37
NONQUALIFIED DEFERRED COMPENSATION
The following table provides information on compensation deferred by the named executive
officers on a basis that is not tax-qualified, including earnings on our Executive Deferred
Compensation Plan and our Executive Contribution Account Plan.
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Executive
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Registrant
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Aggregate
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Aggregate
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Contributions
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Contributions in
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Aggregate Earnings in
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Withdrawals/
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Balance at
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Name
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|
in Last FY
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Last FY
|
|
Last FY
|
|
Distributions
|
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Last FYE
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(1)
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|
($)(2)
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|
($)(3)
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($)(4)
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($)
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($)(5)
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Angelo R. Mozilo
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885,262
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2,991,004
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16,429,249
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(6)
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Eric P. Sieracki
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218,770
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59,648
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173,914
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1,246,227
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David Sambol
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1,050,000
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450,300
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8,232,530
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Carlos M. Garcia
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51,709
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917,856
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Andrew Gissinger III
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2,021,228
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118,464
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502,543
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9,334,028
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(1)
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Each of the named executive officers is a participant in the
Executive Deferred Compensation Plan. Mr. Gissinger also participates in the Executive Contribution
Account Plan.
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(2)
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For Mr. Sieracki, the amounts include $47,500 of salary for Fiscal 2007, which amount is
reported in the Summary Compensation Table.
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For named executive officers who elected to defer portions of their Fiscal 2006 non-equity
incentive plan compensation, amounts in this column also include those deferrals. The Company
distributes non-equity incentive plan compensation in March of the year following the year in
which it is earned. For Messrs. Sieracki and Sambol, the amounts include $171,270 and
$1,050,000, respectively, of non-equity incentive plan compensation earned in Fiscal 2006, but
paid and credited to such named executive officers Executive Deferred Compensation Plan
account in Fiscal 2007. For Mr. Gissinger, the amount includes $2,021,228 of non-equity
incentive plan compensation earned in Fiscal 2006, but paid and credited to his Executive
Contribution Account Plan account in Fiscal 2007.
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(3)
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Beginning with Fiscal 2007, the Company is no longer making any contributions to the accounts
of Messrs. Mozilo, Sieracki, Sambol and Garcia with respect to the Executive Deferred
Compensation Plan.
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For Mr. Gissinger, the amount reported includes the Companys annual contribution pursuant to
the Executive Contribution Account Plan for Fiscal 2006 in the amount of $118,464 because that
amount was credited to Mr. Gissingers account in Fiscal 2007. It does not include the
Companys annual contribution pursuant to the Executive Contribution Account Plan for Fiscal
2007 in the amount of $138,759 because that amount was credited to Mr. Gissingers account in
Fiscal 2008. The Companys annual contribution pursuant to the Executive Contribution Account
Plan for Fiscal 2007 is included in the All Other Compensation column of the Summary
Compensation Table.
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(4)
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For Messrs. Mozilo, Sieracki, Sambol, Garcia and Gissinger, $42,298, $1,797, $19,736, $2,339
and $22,704, respectively, was reported as above-market earnings on deferred compensation in
the Summary Compensation Table.
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(5)
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For Messrs. Mozilo, Sieracki and Sambol, the aggregate balance includes $1,851,667, $76,000,
and $101,667, respectively, of salary for Fiscal 2006, which amounts were previously reported
in the Summary Compensation Table.
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(6)
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The aggregate balance for Mr. Mozilo at the end of Fiscal 2006 was understated by $391,682 in
the Companys 2007 proxy statement. As corrected, the aggregate balance of nonqualified
deferred compensation for Mr. Mozilo at the end of Fiscal 2006 was $20,996,559.
|
Executive Deferred Compensation Plan
The Executive Deferred Compensation Plan provides senior management the opportunity to defer
receipt of up to 50% of their base salary that exceeds the limitations described in Section
401(a)(17) of the Internal Revenue Code and up to 100% of their non-equity incentive plan
compensation. Deferral elections are made for each plan year and do not roll over into subsequent
plan years. Each of the named executive officers is a participant in the
Executive Deferred Compensation Plan. Mr. Gissinger also participates in the Executive Contribution
Account Plan.
Participants receive earnings on deferred amounts based upon the performance of their
selection of available investment options, which are listed in the table below. These investment
options provide a way for the Company to measure investment returns and do not reflect any actual
investment by us on behalf of the participants. We retain the right
to change the available investment options.
38
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One-Year
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Asset Class
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|
Fund Offering
|
|
Return
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Intermediate Term Bond
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PIMCO Total Return C
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|
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7.77
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%
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Lehman US Government/Credit Intermediate
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7.40
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%
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Large Cap Equity Blend
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|
DWS Equity 500 Index Inv
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5.39
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%
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S&P 500
|
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|
5.49
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%
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Small Cap Equity Blend
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DWS VIT Small Cap Index: CI A
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-1.90
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%
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Russell 2000
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-1.57
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%
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International Equity
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|
International Value
|
|
|
6.25
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%
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|
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MSCI EAFE Index
|
|
|
11.63
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%
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Money Market
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|
Moodys Corporate Average
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|
|
6.07
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%
|
We have made discretionary contributions to the Executive Deferred Compensation Plan for those
participants who also participate in the SERP, but effective for Fiscal 2007, we discontinued
making discretionary contributions. These discretionary contributions reduce the benefits paid to
the SERP participants and vest at the same time the participants vest in their SERP benefit. All of
our discretionary contributions are deemed to be invested in the Money Market asset class. In the
event of our insolvency or bankruptcy, participants in the Executive Deferred Compensation Plan
would be unsecured general creditors of the Company. When payments become due, cash is distributed
from either the general assets of the Company or any associated grantor trust.
Unless earlier distributed, a participants vested account balance under the Executive
Deferred Compensation Plan would be paid in a lump sum within 60 days of his or her termination of
employment. If a named executive officer has satisfied the Executive Deferred Compensation Plans
definition of early retirement (which is the attainment of age 55 and at least eleven years of
service to the Company), the named executive officer may elect to have his vested account balance
paid in an annuity over five, ten or fifteen years.
The Executive Deferred Compensation Plan allows a plan participant to receive distributions
prior to termination of his or her employment if the participant elects to receive such in-service
distributions at the time the participant makes his or her deferral elections. Otherwise,
pre-termination distributions are allowed only if the participant experiences an unforeseeable
emergency or a severe financial hardship. Absent an unforeseeable emergency or a severe financial
hardship, pre-2005 deferrals and vested contributions may also be distributed to the participant,
subject to a 10% reduction of the portion so distributed, if the participant asks the Compensation
Committee for such a distribution.
These distribution rules are subject to Section 409A of the Internal Revenue Code, including,
for example, the rule that a specified employee may not receive a distribution of post-2004
deferrals and contributions until at least six months following termination of employment; all of
the named executive officers were specified employees under Section 409A at the end of the last
fiscal year.
Executive Contribution Account Plan
Our Executive Contribution Account Plan is a nonqualified defined contribution plan providing
benefits to eligible executives of the Company, so long as they are not participants in the SERP.
Effective January 1, 2006, the SERP was closed to new participants. Existing SERP participants were
permitted to either remain in the SERP or transfer into the Executive Contribution Account Plan
effective January 1, 2006. SERP participants who elected to transfer to the Executive Contribution
Account Plan received an opening balance in the Executive Contribution Account Plan equivalent to
the present value of their SERP accrued benefit calculated as of December 31, 2005. Of the named
executive officers, only Mr. Gissinger elected to transfer his participation to the Executive
Contribution Account Plan. The Executive Contribution Account Plan was effective January 1, 2006.
Participants in the Executive Contribution Account Plan receive earnings on deferred amounts
based on the performance of their selection of available investment options, which are listed in
the table below. These investment options provide a way for us to measure investment returns and do
not reflect any actual investment by us on behalf of the participants. We retain the right to
change, at our discretion, the available investment options.
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One-Year
|
Asset Class
|
|
Fund Offering
|
|
Return
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Intermediate Term Bond
|
|
PIMCO Total Return Admin
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|
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8.81
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%
|
|
|
Lehman US Government/Credit Intermediate
|
|
|
7.40
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%
|
Large Cap Equity Blend
|
|
DWS Equity 500 Index Inv
|
|
|
5.39
|
%
|
|
|
S&P 500
|
|
|
5.49
|
%
|
39
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|
|
|
|
|
|
|
|
One-Year
|
Asset Class
|
|
Fund Offering
|
|
Return
|
Small Cap Equity Blend
|
|
DWS VIT Small Cap Index: CI A
|
|
|
-1.90
|
%
|
|
|
Russell 2000
|
|
|
-1.57
|
%
|
International Equity
|
|
International Value
|
|
|
6.25
|
%
|
|
|
MSCI EAFE Index
|
|
|
11.63
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%
|
Money Market
|
|
Moodys Corporate Average
|
|
|
6.07
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%
|
We generally credit contributions to the Executive Contribution Account Plan on January
1
st
for the prior fiscal year. Participants in the Executive Contribution
Account Plan must be employed by the Company on the last business day of the year to be eligible to receive the
contribution. Our annual contribution is an amount equal to a percentage of the participants
eligible compensation, which includes the participants annual base salary and any bonus
(including non-equity incentive plan compensation) paid to the participant during the year, up to a
maximum combined total of $3,000,000. Mr. Gissinger is entitled to receive a Company contribution
equal to 5% of his eligible compensation.
Participants vest in the Executive Contribution Account Plan upon (i) completion of ten years
of service to the Company and the earlier of (a) the
participants attainment of age 55 and (b)
completion of five years of plan participation; (ii) the attainment of age 65; (iii) onset of a
disability (as defined in the Executive Contribution Account Plan); (iv) a change in control of
the Company (as defined in the Executive Contribution Account Plan); or (v) death. In the event of
our insolvency or bankruptcy, participants in the Executive Contribution Account Plan will be
unsecured general creditors of the Company.
Vested benefits in the Executive Contribution Account Plan are paid out in a lump sum within
60 days of the participants termination of employment, subject to a possible delay in payment of
six months pursuant to Section 409A of the Internal Revenue Code. However, if the participant is
eligible for retirement (the earlier of the attainment of age 65 or 55 with at least eleven years
of service to the Company), the participants vested account balance may be paid in an annuity over
five, ten or fifteen years, as elected by the participant. Prior to termination of the
participants employment, distributions are allowed only as a result of an unforeseeable emergency
as determined in the sole discretion of the Compensation Committee, which shall interpret such term
consistent with Code Section 409A.
40
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
Each of our named executive officers may receive various payments if his employment with us is
terminated. Employment may be terminated in various ways, including the following:
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|
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Voluntary termination of employment by the named executive officer (with or
without good reason);
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|
|
Retirement (normal or early);
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Termination of employment by the Company (with or without cause);
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Termination in the event of the disability or death of the named executive
officer; and
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Termination following a change in control of the Company.
|
In the discussion below, we summarize the various termination scenarios under which our named
executive officers would have been entitled to receive payments had their employment been
terminated as of December 31, 2007. In the tables below, we provide estimates of the payments that
our named executive officers would have received had their employment been terminated as of
December 31, 2007. These estimates assume that the price of our common stock was the closing price
on the last business day of 2007. These amounts are only estimatesthe actual amounts to be paid
out to a named executive officer can only be determined at the time of the executives separation
from the Company.
Potential payments made to Messrs. Mozilo and Sambol upon the termination of their employment
or upon a change in control are governed by the terms of their employment agreements with the
Company and by the benefit plans in which they participate. Potential payments to Mr. Mozilo as of
December 31, 2007 would have been governed by the 2007 Mozilo Employment Agreement (as defined
below), which became effective on January 1, 2007. Potential payments to Mr. Sambol as of December
31, 2007 would have been governed by the 2007 Sambol Employment Agreement (as defined below), which
became effective on January 1, 2007.
Potential payments to Messrs. Sieracki, Garcia and Gissinger upon the termination of their
employment or upon a change in control are governed by the terms of the benefit plans in which they
participate. None of Messrs. Sieracki, Garcia or Gissinger has an employment agreement with the
Company.
As more fully detailed in a
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 17, 2008, and the Registration Statement on Form S-4 of Bank of America
Corporation (Bank of America) filed on February 12, 2008, as amended by
Amendment No. 1 to the Registration Statement on Form S-4 of
Bank of America filed on March 27, 2008, as it may be further amended from time-to-time
(the Registration Statement), we have entered into an
agreement and plan of merger with Bank of America. Consummation of the acquisition would be a
change in control as the term is used in this section. Detailed information about potential
payments to the named executive officers is also provided in the Registration Statement under the
heading Countrywides Officers and Directors Have Financial Interests in the Merger.
Payments to Mr. Mozilo
Employment Agreement with Mr. Mozilo
We are party to an employment agreement with Mr. Mozilo effective January 1, 2007 (the 2007
Mozilo Employment Agreement), as described and discussed under the heading Compensation
Discussion and Analysis. As discussed below, effective upon completion of the Companys
acquisition by Bank of America, Mr. Mozilo has agreed to waive his right to receive (1) any cash
severance and pro rata bonus payments (totaling approximately $36.4 million) for certain qualifying
terminations and (2) consulting fees (totaling $400,000 per year) and perquisites and other
benefits.
Payments to Mr. Mozilo upon Voluntary Termination without Good Reason and His Normal Retirement
Had Mr. Mozilo voluntarily terminated his employment without good reason, as defined in the
2007 Mozilo Employment Agreement (his voluntary termination without good reason includes his
retirement because Mr. Mozilo became eligible for normal retirement prior to December 31, 2007):
|
|
|
all of his unvested restricted stock and stock options granted after November 9,
2004 and prior to January 1, 2007 would have become immediately vested and would have
remained exercisable for one year;
|
|
|
|
|
a pro rata portion of his unvested RSUs granted on
April 2, 2007 would have
become immediately vested if the relevant performance metric was achieved and a pro rata
portion of his unvested SARs granted after January 1, 2007 would have become immediately
vested (the vested portion would be proportionate to the fraction of
days employed in the calendar year divided by 350); and
|
41
|
|
|
he would have been entitled to receive an enhanced amount under the SERP paid
over fifteen years (because Mr. Mozilo is currently eligible for retirement, the value
of any SERP benefits would have been no greater than the amount included in the Pension
Benefits table).
|
Payments to Mr. Mozilo upon Termination without Cause or Voluntary Termination with Good Reason
Upon Mr. Mozilos termination without cause or his voluntary termination with good reason
(as cause and good reason are defined in the 2007 Mozilo Employment Agreement):
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|
|
he would have been entitled to receive a cash payment equal to three times his
then-applicable base salary plus his target annual non-equity incentive compensation for
the year in which the termination occurred;
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|
|
|
|
he would have been entitled to receive a pro rata portion of the annual
non-equity incentive compensation he was eligible to receive pursuant to his employment
agreement, based on time of service and annual performance;
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|
|
|
all of his unvested restricted stock, stock options, RSUs and SARs would have
become immediately vested/or exercisable, except that only a pro rata portion of the RSUs granted in connection with his agreeing to remain
the Companys Chief Executive Officer would have vested (the vested portion would be
proportionate to the fraction of the employment term served);
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|
|
he would have been entitled to receive an enhanced amount under the SERP paid
over fifteen years (because Mr. Mozilo is currently eligible for retirement, the value
of any SERP benefits would have been no greater than what is included in the Pension
Benefits table);
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he and his beneficiaries would have been entitled to continue to receive health
and life insurance benefits for three years (the continuation period); and
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|
|
|
following the continuation period, he and his spouse would have been entitled to
continue to receive health benefits for their lifetimes.
|
Payments to Mr. Mozilo upon Termination for Cause
Upon Mr. Mozilos termination for cause (as defined in the 2007 Mozilo Employment
Agreement), he would not have been eligible to receive any additional amounts, other than amounts
already vested at the time of termination. His unvested restricted stock, stock options, RSUs and
SARs would not have vested.
Payments to Mr. Mozilo upon Death or Disability
Under the 2007 Mozilo Employment Agreement:
|
|
|
upon Mr. Mozilos death, his beneficiary would have continued to receive Mr.
Mozilos then-applicable base salary for a period of 12 months;
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|
|
|
|
upon Mr. Mozilos death or termination of his employment because of his
disability (as defined thereunder), he would have been entitled to receive a pro rata
portion of the annual non-equity incentive compensation he was eligible to receive
pursuant to his employment agreement, based on time of service and annual performance;
|
|
|
|
|
upon Mr. Mozilos death or termination of his employment because of his
disability, all of his unvested restricted stock, stock options, RSUs and SARs would
have become immediately vested and/or exercisable;
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|
|
|
|
upon Mr. Mozilos death, he would have been entitled to receive an enhanced
amount under the SERP in a lump-sum cash payment instead of being paid out over fifteen
years (because Mr. Mozilo is currently eligible for retirement, the value of any SERP
benefits that he was entitled to receive was no greater than what is included in the
Pension Benefits table);
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|
|
|
upon Mr. Mozilos death, his beneficiaries would have been entitled to receive
health and life insurance benefits for one year and following that year, and his spouse
would have been entitled to receive health benefits for her lifetime;
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|
|
|
upon the termination of Mr. Mozilos employment because of his disability, he
would have continued to receive one-half of his then-applicable base salary until the
earlier of his death or December 16, 2009 (less any cash benefits he may have received
under the Companys disability plans and the Pension Plan); and
|
|
|
|
|
upon Mr. Mozilos disability, he and his beneficiaries would have been entitled
to receive health, medical, dental and life insurance benefits for the earlier of his
death or December 16, 2009 and following that period, he and his spouse would have been
entitled to receive health benefits for their lifetimes.
|
42
Payments to Mr. Mozilo upon a Change in Control
Immediately upon a change in control (as change in control is defined in the 2007 Mozilo
Employment Agreement):
|
|
|
all of Mr. Mozilos unvested performance-based restricted stock, stock options,
RSUs and SARs would have become vested and/or exercisable, except that only a pro rata portion of the RSUs granted in connection with his agreeing to remain
the Companys Chief Executive Officer would have vested (the vested portion would be
proportionate to the fraction of the employment term served); and
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|
|
|
|
Mr. Mozilo would have been entitled to receive a gross up payment equal to any
excise tax, plus any income and/or employment tax thereon,
charged to him as a result of the above (with certain exceptions).
|
If following a change in control , Mr. Mozilos employment had been terminated for any reason
by him or without cause by the Company (as change in control and cause are defined in the
2007 Mozilo Employment Agreement), he would also have been entitled to receive:
|
|
|
a cash payment equal to three times his then-applicable base salary, plus a cash
payment equal to three times the greater of (i) the average bonus and/or incentive award
paid or payable for the two fiscal years preceding the year in which termination occurs
and (ii) the bonus and/or incentive award paid for the fiscal year preceding the change
in control;
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|
|
|
|
a pro rata percentage of his annual non-equity incentive compensation through the
date of termination;
|
|
|
|
|
an enhanced amount under the SERP in a lump-sum cash payment (as opposed to being
paid out over fifteen years) (because Mr. Mozilo is currently eligible for retirement,
the value of any SERP benefits that he would have been entitled to receive is no greater
than what is included in the Pension Benefits table);
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|
|
|
|
for three years, continued health and life insurance benefits for Mr. Mozilo and
his beneficiaries;
|
|
|
|
|
following those three years, health benefits for the lifetimes of Mr. Mozilo and
his spouse; and
|
|
|
|
|
a gross-up payment equal to any excise tax, plus any income and/or employment tax thereon, charged to him as a result of his
receipt of any of the above (with certain exceptions).
|
Pursuant to a letter agreement entered into on January 25, 2008 with the Company, Mr. Mozilo
agreed to waive any cash severance and pro rata bonus payments he may be eligible to receive upon a
termination of his employment by him for any reason or by the Company without cause (as cause
is defined in the 2007 Mozilo Employment Agreement) following completion of the anticipated
acquisition by Bank of America. Such payments would have amounted to approximately $36.4 million.
Payments to Mr. Mozilo Following His Term as Chief Executive Officer
Pursuant to the 2007 Mozilo Employment Agreement, at the expiration of Mr. Mozilos term as
both Chairman of the Board and Chief Executive Officer, he is expected to continue to serve as a
non-employee Chairman of the Board until December 31, 2011. During the period Mr. Mozilo would
serve as a non-employee Chairman of the Board, he would be entitled to receive the same
compensation that other non-employee directors receive plus an additional $200,000 for his services
as Chairman of the Board. He would also be entitled to receive other benefits, including office
space, secretarial support, use of the Companys aircraft for business purposes, financial
consulting services and payment of annual country club dues.
If Mr. Mozilos service as an employee or non-employee Chairman of the Board terminates before
March 1, 2011, the 2007 Mozilo Employment Agreement provided that the Company would have been
required to retain Mr. Mozilo as a consultant pursuant to the terms of a consulting agreement
between the Company and Mr. Mozilo. As a consultant, Mr. Mozilo would be obligated to make himself
available for a specified period of time each month through February 2011 and would be compensated
at the rate of $400,000 per year. He would also be entitled to receive other benefits, including
office space, secretarial support, use of the Companys aircraft, financial consulting services and
payment of annual country club dues.
During the consulting period, all options granted to Mr. Mozilo under his employment
agreements would fully vest in the event of (a) a change in control, (b) termination of the
consulting agreement by reason of Mr. Mozilos death or disability or (c) termination of the
consulting agreement by Mr. Mozilo by reason of the Companys failure to honor its obligations
under the consulting agreement. Otherwise, all such options would continue to vest during the
consulting period.
43
Because the Company has discontinued its Director Emeritus program, Mr. Mozilo is no longer
eligible to participate in that program upon a termination of his services as a director.
Pursuant to a letter agreement entered into on January 25, 2008 with the Company, Mr. Mozilo
and
Countrywide agreed that his consulting agreement is to be terminated in connection with the
consummation of the acquisition by Bank of America. Accordingly, upon the termination of Mr.
Mozilos employment and his service as a director following the consummation of acquisition by
merger with Bank of America, Mr. Mozilo would not be entitled to receive the consulting fees
(totaling $400,000 per year) and perquisites (including office space, secretarial support, use of
the Companys aircraft, financial consulting services and payment of annual country club dues) that
would have been provided under his consulting agreement effective upon the Companys acquisition by
Bank of America.
Covenants by Mr. Mozilo
Pursuant to the 2007 Mozilo Employment Agreement, Mr. Mozilo has agreed not to compete with
the Company, directly or indirectly, without consent of the Board as long as he is the Chief
Executive Officer of the Company. In addition, for twenty-four months after the later of the date
Mr. Mozilo ceases to be an employee or director of the Company, he has agreed not to interfere with
our employee or customer relationships or solicit our employees or customers on behalf of persons
competitive with the Company. Mr. Mozilo has also agreed that while he is employed by the Company,
while he is a director and thereafter, he will not make any public false, defamatory or disparaging
statement about the Company, or if prior to a change in control, about the officers of the Company. Mr. Mozilo has also agreed that he will not use or divulge any
trade secret or confidential information concerning the business and policies of the Company.
Estimated Payments to Mr. Mozilo Upon Termination or a Change in Control
The following table shows estimated potential payments upon a hypothetical December 31, 2007
termination, including following a change in control of the Company,
for Mr. Mozilo (the table does not reflect Mr. Mozilos waiver of
his right to receive (1) any cash
severance and pro rata bonus payments (totaling approximately $36.4 million) for certain qualifying
terminations and (2) consulting fees (totaling $400,000 per year) and perquisites and other
benefits upon consummation of the Bank of America acquisition).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
Accelerated
|
|
Vested
|
|
Life
|
|
Vested
|
|
Other
|
|
|
|
|
Severance
|
|
Equity
|
|
SERP
|
|
Insurance
|
|
Deferred
|
|
Benefits
|
|
|
|
|
Payment
|
|
Vesting
|
|
Benefit
|
|
Proceeds
|
|
Compensation
|
|
Continuation
|
|
Total
|
|
|
(1)(2)($)
|
|
(1)(3)($)
|
|
(1)(4)($)
|
|
(1)(5)($)
|
|
(1)(6)($)
|
|
(1)(7)($)
|
|
(1)($)
|
Voluntary With Good
Reason
|
|
|
9,700,000
|
|
|
|
1,679,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,872
|
|
|
|
11,483,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary Without
Good Reason or
Retirement (8)
Normal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement (8) Early
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary For Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Without
Cause
|
|
|
9,700,000
|
|
|
|
1,679,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,872
|
|
|
|
11,483,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
1,900,000
|
|
|
|
1,679,924
|
|
|
|
|
|
|
|
13,895,761
|
|
|
|
|
|
|
|
|
|
|
|
17,475,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disability
|
|
|
1,029,692
|
|
|
|
1,679,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,339
|
|
|
|
2,806,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Immediately following a
change in control
|
|
|
|
|
|
|
1,679,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,679,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Without
Cause or Voluntary
for any reason
following a change in
control
|
|
|
67,084,419
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,872
|
|
|
|
67,188,291
|
|
|
|
|
(1)
|
|
Payments that have already accrued, vested or are not dependent on termination of employment
or a change in control have been omitted from the table.
|
|
(2)
|
|
Cash Severance Payment.
Upon Mr. Mozilos voluntary termination with good reason, his
involuntary termination without cause (prior to or following a change in control), his
termination upon his disability or his death or his termination for any reason following a
change in control, he would have been entitled to receive a pro rata portion of his annual
non-equity incentive compensation based on time of service and annual performance. However,
because Mr.
Mozilo was not awarded an annual non-equity incentive payment for Fiscal 2007, he would not
have been entitled to receive such pro rata portion.
|
44
|
|
|
|
|
Based on Mr. Mozilos historical compensation and a cash severance payment upon termination
estimated as of December 31, 2007, Mr. Mozilos change in control benefits would not have been
subject to an excise tax and no gross-up payments would have been made.
|
|
(3)
|
|
Accelerated Equity Vesting.
Values in the table represent gain on unvested RSUs that would
have become vested using the December 31, 2007 share price for our common stock ($8.94).
|
|
(4)
|
|
Vested SERP Benefit
. Because Mr. Mozilo is currently eligible to retire, the value of any
SERP benefits that he would have received is no greater than what is included in the Pension
Benefits table. Consequently, no additional values are included here. However, upon Mr.
Mozilos death or immediately upon a change in control of the Company, the current,
accumulated present value of the benefits would be paid in a lump sum.
|
|
(5)
|
|
Life Insurance Proceeds
. The amount is equal to life insurance proceeds payable following the
death of both Mr. Mozilo and his spouse, less premiums previously paid by the Company for such
insurance.
|
|
(6)
|
|
Vested Deferred Compensation
. Mr. Mozilo is currently eligible to retire and, according to
the terms of the Companys Executive Deferred Compensation Plan, he is fully vested in all
Company contributions. The total value of Mr. Mozilos deferred compensation account can be
found in the Non-Qualified Deferred Compensation table.
|
|
(7)
|
|
Other Benefits Continuation
. This column reflects estimated amounts for continuation of
benefits following termination. For voluntary termination with good reason, involuntary
termination without cause and termination for any reason following a change in control, the
amounts reflect three years of medical, dental and vision benefits, which
would have totaled $6,291 per year. For disability, the amount reflects two years of medical,
dental and vision benefits, which would have totaled $6,291 per year. The
amounts also include lifetime medical coverage continuation for Mr. Mozilo and his wife
following such two or three year period, which would have had an estimated total value of
$85,000.
|
|
(8)
|
|
Retirement
. Mr. Mozilo is currently eligible for normal retirement. For purposes of these
termination scenarios, his voluntary termination without good reason and his retirement are
considered to be equivalent.
|
|
(9)
|
|
The cash severance payment reported is greater than the cash
severance payment Mr. Mozilo currently would be entitled to receive
(approximately $36.4 million) as a result of using different years to
calculate this payment. Mr. Mozilo has waived his right to receive
this payment upon consummation of the Companys planned
acquisition by Bank of America.
|
Payments to Mr. Sambol
Employment Agreement with Mr. Sambol
On March 27, 2007, we entered into a new employment agreement with Mr. Sambol, which was
effective January 1, 2007 (the 2007 Sambol Employment Agreement), as described and discussed
under the heading Compensation Discussion and Analysis.
Payments to Mr. Sambol upon Voluntary Termination (with and without Good Reason), Retirement and
Termination For Cause
Upon Mr. Sambols voluntary termination without good reason (as defined in the 2007 Sambol
Employment Agreement), his retirement (normal or early) or his termination for cause, Mr. Sambol
would not have been entitled to receive any incremental amounts or benefits that were not also
available to non-executive salaried employees. Upon Mr. Sambols voluntary termination with good
reason, he would have been entitled to immediate vesting of all of his restricted stock, stock
options, SARs, RSUs and other equity incentive compensation awards.
Payments to Mr. Sambol upon Termination Without Cause
Upon Mr. Sambols termination without cause (as defined in the 2007 Sambol Employment
Agreement):
|
|
|
he would have been entitled to receive his base salary for a two-year severance
period (the severance period);
|
|
|
|
|
he would have been entitled to receive a payment at the end of each fiscal year
during the severance period in an amount equal to the average of the incentive cash
bonus paid to him in the two calendar years immediately preceding the date of
termination;
|
|
|
|
|
all of his unvested restricted stock, stock options, SARs, RSUs and other equity
incentive compensation awards would have become immediately vested and/or exercisable,
as applicable; and
|
|
|
|
|
he and his beneficiaries would have been entitled to continue to receive health
and life insurance benefits for the severance period.
|
Payments to Mr. Sambol upon Death or Disability
Under the 2007 Sambol Employment Agreement:
|
|
|
upon Mr. Sambols death, his beneficiary would have been entitled to continue to
receive Mr. Sambols then-applicable base salary for a period of 12 months;
|
45
|
|
|
upon Mr. Sambols death, his benefits under the SERP would have become
immediately vested and his beneficiary would have been entitled to receive a lump-sum
payment;
|
|
|
|
|
upon Mr. Sambols death, his dependents would have been entitled to receive
payment for continuation health care coverage (i.e., COBRA coverage);
|
|
|
|
|
upon Mr. Sambols death or termination upon his disability (as defined
thereunder), he would have been entitled to receive a pro rata portion of his annual
non-equity incentive compensation, based on time of service and annual performance;
|
|
|
|
|
upon Mr. Sambols death or his termination upon his disability, all of his
unvested restricted stock, stock options SARs, RSUs and other equity incentive
compensation awards would have become immediately vested and/or exercisable, as
applicable;
|
|
|
|
|
upon the termination of Mr. Sambols employment because of his disability, he
would have been entitled to continue to receive one-half of his then-applicable base
salary for the earlier of five years or his death (less any cash benefits he would have
received under the Companys disability plans and its Pension Plan);
|
|
|
|
|
upon the termination of Mr. Sambols employment because of his disability, his
benefits under the SERP would have become immediately vested and he would have been
entitled to a fifteen year annuity;
|
|
|
|
|
upon the termination of Mr. Sambols employment because of his disability, he and
his beneficiaries would have continued to receive health and life insurance benefits for
the earlier of five years or the date of Mr. Sambols death; and
|
|
|
|
|
upon Mr. Sambols death or termination upon his disability, his unvested balance
under our Deferred Compensation Plan would have become immediately vested and he would
have been deemed to have elected payment of any amounts due him.
|
Payments to Mr. Sambol upon a Change in Control
Immediately upon a change in control (as change in control is defined in the 2007 Sambol
Employment Agreement):
|
|
|
all of Mr. Sambols unvested restricted stock, stock options, SARs, RSUs and
other equity incentive compensation awards would have become immediately vested;
|
|
|
|
|
Mr. Sambols benefits under the SERP would have become immediately vested and he
would have been entitled to receive a lump-sum cash payment within 60 days of the change
in control;
|
|
|
|
|
Mr. Sambols unvested balance under the Executive Deferred Compensation Plan
would have immediately vested and payment would have been made to him pursuant to the
plan; and
|
|
|
|
|
Mr. Sambol would have received a gross-up payment equal to any excise tax, plus
any income and/or employment tax thereon, charged to him as a result of the above (with
certain exceptions).
|
If Mr. Sambols employment would have been terminated following a change in control without
cause by the Company or by him for good reason (as those terms are defined in the 2007 Sambol
Employment Agreement), he would have been entitled to receive:
|
|
|
a cash payment equal to three times his then-applicable base salary;
|
|
|
|
|
a cash payment equal to three times the greater of (i) the average non-equity
incentive compensation paid or payable for the two fiscal years preceding the year in
which termination occurs and (ii) the bonus and/or incentive award paid for the fiscal
year preceding the change in control;
|
|
|
|
|
for three years, continued health and life insurance benefits for Mr. Sambol and
his dependents; and
|
|
|
|
|
a gross-up payment equal to any excise tax, plus any income and/or employment
tax thereon, charged to him as a result of his receipt of any of the above (with certain
exceptions).
|
Restrictions on Mr. Sambols Competition, Solicitation and Disclosure of Confidential Information
Following the termination of Mr. Sambols employment for any reason, (i) he has agreed not to
compete, directly or indirectly, with the Company without the consent of the Board for twelve
months, (ii) he has agreed not to influence or attempt to influence customers of the Company to
divert their business in competition with the Company, (iii) he has agreed
not to influence or advise any other person to employ or solicit anyone employed by the
Company at the time of his termination, and (iv) he has agreed not to influence or advise any
employee to leave the Company. In addition, Mr. Sambol
46
agreed not to disclose trade secret and
confidential information of the Company to anyone other than the Company and those designated by
it.
Estimated Payments to Mr. Sambol Upon Termination or a Change in Control
The following table shows estimated and potential payments upon a hypothetical December 31,
2007 termination, including following a change in control of the Company, for Mr. Sambol.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
Accelerated
|
|
Vested
|
|
Life
|
|
Vested
|
|
Other
|
|
|
|
|
Severance
|
|
Equity
|
|
SERP
|
|
Insurance
|
|
Deferred
|
|
Benefits
|
|
|
|
|
Payment
|
|
Vesting
|
|
Benefit
|
|
Proceeds
|
|
Compensation
|
|
Continuation
|
|
Total
|
|
|
(1)(2)($)
|
|
(1)(3)($)
|
|
(1)(4)($)
|
|
(1)($)
|
|
(1)(5)($)
|
|
(1)(6)($)
|
|
(1)($)
|
VoluntaryWith Good Reason
|
|
|
|
|
|
|
840,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
840,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VoluntaryWithout Good Reason
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement (7)Normal
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement (7)Early
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary For Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
InvoluntaryWithout Cause
|
|
|
13,300,000
|
|
|
|
840,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,079
|
|
|
|
14,169,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
1,400,000
|
|
|
|
840,303
|
|
|
|
2,013,694
|
|
|
|
5,100,000
|
|
|
|
172,478
|
|
|
|
14,540
|
|
|
|
9,541,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disability
|
|
|
1,822,399
|
|
|
|
840,303
|
|
|
|
2,013,694
|
|
|
|
|
|
|
|
172,478
|
|
|
|
72,698
|
|
|
|
4,921,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Immediately Following a Change in Control
|
|
|
|
|
|
|
840,303
|
|
|
|
2,013,694
|
|
|
|
|
|
|
|
172,478
|
|
|
|
|
|
|
|
3,026,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
InvoluntaryWithout Cause or
VoluntaryWith Good Reason following a
Change in Control
|
|
|
19,950,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,619
|
|
|
|
19,993,619
|
|
|
|
|
(1)
|
|
Payments that have already accrued, vested or are not dependent on termination of employment
have been omitted from the table above.
|
|
(2)
|
|
Cash Severance Payment
. Upon Mr. Sambols
termination upon his disability or his death, he would have been entitled to receive a pro
rata portion of his annual non-equity incentive compensation based on time of service and
annual performance. However, because Mr. Sambol was not awarded an annual non-equity incentive
payment for Fiscal 2007, he would not have been entitled to receive such pro rata portion.
Based on Mr. Sambols historical compensation and his estimated cash severance payment upon
termination as of December 31, 2007, Mr. Sambols change in control benefits would not have
been subject to an excise tax and no gross-up payments would have been made.
|
|
(3)
|
|
Accelerated Equity Vesting
. Values in the table represent gain on unvested RSUs that would
have become vested using the December 31, 2007 share price for our common stock ($8.94).
|
|
(4)
|
|
Vested SERP Benefit
. Information in the table above represents the incremental value of the
benefit that exceeds the value already disclosed in the Pension Benefits table. These
incremental values are primarily due to accelerated vesting, specific benefit assumptions
defined in the SERP document and, in the case of death or a change in control, lump-sum
payment of the accrued benefit. Unvested contributions by the Company to the Executive
Deferred Compensation Plan offset any benefits Mr. Sambol may receive under the SERP.
|
|
(5)
|
|
Vested Deferred Compensation
. Values in the table represent the otherwise unvested portion of
Mr. Sambols deferred compensation account as of December 31, 2007. This unvested amount is
attributable to our contributions to the Executive Deferred Compensation Plan. These values
are included in the balances provided in the Non-Qualified Deferred Compensation table.
|
|
(6)
|
|
Other Benefits Continuation
. This column reflects estimated amounts for continuation of
benefits following termination. For involuntary termination without cause, the amount reflects
two years of medical, dental, vision and life insurance, which would have totaled $14,540 per
year. For death, the amount reflects one year of medical, dental, vision and life insurance.
For disability, the amount reflects five years of medical, dental, vision and life insurance,
which would have totaled $14,540 per year. For involuntary termination without cause or
voluntary termination with
good reason following a change in control, the amount reflects three years of medical, dental,
vision, life insurance and supplemental disability, which would have totaled $14,540 per year.
|
47
|
|
|
(7)
|
|
Retirement
. Mr. Sambol is not and would not have been eligible for either early or normal
retirement.
|
Payments to Messrs. Sieracki, Garcia and Gissinger
None of Messrs. Sieracki, Garcia and Gissinger have employment agreements with the Company.
None of Messrs. Sieracki, Garcia and Gissinger would have been eligible to receive any payments in
the event of a voluntary termination (with or without good reason), retirement (normal or early),
for cause termination or without cause termination.
Payments upon Death or Disability
In the event of death or disability of Messrs. Sieracki, Garcia or Gissinger:
|
|
|
the executive would have received a pro rata portion of his annual non-equity
incentive compensation;
|
|
|
|
|
any unvested restricted stock, stock options or SARs granted to the executive
after November 9, 2004 would have become immediately vested pursuant to our 2000 Equity
Incentive Plans;
|
|
|
|
|
for Messrs. Sieracki and Garcia, the executives benefits under the SERP would
have immediately vested, and upon his death, his beneficiary would have been entitled to
a lump-sum payment, or upon termination of his employment upon his disability, he would
have been entitled to a fifteen year annuity;
|
|
|
|
|
for Mr. Gissinger, his benefits under our Executive Contribution Account Plan
would have immediately vested, and he or his beneficiary, as applicable, would have been
entitled to a lump-sum payment; and
|
|
|
|
|
the executives unvested balance under the Executive Deferred Compensation Plan
would have immediately vested and amounts due him would have been paid in the form of a
lump sum or monthly annuities over five, ten or fifteen years, as elected by the
executive.
|
Payments Made Upon a Change in Control
Immediately upon a change in control, for each of Messrs. Sieracki, Garcia and Gissinger:
|
|
|
any of the executives unvested restricted stock, stock options, RSUs or SARs would have become immediately vested and/or
exercisable, as applicable (for purposes of such vesting, as change in control is
defined in our 2000 or 2006 Equity Incentive Plans);
|
|
|
|
|
for Messrs. Sieracki and Garcia, the executives benefits under the SERP would
have become immediately vested and he would have been entitled to receive a lump-sum
cash payment within 60 days of the change in control (for purposes of such vesting and
payment, as change in control is defined in the SERP);
|
|
|
|
|
the executives unvested balance in the Executive Deferred Compensation
Plan would have become immediately vested and payment would have been made to the
executive pursuant to the plan (for purposes of such vesting and payment, as change in
control is defined in the Executive Deferred Compensation Plan);
|
|
|
|
|
for Mr. Gissinger, his benefits under our Executive Contribution Account Plan
would have become immediately vested (for purposes of such
vesting, as change in control is defined in the Executive Contribution Account Plan);
and
|
|
|
|
|
the executive would have received a gross up payment equal to the excise tax,
plus income and employment taxes thereon, charged to him as a result of his receipt of
any of the above (with certain exceptions).
|
Messrs. Sieracki, Garcia and Gissinger are each participants in the Change in Control
Severance Plan. Pursuant to this Plan, if an executives employment had been terminated following a
change in control without cause by the Company or for good reason by the executive (as those
terms are defined in the Change in Control Severance Plan),
the named executive officer would also have been
eligible to receive:
|
|
|
an amount equal to three times the executives annual base salary as of the date
of his termination, or, if greater, as of the date on which the change in control
occurs, in each case, paid over three years;
|
|
|
|
|
an amount equal to three times the greater of the bonus and/or incentive award
paid to the executive for the fiscal year immediately preceding the change in control
and the average of the bonus and/or incentive award paid to the executive for each of
the last two fiscal years preceding the year of termination paid over three years;
|
|
|
|
|
continued benefits for the executive and his dependents or beneficiaries,
including group medical, health, dental and prescription drug benefits (including the
executive medical examination program), life insurance and other
death benefits coverage, executive long-term disability, individual outplacement services,
and financial planning services for a period of three years;
|
48
|
|
|
a credit for three additional years of service and age under all of our employee
benefit plans; and
|
|
|
|
|
a gross-up payment equal to the excise tax, plus income and employment taxes
thereon, charged to the executive as a result of his receipt of any of the above (with
certain exceptions).
|
If, following termination of his employment, an executive accepts alternative employment with
the Company or its successor, continued benefits and payments of the salary and incentive cash
bonus amounts would cease. Amounts or benefits paid to the executive under the Change in Control
Severance Plan will not be offset by any other future compensation received by the executive from
other sources.
Estimated Payments to Mr. Sieracki Upon Termination or a Change in Control
The following table shows the potential payments upon a hypothetical December 31, 2007
termination, including following a change in control of the Company, for Mr. Sieracki. Mr. Sieracki
would not have received any payments upon voluntary termination of his employment (with or without
good reason) or involuntary termination of his employment (with or without cause). Mr. Sieracki is
not and would not have been eligible for early or normal retirement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
Accelerated
|
|
Vested
|
|
Life
|
|
Vested
|
|
Other
|
|
|
|
|
Severance
|
|
Equity
|
|
SERP
|
|
Insurance
|
|
Deferred
|
|
Benefits
|
|
|
|
|
Payment
|
|
Vesting
|
|
Benefit
|
|
Proceeds
|
|
Compensation
|
|
Continuation
|
|
Total
|
|
|
(1)(2)($)
|
|
(1) (3)($)
|
|
(1)(4)($)
|
|
(1)($)
|
|
(1)(5)($)
|
|
(1)(6)($)
|
|
(1)($)
|
Death
|
|
|
|
|
|
|
328,439
|
|
|
|
842,926
|
|
|
|
3,005,000
|
|
|
|
174,115
|
|
|
|
|
|
|
|
4,350,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disability
|
|
|
|
|
|
|
328,439
|
|
|
|
842,926
|
|
|
|
|
|
|
|
174,115
|
|
|
|
|
|
|
|
1,345,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Immediately Following a Change in Control
|
|
|
|
|
|
|
328,439
|
|
|
|
842,926
|
|
|
|
|
|
|
|
174,115
|
|
|
|
|
|
|
|
1,345,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
InvoluntaryWithout Cause or
VoluntaryWith Good Reason following a
Change in Control
|
|
|
9,070,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,736
|
|
|
|
9,138,581
|
|
|
|
|
(1)
|
|
Payments that have already accrued, vested or are not dependent on termination of employment
have been omitted from the table above.
|
|
(2)
|
|
Cash Severance Payment
. Upon Mr. Sierackis termination upon his disability or his death, he
would have been entitled to receive a pro rata portion of the annual non-equity incentive
compensation based on time of service and annual performance. However, because Mr. Sieracki
was not awarded an annual non-equity incentive payment for Fiscal 2007, he would not have been
entitled to receive such pro rata portion.
|
|
|
|
The estimated value of Mr. Sierackis gross-up payment upon a specified termination of his
employment following a change in control (including both reimbursement for any excise tax and
associated taxes on that payment) is $4,107,570 and is included in the cash severance benefit
above. The gross-up amount in the above table is based on an excise tax rate of 20%, a 35%
federal income tax rate, a 1.45% Medicare tax rate and a 9.30% state income tax rate.
|
|
(3)
|
|
Accelerated Equity Vesting
. Values in the table represent gain on unvested RSUs that would
have become vested using the December 31, 2007 share price for our common stock ($8.94).
|
|
(4)
|
|
Vested SERP Benefit
. Information in the table above represents the incremental value of the
benefit that exceeds the value already disclosed in the Pension Benefits table. These
incremental values are primarily due to accelerated vesting, specific benefit assumptions
defined in the SERP document and, in the case of death or a change in control, lump-sum
payment of the accrued benefit. Unvested contributions by the Company to the Executive
Deferred Compensation Plan offset any benefits Mr. Sieracki may receive under the SERP.
|
|
(5)
|
|
Vested Deferred Compensation
. Values in the table represent the otherwise unvested portion of
Mr. Sierackis deferred compensation account as of December 31, 2007. This unvested amount is
attributable to our contributions to the Executive Deferred Compensation Plan. These values
are included in the balances provided in the Non-Qualified Deferred Compensation table.
|
|
(6)
|
|
Other Benefits Continuation
. This column reflects estimated amounts for continuation of
benefits following termination. For involuntary termination without cause or voluntary
termination with good reason following a change in control, the amount reflects three years of
medical, dental, vision, life insurance, supplemental disability
and outplacement, which would have totaled
$22,579 per year.
|
Estimated Payments to Mr. Garcia Upon Termination or a Change in Control
The following table shows the potential payments upon a hypothetical December 31, 2007
termination, including following a change in control of the Company, for Mr. Garcia. Mr. Garcia
would not have received any payments upon
49
voluntary termination of his employment (with or without good reason) or involuntary
termination of his employment (with or without cause). Mr. Garcia is not and would not have been
eligible for early or normal retirement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
Accelerated
|
|
Vested
|
|
Life
|
|
Vested
|
|
Other
|
|
|
|
|
Severance
|
|
Equity
|
|
SERP
|
|
Insurance
|
|
Deferred
|
|
Benefits
|
|
|
|
|
Payment
|
|
Vesting
|
|
Benefit
|
|
Proceeds
|
|
Compensation
|
|
Continuation
|
|
Total
|
|
|
(1)(2)($)
|
|
(1)(3)($)
|
|
(1)(4)($)
|
|
(1)($)
|
|
(1)(5)($)
|
|
(1)(6)($)
|
|
(1)($)
|
Death
|
|
|
|
|
|
|
187,679
|
|
|
|
1,077,077
|
|
|
|
5,100,000
|
|
|
|
288,295
|
|
|
|
|
|
|
|
6,653,051
|
|
Disability
|
|
|
|
|
|
|
187,679
|
|
|
|
1,077,077
|
|
|
|
|
|
|
|
288,295
|
|
|
|
|
|
|
|
1,553,051
|
|
Immediately Following a Change in Control
|
|
|
|
|
|
|
187,679
|
|
|
|
1,077,077
|
|
|
|
|
|
|
|
288,295
|
|
|
|
|
|
|
|
1,553,051
|
|
Involuntary Without Cause or
Voluntary With Good Reason following
a Change in Control
|
|
|
11,164,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
164,725
|
|
|
|
11,329,042
|
|
|
|
|
(1)
|
|
Payments that have already accrued, vested or are not dependent on termination of employment
have been omitted from the table above.
|
|
(2)
|
|
Cash Severance Payment
. Upon Mr. Garcias termination upon his disability or his death, he
would have been entitled to receive a pro rata portion of the annual non-equity incentive
compensation based on time of service and annual performance. However, because Mr. Garcia was
not awarded an annual non-equity incentive payment for Fiscal 2007, he would not have been
entitled to receive such pro rata portion.
|
|
|
|
Based on Mr. Garcias historical compensation and a cash severance payment upon termination
estimated as of December 31, 2007, Mr. Garcias change in control benefits would not be subject
to the excise tax and no gross-up payments would be made.
|
|
(3)
|
|
Accelerated Equity Vesting
. Values in the table represent gain on unvested RSUs that would
have become vested using the December 31, 2007 share price for our common stock ($8.94).
|
|
(4)
|
|
Vested SERP Benefit
. Information in the table above represents the incremental value of the
benefit that exceeds the value already disclosed in the Pension Benefits table. These
incremental values are primarily due to accelerated vesting, specific benefit assumptions
defined in the SERP document and, in the case of death or a change in control, lump-sum
payment of the accrued benefit. Unvested contributions by the Company to the Executive
Deferred Compensation Plan offset any benefits Mr. Garcia may receive under the SERP.
|
|
(5)
|
|
Vested Deferred Compensation
. Amounts in the table represent the otherwise unvested portion
of Mr. Garcias deferred compensation account as of December 31, 2007. This unvested amount is
attributable to our contributions to the Executive Deferred Compensation Plan. These amounts
are included in the balances provided in the Non-Qualified Deferred Compensation table.
|
|
(6)
|
|
Other Benefits Continuation
. This column reflects estimated amounts for continuation of
benefits following termination. For involuntary termination without cause or voluntary
termination with good reason following a change in control, the amount reflects three years of
medical, dental, vision, life insurance, supplemental disability,
financial planning and outplacement, which
would have totaled $54,908 per year.
|
Estimated Payments to Mr. Gissinger Upon Termination or a Change in Control
The following table shows the potential payments upon a hypothetical December 31, 2007
termination, including following a change in control of the Company, for Mr. Gissinger. Mr.
Gissinger would not have received any payments upon voluntary termination of his employment (with
or without good reason) or involuntary termination of his employment (with or without cause). Mr.
Gissinger is not and would not have been eligible for early or normal retirement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
Accelerated
|
|
Contribution
|
|
Life
|
|
Vested
|
|
Other
|
|
|
|
|
Severance
|
|
Equity
|
|
Account
|
|
Insurance
|
|
Deferred
|
|
Benefits
|
|
|
|
|
Payment
|
|
Vesting
|
|
Plan Benefit
|
|
Proceeds
|
|
Compensation
|
|
Continuation
|
|
Total
|
|
|
(1)(2)($)
|
|
(1)(3)($)
|
|
(1)(4)($)
|
|
(1)($)
|
|
(1)(5)($)
|
|
(1)(6)($)
|
|
($)
|
Death
|
|
|
|
|
|
|
1,519,248
|
|
|
|
223,434
|
|
|
|
3,100,000
|
|
|
|
|
|
|
|
|
|
|
|
4,842,682
|
|
Disability
|
|
|
|
|
|
|
1,519,248
|
|
|
|
223,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,742,682
|
|
Immediately Following a Change in Control
|
|
|
|
|
|
|
1,519,248
|
|
|
|
223,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,742,682
|
|
Involuntary Without Cause or
Voluntary With Good Reason following
a Change in Control
|
|
|
15,303,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147,109
|
|
|
|
15,450,610
|
|
50
|
|
|
(1)
|
|
Payments that have already accrued, vested or are not dependent on termination of employment
have been omitted from the table above.
|
|
(2)
|
|
Cash Severance Payment
. Upon Mr. Gissingers termination upon his disability or his death, he
would have been entitled to receive a pro rata portion of the annual non-equity incentive
compensation based on time of service and annual performance. However, because Mr. Gissinger
was not awarded an annual non-equity incentive payment for Fiscal 2007, he would not have been
entitled to receive such pro rata portion.
|
|
|
|
The estimated value of Mr. Gissingers gross-up payment upon a specified termination of his
employment following a change in control (including both reimbursement for any excise tax and
associated taxes on that payment) is $6,852,972 and is included in the cash severance amount
above. The gross-up amount in the above table is based on an excise tax rate of 20%, a 35%
federal income tax rate, a 1.45% Medicare tax rate and a 9.30% state income tax rate.
|
|
(3)
|
|
Accelerated Equity Vesting
. Values in the table represent gain on unvested RSUs that would
have become vested using the December 31, 2007 share price for our common stock ($8.94).
|
|
(4)
|
|
Vested Executive Contribution Account Plan Benefit
. As previously described, Mr. Gissinger
participates in our Executive Contribution Account Plan; he does not participate in the SERP.
Upon a change in control, any unvested Executive Contribution Account Plan balance is
immediately vested. As of December 31, 2007, Mr. Gissingers entire Executive Contribution
Account Plan account balance was unvested. This value is also disclosed in the Pension
Benefits table.
|
|
(5)
|
|
Vested Deferred Compensation
. Mr. Gissinger is
fully vested in his Executive Deferred Compensation Plan
balance, which consists entirely of his voluntary deferrals.
|
|
(6)
|
|
Other Benefits Continuation
. This column reflects estimated amounts for continuation of
benefits following termination. For involuntary termination without cause or voluntary
termination with good reason following a change in control, the amount reflects three years of
medical, dental, vision, life insurance, supplemental disability, executive physical and
financial planning and outplacement, which would have totaled $49,036 per year.
|
Bank of America Acquisition
We have entered into an agreement and plan of merger with Bank of America. Consummation of the
Bank of America acquisition would be a change in control as the term is used in this section.
The estimated amounts shown in the preceding tables of this section assume a hypothetical change in
control and termination, where applicable, on December 31, 2007, and accordingly, the amounts shown
above are different from amounts that would be paid to a named executive officer upon or following
the consummation of the Bank of America acquisition. Additional detail regarding estimated
payments to the named executive officers upon the consummation of the Bank of America acquisition
may be found in the Registration Statement under the heading Countrywides Officers and Directors
Have Financial Interests in the Merger.
51
DIRECTOR COMPENSATION AND BENEFITS
The compensation program for our non-employee directors is intended to compensate them for the
time and effort required of a director given the size and complexity of the Companys operations.
Portions of the compensation program utilize our common stock or stock equivalents in order to
further align the interests of the directors with all other stockholders of the Company and to
motivate the directors to focus on the long-term financial interests of the Company. Directors who
are Company employees are not paid any fees for serving on the Board or for attending Board
meetings.
Cash Compensation Paid to Board Members
The following table shows the cash fee arrangements we have with our non-employee directors
for their board and committee work.
|
|
|
|
|
|
Type of Fee
|
|
Amount ($)
|
|
Annual Board Retainer
|
|
$
|
70,000
|
|
|
Annual Committee Chair Retainer.
|
|
$
|
7,500
|
|
|
Lead Director Retainer
|
|
$
|
25,000
|
|
(may be paid in the form of restricted stock)
|
Meeting Fees
|
|
|
|
|
|
In-Person Board Meeting
|
|
$
|
1,500
|
|
|
Telephonic Board Meeting
|
|
$
|
750
|
|
|
All non-employee directors are entitled to reimbursement for expenses incurred in attending
meetings of the Board and its committees.
Restricted Stock Awards
Under the Companys 2003 Non-Employee Directors Fee Plan each director receives, on an annual
basis, shares of restricted stock with an aggregate value equal to $220,000, based on the fair
market value of our common stock on the date of grant. Starting January 1, 2007, the fair market
value was deemed to be the closing price of our common stock on the date of grant. Restrictions on
such restricted stock lapse upon the earlier of (i) the business day immediately preceding the
first anniversary of the grant, (ii) such directors death or disability, (iii) a change in control
of the Company, or (iv) the date such director becomes a Director Emeritus.
Deferred Compensation Program for Non-Employee Directors
Pursuant to the 2003 Non-Employee Directors Fee Plan, each non-employee director may elect to
defer all or part of his or her directors fees in the form of cash or stock units and may also
elect to defer all or part of his or her restricted stock awards in the form of restricted stock
units. In each case any deferral is made to a specified date or to the date of the directors
separation from the Board. Directors fees and restricted stock deferred as stock units and
restricted stock units earn dividend equivalents, which are paid in the form of additional stock
units and restricted stock units, at the same time and in the same amount as dividends are paid on
the common stock. Under this plan, in respect of Fiscal 2007, Ms. Brown and Messrs. Dougherty and
Robertson elected to defer some or all of their directors fees and Ms. Brown and Messrs.
Cunningham, Dougherty, Melone and Parry elected to defer all of their restricted stock awards. As
of December 31, 2007, the account balances for each non-employee director under the plan were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Brown
|
|
Mr. Cisneros
|
|
Mr. Cunningham
|
|
Mr. Donato
|
|
Mr. Dougherty
|
|
Mr. Melone
|
|
Mr. Parry
|
|
Mr. Robertson
|
|
Mr. Russell
|
|
Mr. Snyder
|
|
$ 0
|
|
$
|
0
|
|
|
$
|
839,648
|
|
|
$
|
1,201,149
|
|
|
$
|
0
|
|
|
$
|
117,835
|
|
|
$
|
181,778
|
|
|
$
|
622,748
|
|
|
$
|
0
|
|
|
$
|
567,480
|
|
For Ms. Brown, Mr. Cisneros and Mr. Dougherty, amounts in their deferred accounts were
distributed to each of them at the time of their separation from the
Board. The account balances for each director under the plan are not held in a
trust. Participants are unsecured creditors of the Company in respect of amounts deferred.
Director Charitable Award Program and Matching Gift Program
Each current director other than Mr. Sambol may participate in the Companys Director
Charitable Award Program, which is designed to recognize the value in supporting worthy, qualified
charities and to enhance the Companys ability to attract and retain directors with outstanding
experience and ability. Directors participation vests ratably over five years. The Company may
contribute to a qualified charity selected by such director and approved by the Company in the
amount of $1,000,000 on behalf of such director and $2,000,000 on behalf of the Chairman and
co-founder, Angelo R. Mozilo, with such contributions to be made over a ten-year period with the
first installment made at the earlier of ten years after the directors retirement from the Board
or at the Board members death. The Charitable Award Program is funded by life
52
insurance policies on directors, and the program is not intended to result in a substantial
cost to the Company. Directors derive no direct financial benefit from the Director Charitable
Award Program because all charitable contribution tax deductions accrue solely to the Company. The
Company may terminate the Charitable Award Program at any time. On June 13, 2007, the Board amended
the Companys Director Charitable Award Program to limit participation in the program to current
participants. Directors appointed to the Board after June 13, 2007, including Mr. Sambol, are not
eligible to participate in the program.
The Company has established a Directors Matching Gift Program in which the Company will
match, dollar for dollar, up to a maximum total amount per non-employee director of $5,000
annually. The Directors Matching Gift Program is part of the
Companys strategic philanthropy
mission reflecting the long-standing reputation of the executives and employees of the Company for
giving back to the communities in which they live and work.
Director Emeritus
Effective June 13, 2007, the Board limited participation in the Companys Director Emeritus
program to current participants and eliminated the eligibility of current and future directors.
The closure of the Director Emeritus program will have no effect on the benefits extending to the
current participants in the Director Emeritus program.
Non-employee directors who retired from the Board after a minimum of three years of service
were eligible to participate in the program. So long as a Director Emeritus agrees to provide up to
five hours per month of advisory and consulting services to the Company and its subsidiaries, as
the Board may determine, and to attend meetings as requested by the Board, an eligible individual
may serve as Director Emeritus for life. Furthermore, each Director Emeritus is required to refrain
from entering into an employment or consulting agreement with, or from supplying any information or
materials to, any competitor of the Company or its subsidiaries throughout his or her participation
in the program.
The Companys Director Emeritus program further provides that (i) stock options granted to the
Director Emeritus during his or her tenure as a director continue to vest as provided under the
Companys applicable equity incentive plans, (ii) shares of restricted stock granted to a Director
Emeritus during his or her tenure as a director automatically vest upon such director becoming a
Director Emeritus, (iii) a Director Emeritus is entitled to participate in the Companys health
plans, and (iv) a Director Emeritus who, upon request by the Board, attends a Board meeting, is
entitled to a payment in an amount not less than the then-current per meeting fee payable to
non-employee directors for attending Board meetings plus expenses incurred in connection with such
attendance.
53
Director Summary Compensation Table
The table below summarizes the compensation paid by the Company to non-employee directors for
Fiscal 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
Earned
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
or Paid
|
|
Stock
|
|
Compensation
|
|
All Other
|
|
|
Name
|
|
in Cash
|
|
Awards
|
|
Earnings
|
|
Compensation
|
|
Total
|
(1)
|
|
($)
|
|
($)(2)(3)(4)
|
|
($)(5)
|
|
($)(6)
|
|
($)
|
Kathleen Brown (7)
|
|
|
24,250
|
|
|
|
(164,377
|
)
|
|
|
|
|
|
|
251,662
|
|
|
|
111,535
|
|
Henry G. Cisneros
|
|
|
79,537
|
|
|
|
55,598
|
|
|
|
|
|
|
|
55,461
|
|
|
|
190,596
|
|
Jeffrey M. Cunningham
|
|
|
104,121
|
|
|
|
275,577
|
|
|
|
1,394
|
|
|
|
57,078
|
|
|
|
438,170
|
|
Robert J. Donato
|
|
|
109,750
|
|
|
|
219,978
|
|
|
|
3,178
|
|
|
|
58,640
|
|
|
|
391,546
|
|
Michael E. Dougherty
|
|
|
54,431
|
(8)
|
|
|
219,978
|
|
|
|
971
|
|
|
|
47,377
|
|
|
|
322,757
|
|
Martin R. Melone
|
|
|
176,000
|
(9)
|
|
|
275,947
|
|
|
|
|
|
|
|
50,377
|
|
|
|
502,324
|
|
Robert T. Parry
|
|
|
177,921
|
(9)
|
|
|
275,947
|
|
|
|
|
|
|
|
57,377
|
|
|
|
511,245
|
|
Oscar P. Robertson
|
|
|
95,500
|
(10)
|
|
|
219,978
|
|
|
|
1,449
|
|
|
|
47,377
|
|
|
|
364,304
|
|
Keith P. Russell
|
|
|
182,500
|
(9)
|
|
|
345,696
|
|
|
|
|
|
|
|
58,392
|
|
|
|
586,588
|
|
Harley W. Snyder
|
|
|
185,649
|
(9)
|
|
|
275,947
|
|
|
|
1,495
|
|
|
|
52,334
|
|
|
|
515,424
|
|
|
|
|
(1)
|
|
Angelo R. Mozilo, the Companys Chairman of the Board and Chief Executive Officer, and David
Sambol, the President and Chief Operating Officer of the Company, are not included in this
table because they are employees of the Company and thus receive no compensation for their
services as directors. The compensation received by Messrs. Mozilo and Sambol as employees of
the Company for Fiscal 2007 and Fiscal 2006 is shown in the Summary Compensation Table.
|
|
(2)
|
|
The amounts in this column reflect the dollar amount recognized for financial statement
reporting purposes for Fiscal 2007 in accordance with FAS 123R and thus may include amounts
from awards granted in and prior to Fiscal 2007.
|
|
|
|
The grant date fair value of restricted stock awards granted April 2, 2007 computed in
accordance with FAS 123R is as follows: for each of Messrs. Cunningham, Donato, Dougherty
and Robertson: $219,978; and for each of Messrs. Melone, Parry, Russell and Snyder: $275,947,
of which $219,978 is attributed to restricted stock awarded to each for his service as a
director and $55,968 is attributed to restricted stock awarded to each for his service as a
director of Countrywide Bank, FSB (the Bank), a subsidiary of the Company.
|
|
|
|
Mr. Cisneros resigned from the Board effective October 18, 2007, which resulted in the
forfeiture of his April 2, 2007 restricted stock award, so the value reported only reflects
amounts from awards granted prior to Fiscal 2007.
|
|
|
|
Ms. Brown resigned from the Board effective March 29, 2007, and as a result, she was not
granted a stock award on April 2, 2007. In addition, upon Ms. Browns resignation from the
Board, she forfeited 6,035 shares of restricted stock. The amount previously reported in this
column for Ms. Brown for Fiscal 2006 included the dollar amount recognized for financial
statement reporting purposes for such restricted stock in accordance with FAS 123R. The
negative number reported in this column for Fiscal 2007 reflects the negative expense
recognized for financial statement reporting purposes with respect to the forfeiture of such
restricted stock in accordance with FAS 123R.
|
|
(3)
|
|
The amounts of restricted stock underlying the awards granted April 2, 2007 that vested on
April 1, 2008 are as follows: for each of Messrs. Cunningham, Donato, and Robertson: 6,721
restricted shares; and for each of Messrs. Melone, Parry, Russell and Snyder: 8,431 restricted
shares.
|
|
|
|
Mr. Cisneros forfeited 6,721 shares of restricted stock upon his resignation.
|
|
|
|
Mr. Dougherty did not stand for re-election as a director at our 2007 annual meeting.
Accordingly his service as a director terminated effective June 13, 2007. In lieu of Mr.
Doughertys participation in our Director Emeritus program, the Board resolved on June 13, 2007
to accelerate the vesting of 6,721 shares of restricted stock awarded to Mr. Dougherty that
would have been forfeited upon the termination of his service absent such acceleration.
|
|
(4)
|
|
Messrs. Cunningham, Dougherty, Melone and Parry elected to defer 100% of their restricted
stock awards for Fiscal 2007 attributable to their services as directors. Any restricted
stock attributable to their services as Bank directors was not eligible for deferral.
|
|
(5)
|
|
All of the amounts reflect above-market earnings on compensation deferred by the directors
pursuant to our 2003 Non-Employee Directors Fee Plan.
|
54
|
|
|
(6)
|
|
The amounts in this column reflect perquisites and other personal benefits (including health benefits and
spousal travel), contributions by the Company to qualified charities pursuant to our
Charitable Awards Program, and charitable donations by the Company pursuant to our Directors
Matching Gift Program.
|
|
|
|
Health Benefits
: In Fiscal 2007, Messrs. Cisneros, Cunningham, Donato and Russell participated
in the Companys group health plans consisting of medical and dental benefits. The annual cost
to the Company in Fiscal 2007 for each participating director, net of premium payments made by
the director, was $8,084, $9,701, $6,263, and $6,015, respectively.
|
|
|
|
Spousal Travel
: The annual cost to the Company for spousal travel of directors in Fiscal 2007
was as follows: for Mr. Snyder, $4,957.
|
|
|
|
Charitable Awards Program
: We fund the Charitable Award Program through life insurance
policies and $47,377 is allocated as All Other Compensation for each director for Fiscal
2007. Such amount was determined by dividing the aggregate life insurance premiums by 14, which
was the number of current and former directors, including Directors Emeritus and Mr. Mozilo
(but not including Mr. Sambol) for Fiscal 2007. On June 13, 2007, the Board amended the
Companys Charitable Award Program to limit participation in the program to then-current
participants.
|
|
|
|
Matching Gift Program
: During Fiscal 2007, $23,000 was paid out under the Directors Matching
Gift Program as follows:
|
|
|
|
|
|
Director
|
|
Matching Contribution ($)
|
Robert J. Donato
|
|
|
5,000
|
|
Martin R. Melone
|
|
|
3,000
|
|
Robert T. Parry
|
|
|
10,000
|
|
Keith P. Russell
|
|
|
5,000
|
|
Our matching contribution on behalf of Mr. Parry above the $5,000 limit was a one-time
exception to our policy.
|
|
|
(7)
|
|
Ms. Brown resigned from the Board effective March 29, 2007, which resulted in the forfeiture
of 6,035 shares of restricted stock that would have vested on April 2, 2007. Because Ms. Brown
had served as a director for substantially all of the vesting period for these shares, the
Compensation Committee and the Board approved a cash payment to Ms. Brown of $204,285 in lieu
thereof, which was the value on March 29, 2007 of the 6,035 shares that were forfeited. Ms.
Brown elected to convert $24,221 of her Fiscal 2007 cash compensation (totaling $228,535) into
stock and to defer such stock. Stock in Ms. Browns deferral account was distributed to her at
the time of her separation from the Board.
|
|
(8)
|
|
Mr. Dougherty elected to defer $31,622 of his Fiscal 2007 cash compensation into a deferred
cash account.
|
|
(9)
|
|
Fees include additional cash compensation received by the director as a member of the Board
of Directors of the Bank. In Fiscal 2007, Messrs. Melone, Parry, Russell and Snyder earned
$67,750, $66,500, $73,500 and $65,000, respectively, for their service on the Banks Board of
Directors. The annual retainer for a member of the Banks Board of Directors is $50,000 and
the annual committee chair retainer is $5,000. Meeting fees are $1,500 for each in-person Bank
Board meeting and $1,000 for each telephonic Bank Board meeting. Each member of the Bank Board
of Directors also received restricted stock with a fair market value of $55,968 in Fiscal
2007, rounded down to the next whole share. Effective January 1, 2008, a director who is also
a member of the Board of Directors of the Bank will no longer be compensated for service on
both boards of directors, except that such directors will be entitled to receive a meeting fee
of $750 if a telephonic meeting of the Bank Board is not held on the same day as a Board
meeting and a meeting fee of $1,500 if an in-person meeting of the Bank Board is not held on
the same day as a Board meeting.
|
|
(10)
|
|
Mr. Robertson elected to defer $85,950 of his Fiscal 2007 cash compensation into a deferred
cash account.
|
55
Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows, with respect to each person or entity known to the Company to be
the beneficial owner of more than five percent of the Companys common stock as of December 31,
2007, except as noted, based on a review of publicly available statements of beneficial ownership
filed with the SEC on Schedules 13D and 13G or other information known to the Company through April
4, 2008: (i) the number of shares of the Companys common stock so owned and (ii) the percentage of
all shares outstanding represented by such ownership.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
Name and Address of Beneficial Owner
|
|
Owned
|
|
Percent of Class (1)
|
Bank of America, N.A. (2)
|
|
|
111,111,111
|
|
|
|
16.1
|
%
|
Bank of America Corporate Center
100 North Tryon Street
Charlotte, NC 28255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legg Mason Capital Management, Inc. (3)
|
|
|
68,136,544
|
|
|
|
11.8
|
%
|
100 Light Street
Baltimore, MD 21202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brandes Investment Partners, L.P. (4)
|
|
|
55,323,828
|
|
|
|
9.6
|
%
|
11988 El Camino Real, Suite 500
San Diego, CA 92130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital World Investors (5)
|
|
|
35,836,620
|
|
|
|
6.1
|
%
|
333 South Hope Street
Los Angeles, CA 90071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SRM Global Master Fund Limited Partnership (6)
|
|
|
31,717,524
|
|
|
|
5.4
|
%
|
c/o SRM Fund Management (Cayman) Limited
P.O. Box 309 GT, Ugland House
South Church Street, George Town
Grand Cayman, Cayman Islands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FMR LLC (7)
|
|
|
31,397,873
|
|
|
|
5.4
|
%
|
82 Devonshire Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The percent of class reported in this column has been calculated based upon the number of
shares of common stock outstanding as of December 31, 2007 and may be different than the
percent of class reported in statements of beneficial ownership filed with the SEC.
|
|
(2)
|
|
Consists of 20,000 shares of the Companys 7.25% Series B Non-Voting Convertible Preferred
Stock, which Preferred Stock is convertible, at any time at the option of the holder, into the
number of shares of common stock of the Company equal to the liquidation preference of the
Series B Non-Voting Convertible Preferred Stock (currently equal
to $100,000 per share) being
converted divided by the conversion price (currently equal to $18.00 per share), as more fully
described in the Companys Current Report on Form 8-K filed with the SEC on August 28, 2007.
|
|
(3)
|
|
As reported in Amendment No. 3 to Schedule 13G filed with the SEC on February 14, 2008 by
Legg Mason Capital Management, Inc., an investment adviser (Legg Mason) and LMM LLC, an
investment adviser (LMM). In the Schedule 13G, Legg Mason and LMM disclosed that they are
investment advisers that manage various accounts that have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of, the shares. Legg
Mason and LMM reported that they have shared voting and dispositive power as to 68,136,544
shares.
|
56
|
|
|
(4)
|
|
As reported in a Schedule 13G filed with the SEC on February 14, 2008 by Brandes Investment
Partners, L.P., an investment advisor, Brandes Investment Partners, Inc., a control person,
Brandes Worldwide Holdings, L.P., a control person, Charles H. Brandes, a control person,
Glenn R. Carlson, a control person, and Jeffrey A. Busby, a control person (collectively, the
Brandes reporting entities). In the Schedule 13G, the Brandes reporting entities disclosed
shared voting power as to 45,547,406 shares and shared dispositive power as to 55,323,828
shares.
|
|
(5)
|
|
As reported in a Schedule 13G filed with the SEC on February 11, 2008 by Capital World
Investors (CWI), a division of Capital Research and Management Company, an investment
advisor. In the Schedule 13G, CWI disclosed that one or more of its clients have the right to
receive or the power to direct the receipt of dividends from, or the proceeds from the sale
of, the shares. CWI reported that it has sole voting power as to 84,065,000 shares and sole
dispositive power as to 35,836,620 shares. Includes 4,577,620 shares that may be issued upon
conversion of $240,000,000 principal amount of series A floating rate convertible debentures
within 60 days of April 4, 2008.
|
|
(6)
|
|
As reported in Amendment No. 1 to Schedule 13D filed with the SEC on February 13, 2008 by (a)
SRM Global Master Fund Limited Partnership (the Master Fund), an exempted limited
partnership; (b) SRM Global Fund General Partner Limited (the General Partner), an exempted
company serving as the general partner of the Master Fund; (c) SRM Fund Management (Cayman)
Limited (the Investment Manager), an exempted company serving as the investment manager of
the Master Fund; and (d) Jonathan Wood, a director and principal of the Investment Manager
(collectively, the SRM Reporting Persons). The SRM Reporting Persons disclosed shared
voting and dispositive power as to 31,717,524 shares. On April 16, 2008, the SRM Reporting
Persons filed Amendment No. 2 to Schedule 13D with the SEC reporting beneficial ownership of
47,217,524 shares as of April 15, 2008, which includes 1,688,600 shares underlying 16,886
exchange traded put options that were sold by the Master Fund in open market transactions.
|
|
(7)
|
|
As reported in a Schedule 13G filed with the SEC on February 14, 2008 by FMR LLC, a parent
holding company, and its direct and indirect subsidiaries FMR LLC, and Edward C. Johnson 3d,
Chairman of FMR LLC. In the Schedule 13G, Fidelity Management & Research Company
(Fidelity), a wholly-owned subsidiary of FMR LLC and a registered investment adviser,
reported that it is the beneficial owner of 29,743,952 shares as a result of acting as
investment adviser to various registered investment companies. Edward C. Johnson 3d and FMR
LLC, through control of Fidelity and certain funds (the Funds), each has sole power to
dispose of the 29,743,952 shares owned by the Funds. 1,913 shares are beneficially owned by
Strategic Advisers, Inc., a wholly-owned subsidiary of FMR LLC and a registered investment
adviser, as a result of its providing investment advisory services to individuals. 24,000
shares are beneficially owned by Pyramis Global Advisors, LLC (PGALLC), an indirect
wholly-owned subsidiary of FMR LLC and a registered investment adviser, as a result of its
serving as investment adviser to institutional accounts, non-U.S. mutual funds, or registered
investment companies owning such shares. Edward C. Johnson 3d and FMR LLC, through its
control of PGALLC, each has sole dispositive power over 24,000 shares and sole power to vote
or to direct the voting of 24,000 shares owned by the institutional accounts or funds advised
by PGALLC as reported above. 1,222,613 shares are beneficially owned by Pyramis Global
Advisors Trust Company (PGATC), an indirect wholly-owned subsidiary of FMR LLC and a bank,
as a result of its serving as investment manager of institutional accounts owning such shares.
Edward C. Johnson 3d and FMR LLC, through its control of Pyramis Global Advisors Trust
Company, each has sole dispositive power over 1,222,613 shares and sole power to vote or to
direct the voting of 1,060,417 shares owned by the institutional accounts managed by PGATC.
405,395 shares are beneficially owned by Fidelity International Limited (FIL), a qualified
institution, and various foreign-based subsidiaries, as a result of providing investment
advisory and management services to a number of non-U.S. investment companies and certain
institutional investors. FIL has sole dispositive power over 405,395 shares owned by the
related international funds and sole power to vote or direct the voting of 364,995 shares and
no power to vote or direct the voting of 40,400 shares held by the related international
funds. The address of Fidelity and Strategic Advisors, Inc. is 82 Devonshire Street, Boston,
Massachusetts 02109. The address of PGALLC and PGATC is 53 State Street, Boston, MA 02109.
The address of FIL is Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda.
|
57
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following information sets forth the number of shares of our common stock beneficially
owned as of April 4, 2008 (except for shares held in the
Companys 401(k) Plan, which are as of
March 31,2008) by each of the Companys directors, each executive
officer named in the Summary Compensation Table herein, and all directors and executive officers
as a group. Unless otherwise indicated, beneficial ownership numbers represent shares over which
the beneficial owner has sole voting and dispositive power.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Exercisable
|
|
|
|
|
|
|
|
|
Shares
|
|
Stock
|
|
|
|
|
|
Percent of
|
Name or Group
|
|
Owned(1)
|
|
Options(2)
|
|
Total
|
|
Class(3)(%)
|
Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Angelo R. Mozilo
|
|
|
1,223,665
|
(4)
|
|
|
5,672,074
|
|
|
|
6,895,739
|
|
|
|
1.2
|
%
|
Eric P. Sieracki
|
|
|
182,482
|
(5)
|
|
|
504,328
|
|
|
|
686,810
|
|
|
|
|
|
David Sambol
|
|
|
75,278
|
(5)
|
|
|
2,810,984
|
|
|
|
2,886,262
|
|
|
|
|
|
Carlos M. Garcia
|
|
|
507,401
|
(5)
|
|
|
1,053,656
|
|
|
|
1,561,057
|
|
|
|
|
|
Andrew Gissinger III
|
|
|
1,857
|
(5)
|
|
|
549,466
|
|
|
|
551,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Employee Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey M. Cunningham
|
|
|
158,180
|
|
|
|
72
|
|
|
|
158,252
|
|
|
|
|
|
Robert J. Donato
|
|
|
189,647
|
(6)
|
|
|
189,404
|
|
|
|
379,051
|
|
|
|
|
|
Martin R. Melone
|
|
|
68,222
|
(7)
|
|
|
|
|
|
|
68,222
|
|
|
|
|
|
Robert T. Parry
|
|
|
61,430
|
|
|
|
|
|
|
|
61,430
|
|
|
|
|
|
Oscar P. Robertson
|
|
|
66,179
|
|
|
|
|
|
|
|
66,179
|
|
|
|
|
|
Keith P. Russell
|
|
|
66,525
|
|
|
|
|
|
|
|
66,525
|
|
|
|
|
|
Harley W. Snyder
|
|
|
125,301
|
|
|
|
|
|
|
|
125,301
|
|
|
|
|
|
All Directors and executive
officers as a group (19 persons)
|
|
|
2,993,179
|
|
|
|
12,792,428
|
|
|
|
15,785,607
|
|
|
|
2.6
|
%
|
|
|
|
(1)
|
|
Excludes outstanding, stock-settled RSUs and associated dividend equivalents
as follows: for
Mr. Mozilo, 1,163,874; for Mr. Sieracki, 37,611; for Mr. Sambol, 1,543,174;
for Mr. Garcia,
21,492; and for Mr. Gissinger, 21,492. Includes the following
vested and deferred stock units: for
Mr. Mozilo, 79,138, for Mr. Cunningham, 33,485, for Mr. Melone, 13,494,
for Mr. Parry, 20,816
and for Mr. Snyder, 6,070. Includes 35,369 shares of restricted
stock held by Messrs. Donato,
Robertson, Russell and Snyder. Includes the 35,369 unvested deferred
RSUs for Messrs.
Cunningham, Melone and Parry.
|
|
(2)
|
|
Represents shares subject to stock options and SARs that were exercisable on April 4, 2008 or
will become exercisable within 60 days of April 4, 2008.
|
|
(3)
|
|
Percentage information is omitted for individuals who own less than one percent of the
outstanding shares of the common stock and shares deemed outstanding due to exercisable
options and SARs. There were 583,344,170 shares of the Companys common stock outstanding at
the close of business on April 4, 2008.
|
|
(4)
|
|
Includes 126,999 shares for The Mozilo Family Foundation. Mr. Mozilo has no pecuniary
interest in the foundations shares and disclaims beneficial ownership of those shares. The
number of shares reported also includes 2,892 shares owned by Phyllis Mozilo, wife of Mr.
Mozilo, as to which Mr. Mozilo disclaims beneficial ownership. Mr. Mozilo shares voting and
dispositive power with respect to 215,166 shares owned by The Mozilo Living Trust. The number
of shares reported also includes 764,889 shares held in the Companys 401(k) Plan and 25,000 shares in a Grantor Retained Annuity Trust.
|
|
(5)
|
|
Includes 14,024, 11,930, 41,565 and 1,857 shares held in our 401(k) Plan by Messrs. Sieracki,
Sambol, Garcia and Gissinger, respectively.
|
|
(6)
|
|
Mr. Donato has pledged 111,000 shares as security.
|
|
(7)
|
|
Mr. Melone shares voting and dispositive power with respect to 17,650 shares owned by The
Melone Family Trust.
|
58
CHANGE IN CONTROL TRANSACTIONS
As more fully detailed in a Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 17, 2008, and the Registration Statement on Form S-4 of Bank of America
Corporation (Bank of America) filed on February 12, 2008, as amended
by Amendment No. 1 to the Registration Statement on Form S-4 of Bank of America filed on March 27, 2008,
we entered into an agreement and plan of merger (the Merger Agreement) with Bank of
America. The Merger Agreement provides for Countrywide to merge (the Merger) with and into a
wholly-owned merger subsidiary of Bank of America (Merger Sub), with Merger Sub continuing as the
surviving company. The terms of the Merger Agreement provide for the conversion of each share of
Countrywide common stock into 0.1822 of a share of Bank of America common stock. Consummation of
the Merger, which is currently anticipated to occur in the third quarter of 2008, is subject to
certain conditions, including, among others, Countrywide stockholder and regulatory approvals. The
Merger Agreement contains certain termination rights for Countrywide and Bank of America as the
case may be, applicable upon the occurrence of certain events specified in the Merger Agreement.
The Merger Agreement provides that, in the event of the termination of the Merger Agreement under
specified circumstances, Countrywide may be required to pay Bank of America a termination fee equal
to $160 million. The Merger Agreement provides for both Countrywide and Bank of America to conduct
their respective businesses in the ordinary course until the Merger is completed and not to take
certain actions during the period from the date of the Merger Agreement until the date of
completion of the Merger.
59
Item 13.
Certain Relationships and Related Transactions, and Director
Independence
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Policies and Procedures with Respect to Related Person Transactions
The Company recognizes that related person transactions can present potential or actual
conflicts of interest and create the appearance that Company decisions are based on considerations
other than the best interests of the Company and its stockholders. Accordingly, as a general
matter, it is the Companys preference to avoid related person transactions.
The Audit and Ethics Committee has approved a written Related Person Transaction Policy. This
policy requires the Companys legal department to submit to the Audit and Ethics Committee for
review and approval all reported related person transactions for which disclosure is required
pursuant to the rules and regulations of the SEC. A related person transaction includes any
transaction, arrangement or relationship in which the Company is a participant and in which any of
the following persons has or will have a direct or indirect interest:
|
|
|
an executive officer, director or director nominee of the Company;
|
|
|
|
|
any person who is known to be the beneficial owner of more than 5% of the
Companys common stock;
|
|
|
|
|
any person who is an immediate family member (as defined in the rules and
regulations of the SEC) of an executive officer, director or director nominee or
beneficial owner of more than 5% of the Companys common stock; and
|
|
|
|
|
any firm, corporation or other entity in which any of the foregoing persons is
employed or is a partner or principal or in a similar position or in which such person,
together with any other of the foregoing persons, has a 5% or greater beneficial
ownership interest.
|
As part of the review and approval process, the Audit and Ethics Committee considers all
relevant facts and circumstances available to the Audit and Ethics Committee, including the
recommendations of management. No member of the Audit and Ethics Committee participates in any
review, consideration or approval of any related person transaction involving such member or any of
his or her immediate family members, except that such member is required to provide all material
information concerning the related person transaction to the Audit and Ethics Committee.
The Audit and Ethics Committee has delegated to the Chair of the Audit and Ethics Committee
the authority to pre-approve or ratify any related person transaction in which the aggregate amount
involved is expected to be less than $500,000. The Audit and Ethics Committee has also pre-approved
each of the following related person transactions under the terms of the Companys Related Person
Transaction Policy:
|
|
|
any employment by the Company of a relative of an executive officer where the
employment was entered into in the ordinary course of business and the relatives
compensation is in accordance with the Companys practices applicable to employees with
equivalent qualifications and responsibilities holding similar positions;
|
|
|
|
|
any transaction with another company where the related persons only relationship
is as an employee (but not an executive officer), director or beneficial owner of less
than 10% of that companys shares and the aggregate amount involved does not exceed the
lesser of $200,000 or two percent of that companys total annual revenues;
|
|
|
|
|
any charitable contribution, grant or endowment by the Company to a charitable
organization, foundation or university where the related persons only relationship is
as an employee or a director (but not an executive officer) and the aggregate amount
involved does not exceed the lesser of $200,000 or two percent of the charitable
organizations total annual receipts;
|
|
|
|
|
any transaction where the related persons interest arises solely from the
ownership of the Companys common stock and all holders of such common stock receive the
same benefit on a pro rata basis (e.g., dividends); and
|
|
|
|
|
any transaction with a related person involving services, products or
relationships provided by the Company in the ordinary course of business on arms length
terms available to third parties.
|
The Company may not enter into any related person transaction unless and until it is approved
by the Chair or the Audit and Ethics Committee in accordance with the Companys Related Person
Transaction Policy.
Relationships and Transactions
Effective March 29, 2007, Ms. Brown resigned from the Board. During her tenure as a director,
Ms. Brown served as head of West Coast Municipal Finance for Goldman, Sachs & Co. Goldman, Sachs &
Co., together with its affiliates and
60
subsidiaries (Goldman), provides a significant amount of financing and provides advisory and other services to the
Company and the Companys subsidiaries under various arrangements. Goldman, through one of its
subsidiaries, also provides investment advisory services to certain of the Companys executives. In
connection with many of these arrangements, the Company and the Companys subsidiaries pay fees to
Goldman. The Company expects these arrangements to continue and to enter into similar arrangements
with Goldman in the future. Ms. Brown did not provide any services to the Company, the Companys
subsidiaries or the Companys executives or receive any compensation related to any of these
arrangements.
During
Fiscal 2007, one or more of the Companys mortgage lending subsidiaries, in the ordinary
course of business, made mortgage loans and/or home equity lines of credit available to directors
and executive officers and their immediate families. Such mortgage loans and/or home equity lines
of credit were made on substantially the same terms, including interest rates and collateral
requirements, as those prevailing at the time for comparable transactions with other persons not
related to the Company, and they did not involve more than the normal risk of collectibility or
present other unfavorable features. Generally, the Company sells these mortgage loans and/or home
equity lines of credit soon after origination into the secondary market in the ordinary course of
business.
Certain directors and executive officers have immediate family members who are employed by the
Company. The compensation of each such family member was established by the Company in accordance
with its employment and compensation practices applicable to employees with equivalent
qualifications and responsibilities holding similar positions. None of the executive officers has a
material interest in these employment relationships nor do any of them share a home with these
employees. The employees disclosed below are five of the Companys approximately 50,000 member
workforce. None of them report directly to any of the Companys executive officers.
During
2007, the Company employed the following relatives of the Companys directors and
executive officers for the compensation indicated: a son of Angelo R. Mozilo, who has been an
employee since June 1, 2005, was employed as a Branch Manager, for approximately $323,330 in base
salary and bonus; a son-in-law of Angelo R. Mozilo, who has been an employee since 1984, was
employed as Director, Fixed Income Products, for approximately $574,064 in base salary and bonus; a
brother of Carlos M. Garcia, who had been an employee since 1997, was employed as Senior Vice
President, Finance, for approximately $181,349 in base salary and bonus; a brother-in-law of David
Sambol, who has been an employee since 2000, was employed as an Executive Vice President, Strategic
Business Alliance Development, for approximately $447,989 in base salary and bonus and a grant of
3,500 SARs on the terms set forth below; and a brother of Kevin W. Bartlett, who has been an
employee since 2003, was employed as a Senior Vice President, Operations Analysis, for
approximately $130,807 in base salary and bonus. The SARs granted in April 2007
vest at a rate of one-third per
year and allow the holder to receive an amount of our
common stock on the exercise date equal to the appreciation in the
value of our common stock since the date of grant. In addition, each relative was entitled to
receive employee benefits generally available to all employees.
None of the reported transactions required the review or approval of the Audit and Ethics
Committee pursuant to the Related Person Transaction Policy.
Board Independence
At least annually, the Corporate Governance and Nominating Committee reviews the independence
of each non-employee director and makes recommendations to the Board and the Board affirmatively
determines whether each director qualifies as independent. The Board recognizes that members of the
Audit and Ethics Committee or the Compensation Committee may be subject to more stringent standards
of independence. Each director must keep the Corporate Governance and Nominating Committee fully
and promptly informed as to any developments that might affect the directors independence.
Mr. Mozilo, the Companys Chairman of the Board and Chief Executive Officer, and Mr. Sambol,
the Companys President and Chief Operating Officer, are the
only directors who also serve as employees of the
Company. The Board has determined that each of the current directors,
except for Mr. Mozilo and Mr. Sambol, as a result of their management positions, has no material
relationship with the Company and is independent in accordance with the independence standards of
the NYSE and within the meaning of the Companys Categorical Board Independence Standards. Each of
Henry G. Cisneros, a former director who resigned from the Board on October 18, 2007, and Michael
E. Dougherty, who did not stand for re-election at our 2007 annual meeting, was also determined by
the Board to have been independent in accordance with the independence standards of the NYSE and
within the meaning of the Companys Categorical Board Independence Standards. Kathleen Brown, a
former director, is head of West Coast Municipal Finance for Goldman,
which provides a significant amount of financing to,
and performs advisory and other services for, the Company. Prior to her resignation from the Board
effective March 29, 2007,
61
Ms. Brown was not considered to be independent in accordance with the independence standards of the NYSE and within the meaning of our Categorical Board Independence
Standards as a result of her position with Goldman. The Companys Categorical Board Independence Standards are available on the Companys website at
www.countrywide.com
and are available in print upon written request to the Companys Secretary
.
During Fiscal 2007, each Board member who served on a committee, other than Kathleen Brown,
was independent in accordance with the independence standards of the NYSE and the Companys
Categorical Board Independence Standards. Each of the members of the Compensation Committee is
considered independent by the Board according to the NYSE listing standards, an outside
director pursuant to Section 162(m) of the Internal Revenue Code, and a non-employee director
pursuant to Section 16 of the Exchange Act.
62
Item 14.
Principal Accountant Fees and Services
AUDITOR FEES AND SERVICES
KPMG Fees
The following table shows the fees billed by KPMG for the audit and other services it provided
to the Company in respect of Fiscal 2007 and Fiscal 2006.
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
Audit Fees(1)
|
|
$
|
14,836,000
|
|
|
$
|
13,759,148
|
|
Audit-Related Fees(2)
|
|
|
4,445,410
|
|
|
|
6,586,108
|
|
Tax Fees(3)
|
|
|
|
|
|
|
|
|
All Other Fees(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
19,281,410
|
|
|
$
|
20,345,256
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
These are fees paid for professional services rendered during the audit of the Companys
annual consolidated financial statements, for audits of internal controls and for the reviews
of the consolidated financial statements included in the Companys quarterly reports on Form
10-Q and for services normally provided in connection with statutory or regulatory filings or
engagements and comfort letters related to debt and equity offerings.
|
|
(2)
|
|
These are fees paid for assurance and related services reasonably related to the performance
of the audit and review of our consolidated financial statements that are not reported under
Audit Fees, including fees relating to agreed-upon procedures related to securitization
transactions, audits of financial statements of employee benefit plans and internal control reports.
|
|
(3)
|
|
These would include fees paid for professional services rendered for tax compliance, tax
planning and tax advice.
|
|
(4)
|
|
These would include fees paid for permissible work performed by KPMG that does not fall into
the above categories.
|
The Audit and Ethics Committee approved all services performed by KPMG during Fiscal 2007 in
accordance with applicable requirements. Before the Companys independent registered public
accounting firm is engaged to provide any audit or non-audit services, the engagement must be
reviewed and specifically approved by the Audit and Ethics Committee. The Audit and Ethics
Committee has delegated to the Chair of that committee the authority to approve KPMGs services.
63
INCORPORATION
BY REFERENCE
To the extent that this Amendment No. 1 is incorporated by reference
into any other filing by us under the Securities Act of 1993 or the
Exchange Act, the sections of this Amendment No. 1 entitled
Compensation Committe Report to the extent permitted by
the rules of the SEC will not be deemed incorporated, unless
specifically provided otherwise in such filing.
DISCLAIMER
This Amendment No. 1 contains statements regarding future individual
and company performance targets and goals. These targets and goals
are disclosed in the limited context of our compensation programs and
should not be understood to be statements of managements
expectations or estimates of results or other guidance. We specifically
caution investors not to apply these statements to other contexts.
64
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
|
|
|
|
|
Countrywide Financial Corporation
|
|
|
By:
|
/s/
Angelo R. Mozilo
|
|
|
|
Angelo R. Mozilo
|
|
|
|
Chairman of the Board
and Chief
Executive Officer
|
|
|
Dated:
April 23, 2008
65
COUNTRYWIDE FINANCIAL CORPORATION
FORM 10-K/A
December 31, 2007
INDEX OF EXHIBITS
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
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