COUNTRYWIDE FINANCIAL CORPORATION
Exhibit 10.5
COUNTRYWIDE FINANCIAL CORPORATION
2006 Equity Incentive Plan
Performance-Based
The Participant specified below has been granted these Stock Appreciation Rights (“SARs”)
by Countrywide Financial Corporation, a Delaware corporation (the “Company”) under the
terms of the Countrywide Financial Corporation 2006 Equity Incentive Plan (the “Plan”).
The SARs shall be subject to the following terms and conditions set forth herein as well as the
terms of the Plan (the “SAR Terms”).
Section 1. Award. In accordance with the Plan, the Company hereby grants to the
Participant these SARs which represent the right to receive the aggregate dollar value of
appreciation (“Appreciation”) in the Fair Market Value of the Company’s Stock, par value [$___]
per share, on the number of shares (the “Covered Shares”) set forth on the SAR Statement (the
“Statement”) linked electronically hereto. The Appreciation shall be computed by multiplying (A)
the excess, if any, of (i) the Fair Market Value of a share of Stock on the exercise date, over
(ii) the Fair Market Value of a share of Stock or a related option, as the case may be, on the
Grant Date (the “Xxxxx Xxxxx”), times (B) the number of Covered Shares settled. The Appreciation
shall be payable by the Company only in [stock OR cash OR combination]. These SARs are in all
respects limited and conditioned as provided herein. Except where the context clearly implies to
the contrary, any capitalized terms in this SAR shall have the meaning ascribed to them under the
Plan.
Section 2. Terms of Award. The following words and phrases relating to the grant of
the SARs shall have the following meanings:
(a) The “Participant” is the individual recipient of the SAR Award on the specified Grant
Date.
(b) The “Grant Date” is [ ].
(c) The number of “Covered Shares” is the number of Company Shares awarded to the Participant
on the Grant Date as reflected in the corporate records and set forth on the Statement.
(d) The Xxxxx Xxxxx” is $[___] per share.
Section 3. Vesting. Subject to the limitations of the SAR Terms, each installment of
Covered Shares of the SAR (“Installment”) shall become vested and exercisable on and after the
“Vesting Date” for such Installment as described in the following schedule if, and only if, both
(i) the Participant is employed by the Company at all times from the Grant Date through the vesting
date and (ii) the Earnings Per Share (“EPS”) goals of the Company have been attained pursuant to
the following schedule:
| Cumulative Percentage of | ||||
| Shares Exercisable | Vesting Date* | Cumulative EPS Goals | ||
[___]%
|
[Insert Date] | $[XX.XX] (EPS for [Insert year] only) | ||
[___]%
|
[Insert Date] | $[XX.XX] (EPS for [Insert year] only) | ||
[___]%
|
[Insert Date] | $[XX.XX] (EPS for [Insert year] only) | ||
Remaining unvested shares
|
[Insert Date] | $[XX.XX] (EPS for [Insert year] only) |
(a) Notwithstanding the foregoing provisions of this Section 3, the SAR shall become fully
exercisable upon the earliest of the following events to occur, whether or not the cumulative EPS
Goals have been met: (i) a Change of Control that occurs on or before the Participant’s
Termination of Service; or (ii) Participant’s Termination of Service as a result of the
Participant’s Death, Disability or Retirement.
(b) The SAR may only be exercised on or after the Participant’s Termination of Service only as
to that portion of the Covered Shares for which it was exercisable immediately prior to the
Participant’s Termination of Service, or became exercisable on the date of the Participant’s
Termination of Service.
Section 4. Expiration Date. The SAR shall not be exercisable after the Company’s
close of business on the last business day that occurs prior to the Expiration Date. The
“Expiration Date” shall be the earliest to occur of:
(a) the date of the Participant Termination of Service due to Cause;
(b) the five-year anniversary of the Grant Date;
(c) the twelve (12) month anniversary of the Participant’s Termination of Service if the
Termination of Service occurs due to Death, Disability or Retirement; or
(d) the three (3) month anniversary of the Participant’s Termination of Service if the
Termination of Service occurs for reasons other than Death, Disability, Retirement or Cause;
provided, however, that if the Participant returns to employment with, or as a director or
consultant to, the Company, within three (3) months after the Termination of Service, such
termination shall have no effect on the SAR and the Participant shall have the same number of
shares and the same vesting schedule as set forth in this Agreement.
Notwithstanding the foregoing provisions of this Section 4(d), in the event a Participant dies
during the periods provided for in subsections (c) or (d) above, the SAR shall not expire, and
shall remain exercisable, until the one (1) year anniversary of the date of Death, but in no event
beyond the expiration date provided in subsection (b) above.
| * | Provided Cumulative EPS Goals are achieved. |
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Section 5. Settlement.
(a) Method of Exercise. Subject to the SAR Terms and the Plan, the SAR may be exercised in
whole or in part by filing an exercise notice with the Secretary of the Company at its corporate
headquarters prior to the Company’s close of business on the last business day that occurs prior to
the Expiration Date. The notice requirement may only be satisfied by (i) the proper use of a
specified electronic medium (phone, intranet, internet or other), whether or not such medium is the
property of, or maintained, by the Company or a third party service provider, or (ii) any other
method prescribed by the Committee;] provided, however, the Committee shall retain the right to
limit or expand the method of exercise to any one or more of the above methods with respect to any
individual Participant or group or class of Participants. Such notice shall specify the number of
Covered Shares which the Participant elects to exercise the SAR rights. In the event this SAR is
exercised by any person or persons after the legal disability or Death of the Participant, such
notice shall be accompanied by appropriate proof of the right of such person or persons to exercise
this SAR.
(b) Payment of Appreciation. As soon as practicable following the exercise of all or a
portion of the SAR, the Company shall deliver to the Participant the Appreciation [in cash] OR [in
shares of Common Stock, based on the Fair Market Value of such shares on the date of exercise, less
any shares to satisfy withholding obligations. The certificate or certificates for the number of
shares of Common Stock so determined shall be registered in the name of the person or persons so
exercising this SAR (or, if this SAR shall be exercised by the Participant and if the Participant
shall so request in the notice exercising this SAR, shall be registered in the name of the
Participant and the Participant’s spouse, jointly, with right of survivorship or a trust
established by the Participant for estate planning purposes) and shall be delivered as provided
above to or upon the written order of the person or persons exercising this SAR. All shares of
Common Stock that shall be delivered upon the exercise of this SAR as provided herein shall be
fully paid and non-assessable by the Company.]
Section 6. Withholding. The settlement of the SARs is subject to withholding of all
applicable taxes.
Section 7. Rights of the Participant. The Participant shall not be, or deemed to be,
for any purpose, the owner of any Covered Shares subject to any SARs.
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Section 8. Transferability of SAR. This SAR, or a portion thereof, may be
transferable or assignable to a member or members of the Participant’s “immediate family,” as such
term is defined in Rule 16a-1(e) under the Exchange Act, or to a trust for the benefit solely of a
member or members of the Participant’s immediate family, or to a partnership or other entity whose
only owners are members of the Participant’s immediate family (such transferee being a
“Participant”), subject to the terms and conditions of the Plan. No SAR is transferable by the
Participant other than by will or by the laws of descent and distribution, and during the
Participant’s life, may be exercised only by the Participant. It may not be assigned, transferred
(except as aforesaid), pledged or hypothecated by the Participant in any way whether by operation
of law or otherwise, and shall not be subject to execution, attachment or similar process. Any
attempt at assignment, transfer, pledge or hypothecation, or other disposition of this SAR contrary
to the provisions hereof, and the levy of any attachment or similar process upon this SAR, shall be
null and void and without effect. Notwithstanding the above, an SAR may be assigned, transferred,
pledged or hypothecated by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order.
Section 9. Heirs and Successors. The SAR Terms shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether
by merger, consolidation, purchase of assets or otherwise, all or substantially all of the
Company’s assets and business. If any rights of the Participant or benefits distributable to the
Participant under this Agreement have not been settled or distributed, respectively, at the time of
the Participant’s Death, such rights shall be settled and payable to the Designated Beneficiary,
and such benefits shall be distributed to the Designated Beneficiary, in accordance with the
provisions of this Agreement and the Plan. The “Designated Beneficiary” shall be the beneficiary
or beneficiaries designated by the Participant in a writing filed with the Committee on the form
found in HRCentral, or such other form as the Committee may require. The designation of
beneficiary form may be amended or revoked from time to time by the Participant. If a deceased
Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the
Participant, any rights that would have been payable to the Participant and shall be payable to the
legal representative of the estate of the Participant. If a deceased Participant designates a
beneficiary and the Designated Beneficiary survives the Participant but dies before the settlement
of Designated Beneficiary’s rights under this Agreement, then any rights that would have been
payable to the Designated Beneficiary shall be payable to the legal representative of the estate of
the Designated Beneficiary.
Section 10. Administration. The authority to manage and control the operation and
administration of the SAR Terms and the Plan shall be vested in the Committee, and the Committee
shall have all powers with respect to the SAR Terms as it has with respect to the Plan. Any
interpretation of the SAR Terms or the Plan by the Committee and any decision made by it with
respect to the SAR Terms or the Plan are final and binding on all persons.
Section 11. Plan Governs. Notwithstanding anything in the SAR Terms to the contrary,
the SAR Terms shall be subject to the terms of the Plan, a copy of which may be obtained by the
Participant from the office of the Secretary of the Company; and the SAR Terms are subject to all
interpretations, amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan. Notwithstanding anything in the SAR Terms
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to the contrary, in the event of any discrepancies between the corporate records and the
Statement, the corporate records shall control.
Section 12. Not An Employment Contract. The SARs will not confer on the Participant
any right with respect to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would
otherwise have to terminate or modify the terms of such Participant’s employment or other service
at any time.
Section 13. Amendment. The SAR Terms may be amended in accordance with the provisions
of the Plan, and may otherwise be amended by written agreement of the Participant and the Company
without the consent of any other person.
Section 14. Section 409A Amendment. The Committee reserves the right (including the
right to delegate such right) to unilaterally amend this Agreement without the consent of the
Participant in order to maintain an exclusion from the application of, or to maintain compliance
with, Code Section 409A. Participant’s acceptance of this Award constitutes acknowledgement and
consent to such rights of the Committee.
Section 14. Statement and Modifications. The SAR granted to the Participant under the
SAR Terms set forth in this Agreement shall be set forth on the Statement. The Participant hereby
acknowledges and agrees that the Statement may be revised from time to time by the Company to
reflect additional grants of SARs, exercises of SARs and any permitted modifications to the Plan
and SARs granted thereunder. Unless the Participant provides written notice to the Company’s SAR
Administrator within thirty (30) days of receipt of the Statement at the principal office of the
Company in Calabasas, California, or such other addresses as may be communicated to the
Participant, the Statement (including any revisions incorporated therein) shall be binding on the
Participant, without further notice to or acknowledgement by the Participant. If no notice is
received from the Participant within the thirty (30) day period, then the Participant shall be
deemed to have acknowledged that the Statement is binding with respect to the information contained
therein.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its name and on
its behalf, all as of the Grant Date and, by clicking the Accept Button below, the Participant
acknowledges acceptance of the terms and conditions of this Agreement.
COUNTRYWIDE FINANCIAL CORPORATION
By:
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Its: |
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Yes, I do accept
(Click here to view grant information. Use your HRCentral password to log in)
(Click here to view grant information. Use your HRCentral password to log in)
No, I do not accept
(Click here to reject and void the grant)
(Click here to reject and void the grant)
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