Document:

exv10w1

 

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

BY AND BETWEEN

INDYMAC BANK, F.S.B.

AND

RICHARD H. WOHL

EFFECTIVE SEPTEMBER 1, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. Term
	 	 	1	 
	 
	 	 	 	 
	2. Position, Duties and Responsibilities
	 	 	1	 
	 
	 	 	 	 
	3. Scope of This Agreement and Outside Affiliations
	 	 	1	 
	 
	 	 	 	 
	4. Compensation and Benefits
	 	 	2	 
	 
	 	 	 	 
	(a) Base Salary
	 	 	2	 
	(b) Incentive Compensation
	 	 	2	 
	(c) Equity Compensation
	 	 	4	 
	(d) Deferred Compensation
	 	 	4	 
	(e) Additional Benefits
	 	 	4	 
	(f) Travel
	 	 	5	 
	(g) Certain Perquisites and Business-Related Benefits
	 	 	5	 
	(h) Future Alternative Compensation Structure
	 	 	6	 
	 
	5. Termination
	 	 	6	 
	 
	 	 	 	 
	(a) Disability
	 	 	7	 
	(b) Death
	 	 	8	 
	(c) Cause
	 	 	9	 
	(d) Other Than For Cause or Disability (not in connection with a Change in Control)
	 	 	10	 
	(e) Good Reason
	 	 	11	 
	(f) Voluntary Resignation (other than Retirement or Expiration of the Employment Term)
	 	 	11	 
	(g) Change in Control
	 	 	12	 
	(h) Notice of Termination
	 	 	13	 
	(i) Expiration of Employment Term or Retirement
	 	 	13	 
	(j) Retirement
	 	 	13	 
	 
	6. Certain Additional Payments by Employer
	 	 	14	 
	 
	 	 	 	 
	7. Reimbursement of Business Expenses
	 	 	17	 

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	 	 	Page	 
	8. Indemnity
	 	 	17	 
	 
	 	 	 	 
	9. Miscellaneous
	 	 	17	 
	 
	 	 	 	 
	(a) Successorship
	 	 	17	 
	(b) Notices
	 	 	17	 
	(c) Entire Agreement
	 	 	17	 
	(d) Waiver
	 	 	18	 
	(e) California Law
	 	 	18	 
	(f) Arbitration
	 	 	18	 
	(g) Confidentiality
	 	 	18	 
	(h) No Solicitation
	 	 	18	 
	(i) Cooperation
	 	 	19	 
	(j) Consideration; Remedies Of Employer
	 	 	19	 
	(k) Reformation
	 	 	19	 
	(l) Moral Obligation
	 	 	19	 
	(m) Severability
	 	 	19	 
	(n) No Obligation to Mitigate
	 	 	20	 
	(o) Adjustment of Options
	 	 	20	 
	(p) Legal Fees
	 	 	20	 
	(q) Code Section 409A
	 	 	20	 
	 
	10. Regulatory Authority
	 	 	21	 
	 
	 	 	 	 
	11. Sarbanes-Oxley
	 	 	22	 
	 
	 	 	 	 
	APPENDIX A
	 	 	A-1	 

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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

          THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of
September 1, 2007 by and between IndyMac Bank, F.S.B. (“Employer”) and Richard H. Wohl
(“Officer”).

WITNESSETH:

          WHEREAS, Employer and Officer have previously entered into that certain Employment Agreement,
effective as of November 1, 2002 (the “Prior Agreement”);

          WHEREAS, Employer and Officer desire to amend and restate the Prior Agreement immediately into
the form of this Agreement;

          WHEREAS, Employer desires to obtain the benefit of continued services of Officer and Officer
desires to continue to render services to Employer and its affiliates (collectively, the
“Affiliates”); and

          WHEREAS, Employer and Officer desire to set forth the terms and conditions of Officer’s
employment with Employer and its Affiliates under this Agreement.

          NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the
parties hereto agree as follows:

     1. Term.

          (a) Employer agrees to employ Officer and Officer agrees to serve Employer and its Affiliates,
in accordance with the terms hereof, for a term beginning on the date hereof and ending on December
31, 2012, unless earlier terminated in accordance with the provisions hereof (the “Employment
Term”).

     2. Position, Duties and Responsibilities. Employer and Officer hereby agree that, subject to
the provisions of this Agreement, Officer shall serve as President of Employer. Employer agrees
that Officer shall have the authority and duties customary for his positions in similarly situated
entities and such other duties, commensurate with his position, as assigned by the Chief Executive
Officer (the “CEO”) of Employer from time to time. Officer shall have such executive power and
authority as shall reasonably be required to enable him to discharge his duties in the offices
which he may hold. All compensation paid to Officer by Employer or any of its Affiliates shall be
aggregated in determining whether Officer has received the benefits provided for herein, but
without prejudice to the allocation of costs among the entities to which Officer renders services
hereunder.

     3. Scope of This Agreement and Outside Affiliations. During the term of this Agreement,
Officer shall devote his full business time and energy, except as expressly provided below, to the
business, affairs and interests of Employer and its Affiliates, and matters related thereto.
Officer shall report only to the CEO and shall perform his duties, subject to his authority.
Officer agrees to serve without additional remuneration as the chief executive officer or director
of one or more (direct or indirect) subsidiaries or Affiliates of Employer as the CEO

 

 

may from time to time reasonably request, subject to appropriate authorization by the
Affiliate or subsidiary involved and any limitation under applicable law, provided that Officer
shall be indemnified and covered by directors’ and officers’ liability insurance of Employer as
provided under Section 8 hereof with regard to such service. Officer’s failure to discharge an
order or perform a function because Officer reasonably and in good faith believes such would
violate a law or regulation or be dishonest shall not be deemed a breach by him of his obligations
or duties pursuant to any of the provisions of this Agreement, including without limitation
pursuant to Section 5(c) hereof.

          Officer may make and manage personal business investments of his choice and serve in any
capacity with any civic, educational or charitable organization, or any governmental entity or
trade association, without seeking or obtaining approval by the CEO, provided such activities and
services do not materially interfere or conflict with the performance of his duties hereunder.
Officer may serve as a director (or on the advisory committee) of corporations or other business
enterprises with prior approval of the CEO which shall not be unreasonably withheld, provided such
activities or services do not materially interfere or conflict with the performance of Officer’s
duties hereunder.

     4. Compensation and Benefits.

          (a) Base Salary. During the Employment Term, Employer shall pay to Officer a base salary at
the annual rate of $750,000 (the “Base Salary”). At the discretion of the CEO, and with
approval of the Management Development and Compensation Committee (the “Compensation Committee”) of
the Board of Directors of Employer (the “Board”), the Base Salary may be increased from time to
time but shall not be reduced. Any increased rate shall thereafter be the rate of Base Salary
hereunder.

          (b) Incentive Compensation. Except as otherwise provided herein, Officer shall receive an
annual bonus for 2007 in accordance with the terms of the Prior Agreement and the previously
approved award. Commencing with the 2008 fiscal year, Officer shall receive the following
incentive compensation for each fiscal year of the Employment Term:

     (i) Short Term Annual Incentive Compensation. Pursuant to Employer’s short
term annual incentive plan, as in effect from time to time (which plan shall be intended to
be compliant with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”)), subject to Section 4(b)(iv) below, Officer shall receive Short Term Annual
Incentive Compensation (“STAIC”) for each fiscal year of the Employment Term. The
STAIC shall be calculated utilizing a base level amount equal to one-half of one percent
(0.5%) of Employer’s prior fiscal year net income as reflected in the Employer’s financial
statements for the prior fiscal year (subject to adjustment as provided herein) (the
“Base Level”), which Base Level shall be multiplied by a percentage determined by an
individual annual short-term incentive plan pursuant to the Senior Manager Cash Incentive
Plan Policy.

     Notwithstanding the foregoing definition of Base Level, in the event that Employer’s net
income for a prior year was negative or, in the sole discretion of the Compensation
Committee, reflected a substantial decline from the previous year, the Compensation

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Committee may, in its sole discretion, within the time period permitted by section 162(m) of
the Code for setting such year’s annual bonus goals, elect to use one-half of one percent
(0.5%) of Employer’s current fiscal year net income (the “Alternative Base Level”).
In such event, Officer’s STAIC award for such fiscal year shall be the greater of the amount
calculated pursuant to the terms described in this Section 4(b)(i) without regard to the
prior sentence, or seventy-five percent (75%) of the Alternative Base Level. The STAIC
shall be paid in the calendar year following the calendar year to which the STAIC relates
but no later than March 15 of such year.

     (ii) Long Term Annual Incentive Compensation. Officer shall receive an annual
Long Term Annual Incentive Compensation (“LTAIC”) award, which LTAIC award shall
generally be made at the same time as all other annual equity awards are made to senior
managers of Employer. Each such LTAIC shall consist of the following (which the parties
acknowledge is consistent with the current LTAIC arrangements of Employer’s senior
management team):

     (A) An amount equal to twenty-five percent (25%) of the sum of Officer’s Base
Salary and prior year’s STAIC, which LTAIC award shall be awarded, in the discretion
of the Compensation Committee, in either (x) restricted stock under Employer’s 2002
Stock Incentive Plan, as amended and restated or any successor plan (the
“Plan”), which award shall provide for a vesting schedule of no greater than
three (3) years, or (y) a cash amount, which amount shall be credited to Officer’s
account under the terms of Employer’s deferred compensation plan established for
purposes of deferring the portion of Officer’s LTAIC under this Section
4(b)(ii)(A)(y) (the “LTAIC Deferral Plan”) and has an option to invest in
Employer stock, which award in either case shall have no forfeiture or clawback
provisions based on Officer’s post-employment activities (except as otherwise
required by applicable law); and

     (B) An amount equal to fifty percent (50%) of Officer’s prior year’s STAIC,
which amount shall be awarded in the form of stock options pursuant to the terms of
the Plan (measured on the same basis as stock options are measured for purposes of
all stock option grants to senior managers of Employer) and which shall vest ratably
on each of the three anniversaries of the grant of such stock options and shall have
no forfeiture or clawback provisions based on Officer’s post-employment activities
(except as otherwise required by applicable law).

Notwithstanding the foregoing, Officer shall be eligible to receive an LTAIC award in 2008
(for 2007) under the terms of Sections 4(b)(i) and 4(b)(ii) (including, but not limited to,
being measured on the same basis as stock options are measured for purposes of all stock
option grants to senior managers of Employer), as if such programs were already in place
and paid generally at the same time as all other annual equity awards are made to senior
managers of Employer, provided that the portion of Officer’s LTAIC award under Section
4(b)(ii)(A) shall be paid in the form of stock options pursuant to the terms of the Plan
and which shall vest ratably on each of the first three (3) anniversaries of the grant of
such stock options. Officer shall receive no fewer than 100,000 stock options pursuant to
this 2008 LTAIC award.

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          (c) Equity Compensation. The terms and conditions regarding Officer’s equity award grants
made pursuant to the Prior Agreement shall continue to vest and otherwise remain in effect with
their terms.

          (d) Deferred Compensation. On January 1, 2003 (the “Credit Date”), Employer credited
Officer’s account under the IndyMac Bancorp, Inc. Deferred Compensation Plan (the “Deferred
Compensation Plan”) with $1.5 million (the “Deferred Compensation Credit”). Such
amount plus any accrued earnings thereon (the “Deferred Amount”) is eighty percent (80%)
vested as of the date hereof and the remaining twenty percent (20%) will vest on December 31, 2007
or earlier as provided below. The Deferred Amount shall become payable to Officer in accordance
with the Deferred Compensation Plan and Officer’s distribution election thereunder; provided
however, that in the event of a distribution pursuant to Officer’s “separation from service” (as
defined in Code Section 409A), if Officer is a Specified Employee (as defined in Section 9(q)) on
the date of his separation from service, the distribution shall not be earlier than the earlier of
(i) the date six (6) months following such separation from service or (ii) Officer’s death. In the
event of the termination of Officer’s employment pursuant to Sections 5(c) or (f), any unvested
portion of the Deferred Amount shall be forfeited on the Termination Date. In all other cases, any
unvested portion of the Deferred Amount shall fully vest on Officer’s termination of employment.

          (e) Additional Benefits.

          (i) Officer shall also be entitled to participate, at a level commensurate with his
position, in any stock purchase plan, pension plan, deferred compensation plan, life and
medical insurance policy, or other plans or benefits, of Employer for senior officers
generally or for employees generally and that are not duplicative of the bonuses paid under
Section 4(b) of this Agreement, during the term of this Agreement as well as any benefits or
rights specifically provided for Officer (collectively, “Additional Benefits”);
provided, however, that Employer shall have no obligation to grant any stock options or other
equity awards to Officer except as provided in Section 4(b). Officer shall be entitled to
paid vacation in accordance with Employer’s vacation policy, but in no event less than five
(5) weeks per annum.

          (ii) Employer shall also provide medical, dental and vision insurance coverage for ten
(10) years from the Termination Date for Officer and his spouse (or solely for his spouse in
the case of Officer’s separation from service as a result of his death) and for any
dependents until the maximum age for a dependent allowable by Employer’s health and benefit
plans offered to all employees (“Eligible Dependents”) that, in conjunction with the
coverage available to Officer and his spouse pursuant to Medicare, if any, is substantially
similar in the aggregate (including percentage of premium cost sharing) to the coverage
provided to Officer and his spouse immediately prior to the Termination Date. The extended
medical, dental, and vision coverage available to Officer, his spouse and Eligible Dependents
pursuant to this Section 4(e)(ii) shall be referred to throughout this Agreement as the
“Extended Medical Coverage.” Employer will use its reasonable best efforts to provide the
Extended Medical Coverage in a manner that does not result in the inclusion of the benefit
amounts received through the Extended Medical Coverage from the income of Officer and his
spouse by operation of Section 105(h) of the

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Code. If such coverage is self-funded and not fully insured, it is intended that
Officer be deemed to have monthly taxable income in the value of the monthly premium for such
insurance. Employer’s obligations pursuant to this Section 4(e)(ii) shall be limited to
expenses incurred during the ten (10) year post-termination coverage period. Employer will
make, or cause the insurance company to make, any payments required under this Section
4(e)(ii) with regard to medical benefits within 30 days after delivery of Officer’s written
requests for payment, accompanied by such evidence of expenses incurred as the Employer may
reasonably require, but in no event later than December 31 of the year following the year in
which the expense was incurred. The amount payable or reimbursable under such insurance or
coverage for any one year shall not affect the amount reimbursable in any other year.
Officer’s right to reimbursement pursuant to this Section 4(e)(ii) shall not be subject to
liquidation or exchange for another benefit. Officer, his spouse and/or Eligible Dependents
shall provide to Employer evidence of coverage under any applicable health insurance policy
or Medicare supplemental health policy.

          (iii) This Agreement shall not affect the provision of any other compensation,
retirement or other benefit program or plan of Employer, except as provided herein.

          (f) Travel. In connection with business travel, Officer shall be permitted to travel
first class at Employer’s expense,

          (g) Certain Perquisites and Business-Related Benefits.

               (i) Club Memberships. Employer shall pay standard annual and monthly membership fees
and any business related charges for Officer’s participation in the two country clubs of
Officer’s choice (including, but not limited to, the initial fee and monthly and other
assessments). Employer shall make any such payment or reimburse Officer for any such
expense, as the case may be, within 30 days after receipt of written request for payment
accompanied by such evidence of payments due or expenses incurred as the Employer may
reasonably require, but in no event later that December 31 of the year following the year in
which the payment became due or the expense was incurred. The amount payable or reimbursable
by the Employer under this Section 4(g)(i) in any one year shall not affect the amount
payable or reimbursable in any other year.

               (ii) Car Allowance. Employer shall provide Officer with an appropriate luxury
automobile (as mutually agreed to by Officer and the CEO, but at no less than the level of
automobile provided by Employer to Officer on the Effective Date) for Officer’s exclusive use
and provide at Employer expense for car insurance, maintenance and operating expenses.
Officer shall have the right to replace the automobile every two (2) years.

               (iii) Executive Physician Services. Employer shall pay for the executive physician
services of Dr. Mark Gerard with Concierge Choice Physicians for Officer, including a full
tax gross-up for any imputed income to Officer resulting from such benefit. Employer shall
make such payment or reimburse Officer for any such expense, as the case may be, within 30
days after receipt of written request for payment

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accompanied by such evidence of payments due or expenses incurred as the Employer may
reasonably require, but in no event later that December 31 of the year following the year in
which the payment became due or the expense was incurred. The amount payable or reimbursable
by the Employer under this Section 4(g)(iii) in any one year shall not affect the amount
payable or reimbursable in any other year. Any such gross-up payment shall be paid
to Officer no later than December 31 of the year after the year Officer remits the applicable
tax. The annual amount that Employer shall be required to pay for such services shall not
exceed $5,000, exclusive of the tax gross-up.

               (iv) Financial Planning Services. Employer shall pay for the financial planning and tax
services of AYCO for Officer, including a full tax gross-up for any imputed income to Officer
resulting from such benefit. The annual amount that Employer shall be required to pay for
such services shall not exceed $35,000, exclusive of the tax gross-up. Employer shall make
such payment or reimburse Officer for any such expense, as the case may be, within 30 days
after receipt of written request for payment accompanied by such evidence of payments due or
expenses incurred as the Employer may reasonably require, but in no event later that December
31 of the year following the year in which the payment became due or the expense was
incurred. The amount payable or reimbursable by the Employer under this Section 4(g)(iv) in
any one year shall not affect the amount payable or reimbursable in any other year.
Any gross-up payment shall be paid to Officer no later than December 31 of the year
after the year Officer remits the applicable tax.

               (v) Life Insurance. In addition to the life insurance benefit provided by Employer to
all employees that Officer is eligible for and elects to avail, Employer shall provide an
additional portable term or universal life insurance policy on the life of Officer, for the
benefit of a beneficiary designated by Officer, with a death benefit equal to four (4) times
Officer’s Base Salary, with Officer not being required to make any payment thereon (other
than payment of any tax obligations).

               (vi) Long Term Disability. Employer shall provide Officer long term disability coverage
which shall provide annual benefits to Officer equal to sixty-five percent (65%) of his Base
Salary during any period that Officer is disabled, if the disability arose during the
Employment Term. Any disability payments to Officer pursuant to coverage obtained pursuant
to this Section 4(g)(v) shall not be subject to offset by severance benefits payable to
Officer pursuant to this Agreement.

          (h) Future Alternative Compensation Structure. The parties reserve the right at any time by
mutual agreement to amend this Agreement to provide for an alternative compensation structure that
they believe better reflects an identity of interest between Officer and stockholders.

     5. Termination. The compensation and benefits provided for herein and the employment of
Officer by Employer shall be terminated only as provided for below in this Section 5. For purposes
of this Agreement, a termination shall be deemed to occur only upon a separation from service, and
the term “separation from service” shall have the same meaning as set forth in Code Section 409A
and the Final 409A Regulations, as defined in Section 9(q):

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          (a) Disability. In the event that Officer shall fail, because of illness, injury or similar
incapacity, to render for six (6) consecutive months or for shorter periods aggregating one hundred
eighty (180) or more business days in any twelve (12) month period, the material services
contemplated by this Agreement (“Disability”), Officer’s full-time employment hereunder may
be terminated, by written Notice of Termination from Employer to Officer while Officer remains so
incapacitated; and thereafter, upon Officer’s separation from service:

          (i) Employer shall pay Officer a single severance payment as soon as practicable after
the Termination Date, but, subject to Section 9(q), in no event later than thirty (30) days
thereafter, an amount in cash equal to two (2) times the sum of: (A) the average of the Base
Salary in effect for the two (2) years immediately preceding the Termination Date, plus (B)
an amount equal to Officer’s prior year’s Base Level STAIC; provided however, that in no
event shall the aggregate amount payable under this
Section 5(a)(i) be less than $3.5 million,

          (ii) Employer shall pay Officer an amount equal to Officer’s STAIC, pro-rated from
January 1 of the year in which the separation from service occurs through the Termination
Date, based on Employer’s actual performance for the year of separation from service (with no
discretionary factor reduction), payable, subject to Section 9(q), in the calendar year
following the calendar year in which the Termination Date occurs at such time or times when
Employer would have paid such bonus to Officer if he had continued employment (the “Pro
Rata Annual Bonus”),

          (iii) Employer shall pay Officer an amount equal to Officer’s LTAIC, pro-rated from
January 1 of the year in which the separation from service occurs through the Termination
Date, based on Employer’s actual performance for the year of separation from service, payable
subject to Section 9(q), in the calendar year following the calendar year in which the
Termination Date occurs at such time or times when Employer would have paid such compensation
to Officer if he had continued employment (the “Pro Rata Long Term Bonus”),

          (iv) Any of Officer’s outstanding unvested options and any other equity or long-term
incentive awards shall become immediately vested, any vested options granted after the date
hereof shall remain exercisable until their full-term expiration date and any vested options
granted prior to the date hereof shall remain exercisable in accordance with the terms of the
grant and the Prior Agreement (the “Long-Term Incentive Compensation Treatment”),

          (v) Officer, his spouse and Eligible Dependents shall be entitled to Extended Medical
Coverage.

          (vi) All unvested amounts, including any earnings, credited to Officer’s accounts under
the Deferred Compensation Plan and the LTAIC Deferral Plan shall immediately become vested
and nonforfeitable. The amounts in Officer’s accounts shall be payable to Officer in
accordance with Officer’s distribution election under the Deferred Compensation Plan and the
LTAIC Deferral Plan, subject to Section 9(q) (the “Deferred Compensation Treatment”),

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          (vii) To the full extent permitted by law, so long as Employer (or a successor)
maintains directors’ and officers’ liability insurance for its executives or directors,
Employer shall continue to provide Officer following the Termination Date with directors’ and
officers’ liability insurance insuring Officer against insurable events which occur or have
occurred while Officer was a director or officer of Employer or an Affiliate or a fiduciary
of an employee benefit plan of any of the foregoing, such insurance to have policy limits
aggregating not less than the amount in effect immediately prior to the Termination Date or,
if higher, that provided to other officers or directors of Employer. In addition, Officer’s
rights of indemnification hereunder or otherwise with regard to service on behalf of Employer
or an Affiliate or a fiduciary of an employee benefit plan of any of the foregoing prior to
such termination (“Rights of Indemnification”) shall continue (the “Coverage
Protection”), and

          (viii) Officer shall be entitled to his accrued rights, including but not limited to
earned but unpaid Base Salary, accrued but unused vacations and earned but unpaid STAIC or
LTAIC for any prior completed fiscal year and any earned but unpaid benefits under any plan
or program of Employer, the STAIC and LTAIC being payable in the calendar year in
which the Termination Date occurs at such time or times when Employer would have paid such
compensation to Officer had he continued employment, but no later than March 15
th of such year, and the remaining accrued rights being paid within 30 days following
the Termination Date (“Accrued Amounts”).

          The determination of Disability shall be made only after Officer has failed to render services
for the above stated time periods and shall be made only after thirty (30) days notice to Officer
(which may run concurrently with the Notice of Termination). Prior to a separation from service as
a result of Disability, Officer shall continue to receive his full compensation and benefits during
any period of incapacity.

          (b) Death. In the event of Officer’s death during the term of this Agreement, the Officer’s
estate shall be entitled to the following, which for purposes of this Section 5(b) shall not be
subject to Section 9(q):

          (i) The Pro Rata Annual Bonus,

          (ii) The Pro Rata Long Term Bonus,

          (iii) The Deferred Compensation Treatment,

          (iv) The Long-Term Incentive Compensation Treatment,

          (v) Officer’s spouse and Eligible Dependents shall be entitled to Extended Medical
Coverage,

          (vi) The Coverage Protection, and

          (vii) The Accrued Amounts.

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          (c) Cause. Employer may terminate Officer’s employment under this Agreement for “Cause.” A
separation from service for Cause is a termination by reason of (i) a material breach of this
Agreement by Officer (other than as a result of incapacity due to physical or mental illness) that
is committed in bad faith or without reasonable belief that such breach is in the best interests of
Employer and which, for any breach that is remediable, or can be cured going forward, is not
remedied or cured within a reasonable period of time after receipt of written notice from Employer
specifying such breach, or (ii) Officer’s conviction by a court of competent jurisdiction of a
felony involving acts of fraud, embezzlement, dishonesty or moral turpitude, or (iii) entry of a
final non-appealable order duly issued by any federal or state regulatory agency having
jurisdiction in the matter removing Officer from office of IndyMac Bank or permanently prohibiting
him from participating in a material portion of the affairs of IndyMac Bank, provided that the
order resulted from act(s) of Officer which were committed in bad faith and without reasonable
belief that such act(s) were in the best interests of Employer.

          Notwithstanding the foregoing, Officer’s employment shall not be deemed to have been
terminated for Cause unless and until there have been delivered to Officer a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds of the non-employee directors of
the Board (the “Outside Directors”) (after reasonable notice to Officer and an opportunity
for Officer, together with Officer’s counsel, to be heard before the Outside Directors), finding
that in the Outside Directors’ good faith opinion Officer was guilty of conduct set forth above in
this Section 5(c) and specifying the particulars thereof in reasonable detail.

          If Officer shall be (A) convicted of a felony of a type set forth above or (B) shall be
suspended and/or temporarily prohibited from participating in the conduct of IndyMac Bank’s affairs
by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(3) and (g)(1)) by any federal or state regulatory authority having jurisdiction in the
matter, by the affirmative vote of two-thirds of the Outside Directors (after reasonable notice to
Officer and an opportunity for Officer, together with Officer’s counsel, to be heard before the
Outside Directors), provided that the provisions of the next paragraph have been complied with, the
Outside Directors may suspend Officer from some or all of his duties and authority while such
suspension or prohibition or conviction is in effect and, if they
elect to do so and
reasonably anticipate that making such payments will violate applicable law, shall also during such
period suspend Officer’s right to some or, if no duties are to be performed, all of Officer’s Base
Salary, STAIC and LTAIC accruing during such suspension period to the extent they reasonably
anticipate making such payment or portion of such payment, as the case may be, will violate
applicable law; provided, further that that if the conviction is overturned on appeal or if the
charges resulting in such suspension or prohibition are finally dismissed or if a final judgment on
the merits of such charges is issued in favor of Officer, then Officer shall be reinstated in full
with back amounts for the suspension period plus accrued interest at the rate then payable on
judgments. Notwithstanding the foregoing, any payment of back amounts shall be made at the
earliest date at which Employer reasonably anticipates that making such payment will not cause a
violation of applicable law.

          With regard to clause (B) above, (1) Employer shall use its best efforts to oppose and defend
against any such notice of charges as to which there are reasonable defenses and to permit Officer
to participate in such effort by counsel of his selection fully paid by Employer; (2)

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in the event the notice of charges is dismissed or otherwise resolved in a manner that will
permit Employer to resume its obligations to pay compensation hereunder, Employer shall promptly
make such payment hereunder; and (3) during the period of suspension, the vested rights of the
contracting parties shall not be affected except to the extent precluded by such notice.

          During the period that Employer’s obligations under Sections 4(a), 4(b), 4(d), 4(e) and 4(g)
hereof are suspended, Officer shall continue to be entitled to receive Additional Benefits under
Section 4(e) until the conviction of the felony has become final and non-appealable. When the
conviction of the felony has become final and non-appealable, all of Employer’s obligations
hereunder shall terminate; provided, however, that the termination of Officer’s employment pursuant
to this Section 5(c) shall not affect Officer’s entitlement to all benefits in which he has become
vested or which are otherwise payable in respect of periods ending prior to his Termination Date.
To the full extent permitted by law, so long as Employer (or a successor) maintains directors’ and
officers’ liability insurance for its executives or directors, Employer shall continue to provide
Officer following the Termination Date with directors’ and officers’ liability insurance insuring
Officer against insurable events which occur or have occurred while Officer was a director or
officer of Employer or an Affiliate or a fiduciary of an employee benefit plan of any of the
foregoing, such insurance to have policy limits aggregating not less than the amount in effect
immediately prior to the Termination Date or, if higher, that provided to other officers or
directors of Employer. In addition, Officer’s Rights of Indemnification shall continue. Officer
shall also be entitled to his Accrued Amounts.

          Upon termination for Cause, Officer is not entitled to any severance or bonus and all options
shall expire on the Termination Date. Anything herein to the contrary notwithstanding, termination
for Cause shall not include termination by reason of Officer’s job performance or a job performance
rating given to Officer for his job performance or the financial performance of Employer or any
affiliated company. This Section 5(c) is specifically subject to Section 10, and in the event of
any conflicts between such Sections, the provisions of Section 10 shall apply.

          (d) Other Than For Cause or Disability (not in connection with a Change in Control). If
during the term of this Agreement, Employer shall cause Officer to have a separation from service
other than for Cause or Disability (other than in connection with a Change in Control as provided
in Section 5(g)), then:

          (i) Employer shall pay Officer in a single severance payment as soon as practicable
after the Termination Date, but, subject to 9(q), in no event later than thirty (30) days
thereafter, an amount in cash equal to two and one-half (2.5) times the sum of: (A) the
average Base Salary in effect for the two years immediately preceding the Termination Date
and (B) an amount equal to Officer’s prior year’s Base Level STAIC; provided however, that in
no event shall the aggregate amount payable under this Section 5(d)(i) be less than $3.5
million,

          (ii) Employer shall pay Officer the Pro Rata Annual Bonus,

          (iii) Employer shall pay Officer the Pro Rata Long Term Bonus,

10

 

          (iv) Officer shall be entitled to the Long-Term Incentive Compensation Treatment,

          (v) Officer shall be entitled to the Deferred Compensation Treatment,

          (vi) Officer, his spouse and Eligible Dependents shall be entitled to Extended Medical
Coverage,

          (vii) Officer shall be entitled to the Protection Coverage, and

          (viii) Officer shall be entitled to his Accrued Amounts.

          (e) Good Reason. Officer may terminate Officer’s employment at any time for “Good Reason.”
“Good Reason” means that any one or more of the following have occurred without Officer’s written
consent (other than as a result of Officer’s Disability or termination of Officer’s employment for
Cause) which is not cured by Employer within thirty (30) days after written notice thereof is given
to Employer by Officer:

          (i) Other than temporarily as a result of Officer’s suspension as provided in Section
5(c), any diminution in Officer’s then titles or positions, including with IndyMac Bank, or
any material diminution in Officer’s then powers, reporting requirements, duties or
responsibilities, including with IndyMac Bank,

          (ii) Officer is not elected to the IndyMac Bank Board or Officer is removed from the
IndyMac Bank Board,

          (iii) Officer is required to relocate place of employment to a location which is more
than fifty (50) miles from IndyMac Bank’s current headquarters,

          (iv) Officer resigning at the request of the majority of the Board for Officer to
resign,

          (v) Any material breach by Employer of the terms of this Agreement.

          If during the term of this Agreement, Officer is separated from service on account of
Officer’s resignation for Good Reason (other than in connection with a Change in Control as
provided in Section 5(g)), Officer shall receive the payments and benefits described in Section
5(d).

          (f) Voluntary Resignation (other than Retirement or Expiration of the Employment Term). If
during the term of this Agreement, Officer shall resign other than for Good Reason or pursuant to
Retirement, then            upon such separation from service:

          (i) All of his rights to payment or benefits hereunder shall immediately terminate;
provided, however, that the termination of Officer’s employment pursuant to this Section 5(f)
shall not affect Officer’s entitlement to all benefits in which he has become vested or which
are otherwise payable in respect of periods ending prior to his termination of employment,

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          (ii) Any unvested options shall expire immediately and

          (A) Any vested stock options or other equity grants made to Officer after the
Effective Date of the Prior Agreement shall remain exercisable until the earlier of
three (3) months following the Termination Date or their full-term expiration, and

          (B) All vested options granted to Officer pursuant to the Prior Agreement shall
remain exercisable until the earlier of twelve (12) months following the Termination
Date or their full-term expiration,

          (iii) Officer shall be entitled to the Protection Coverage, and

          (iv) Officer shall be entitled to his Accrued Amounts.

          (g) Change in Control. During the term of this Agreement, if within two (2) years after a
Change in Control Officer has a separation from service (x) by Employer other than for Cause or
Disability or (y) by Officer for Good Reason, then:

          (i) Employer shall pay Officer in a single severance payment as soon as practicable
after the Termination Date, but, subject to Section 9(q), in no event later than thirty (30)
days thereafter, an amount in cash equal to three (3) times the sum of (A) the Base Salary in
effect for the two (2) years immediately preceding separation from service and (B) an amount
equal to Officer’s prior year’s Base Level STAIC; provided however, that in no event shall
the aggregate amount payable under this Section 5(g)(i) be less than $5.5 million,

          (ii) Officer shall be entitled to the Pro Rata Annual Bonus, which for purposes of this
Section 5(g) shall be calculated based on the greatest of (A) Employer’s actual performance,
(B) the prior year’s Base Level, or (C) the current year’s Base Level,

          (iii) Officer shall be entitled to the Pro Rata Long Term Bonus, which for purposes of
this Section 5(g) shall be calculated based on the greatest of (A) Employer’s actual
performance, (B) the prior year’s Base Level, or (C) the current year’s Base Level,

          (iv) Officer shall be entitled to the Long-Term Incentive Compensation Treatment,

          (v) Officer shall be entitled to the Deferred Compensation Treatment,

          (vi) Officer, his spouse and Eligible Dependents shall be entitled to Extended Medical
Coverage,

          (vii) Officer shall be entitled to the Protection Coverage, and

          (viii) Officer shall be entitled to his Accrued Amounts.

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          Notwithstanding anything contained herein, if a Change in Control occurs and Officer has a
separation from service other than for Cause or Disability or a Good Reason event occurs prior to
the Change in Control, and if such separation from service or event was at the request, suggestion
or initiative of a third party who has taken steps reasonably calculated to effect the Change in
Control, then Officer upon occurrence of the Change in Control shall be entitled to receive the
payments and benefits set forth in this Section 5(g), in lieu of the payments and benefits set
forth in Section 5(d).

          (h) Notice of Termination. Any purported termination by Employer or by Officer shall be
communicated by a written Notice of Termination to the other party hereto which indicates the
specific termination provision in this Agreement, if any, relied upon and which sets forth in
reasonable detail the facts and circumstances, if any, claimed to provide a basis for termination
of Officer’s employment under the provision so indicated. For purposes of this Agreement, no such
purported termination shall be effective without such Notice of Termination. The “Termination
Date” shall mean the date of termination or separation from service, as the case may be, which
shall be specified in the Notice of Termination, which shall be no less than thirty (30) or more
than sixty (60) days from the date of the Notice of Termination.

          (i) Expiration of Employment Term or Retirement. At the Officer’s separation from service
following the expiration of the Employment Term, subject to the Office of Thrift Supervision
Regulation Section 563.39(b), or upon separation from service due to Retirement as defined in
Section 5(j), then:

          (i) Officer shall be entitled to the Pro Rata Annual Bonus,

          (ii) Officer shall be entitled to the Pro Rata Long Term Bonus,

          (iii) Officer shall be entitled to the Long-Term Incentive Compensation Treatment,

          (iv) Officer shall be entitled to the Deferred Compensation Treatment,

          (v) Officer, his spouse and Eligible Dependents shall be entitled to Extended Medical
Coverage,

          (vi) Officer shall be entitled to the Protection Coverage, and

          (vii) Officer shall be entitled to his Accrued Amounts.

          (j) Retirement. Officer may terminate employment and incur a separation from service for
reason of Retirement at any time after satisfying the conditions for Retirement set forth below
and shall be entitled to the compensation and benefits described in Section 5(i) above. For
purposes of this Agreement, “Retirement” shall mean Officer’s retirement or resignation from the
Company: (i)(1) if Officer is less than 55 years of age, with at least 75 points or (2) if Officer
is 55 years of age or older, with at least 65 points, and (ii) Officer has at least five (5)
consecutive years of employment with Employer. Officer shall receive one (1) point for every
consecutive year of employment with Employer and one (1) point for every year of age. Based upon
Officer’s age and employment start date of April 6, 1994, Officer would be

13

 

eligible for Retirement in 2013. This definition of Retirement is the same definition as
currently utilized in the Employer’s 2002 Stock Incentive Plan.

     6. Certain Additional Payments by Employer. Anything in this Agreement to the contrary
notwithstanding, if it shall be determined that any payment or distribution to Officer or for
Officer’s benefit (whether paid or payable or distributed or distributable) pursuant to the terms
of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any restriction on or the vesting or exercisability
of any of the foregoing (the “Payments”) would be subject to the excise tax imposed by
section 4999 of the Code by reason of being “contingent on a change in the ownership or control” of
Employer, within the meaning of Section 280G of the Code or to any similar tax imposed by state or
local law, or any interest or penalties with respect to such excise tax (such tax or taxes,
together with any such interest or penalties, are collectively referred to as the “Excise
Tax”), then Officer shall be entitled to receive from Employer an additional payment (the
“Gross-Up Payment”) in an amount such that the net amount of the Payments and the Gross-Up
Payment retained by Officer after the calculation and deduction of all Excise Taxes (including any
interest or penalties imposed with respect to such taxes) on the payment and all federal, state and
local income tax, employment tax and Excise Tax (including any interest or penalties imposed with
respect to such taxes) on the Gross-Up Payment provided for in this Section 6, and taking into
account any lost or reduced tax deductions on account of the Gross-Up Payment, shall be equal to
the Payments;

          (a) All determinations required to be made under this Section 6, including whether and when
the Gross-Up Payment is required and the amount of such Gross-Up Payment, and the assumptions to be
utilized in arriving at such determinations shall be made by the Accountants (as defined below)
which shall provide Officer and Employer with detailed supporting calculations with respect to such
Gross-Up Payment within fifteen (15) business days of the receipt of notice from Officer or
Employer that Officer has received or will receive a Payment. For purposes of making the
determinations and calculations required herein, the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Section 280G and 4999 of the Code, provided that the
Accountant’s determinations must be made on the basis of “substantial authority” (within the
meaning of Section 6662 of the Code). For the purposes of this Section 6, the “Accountants” shall
mean Employer’s independent certified public accountants serving immediately prior to the Change in
Control. In the event that the Accountants are also serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, Officer shall appoint another
nationally recognized public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accountants hereunder). All fees and expenses of
the Accountants shall be borne solely by Employer.

          (b) For the purposes of determining whether any of the Payments will be subject to the Excise
Tax and the amount of such Excise Tax, such Payments will be treated as “parachute payments” within
the meaning of section 280G of the Code, and all “parachute payments” in excess of the “base
amount” (as defined under section 280G(b)(3) of the Code) shall be treated as subject to the Excise
Tax, unless and except to the extent that in the opinion of

14

 

the Accountants such Payments (in whole or in part) either do not constitute “parachute
payments” or represent reasonable compensation for services actually rendered (within the meaning
of section 280G(b)(4) of the Code) in excess of the “base amount,” or such “parachute payments” are
otherwise not subject to such Excise Tax. For purposes of determining the amount of the Gross-Up
Payment, Officer shall be deemed to pay Federal income taxes at the highest applicable marginal
rate of Federal income taxation for the calendar year in which the Gross-Up Payment is to be made
and to pay any applicable state and local income taxes at the highest applicable marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum
reduction in Federal income taxes which could be obtained from the deduction of such state or local
taxes if paid in such year (determined without regard to limitations on deductions based upon the
amount of Officer’s adjusted gross income); and to have otherwise allowable deductions for Federal,
state and local income tax purposes at least equal to those disallowed because of the inclusion of
the Gross-Up Payment in Officer’s adjusted gross income. To the extent practicable, any Gross-Up
Payment with respect to any Payment shall be paid by Employer at the time Officer is entitled to
receive the Payments and in no event will any Gross-Up Payment be paid later than five days after
the receipt by Officer of the Accountant’s determination. Any determination by the Accountants
shall be binding upon Employer and Officer.

          (c) As a result of uncertainty in the application of section 4999 of the Code at the time of
the initial determination by the Accountants hereunder, it is possible that the Gross-Up Payment
made will have been an amount less than Employer should have paid pursuant to this Section 6 (the
“Underpayment”). In the event that Employer exhausts its remedies pursuant to Section 6(e)
and Officer is required to make a payment of any Excise Tax, the Underpayment shall be promptly
paid by Employer to or for Officer’s benefit, but no later than December 31 of the year after the
year in which Officer remits the Excise Tax.

          (d) Officer and Employer shall each provide the Accountants access to and copies of any books,
records and documents in the possession of Employer or Officer, as the case may be, reasonably
requested by the Accountants, and otherwise cooperate with the Accountants in connection with the
preparation and issuance of the determination contemplated by this Section 6.

          (e) Officer shall notify Employer in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by Employer of the Gross-Up Payment. Such
notification shall be given as soon as practicable after Officer is informed in writing of such
claim and shall apprise Employer of the nature of such claim and the date on which such claim is
requested to be paid. Officer shall not pay such claim prior to the expiration of the 30-day
period following the date on which Officer gives such notice to Employer (or such shorter period
ending on the date that any payment of taxes, interest and/or penalties with respect to such claim
is due). If Employer notifies Officer in writing prior to the expiration of such period that it
desires to contest such claim, Officer shall:

          (i) give Employer any information reasonably requested by Employer relating to such
claim;

15

 

          (ii) take such action in connection with contesting such claim as Employer shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by
Employer;

          (iii) cooperate with Employer in good faith in order to effectively contest such claim;
and

          (iv) permit Employer to participate in any proceedings relating to such claims;
provided, however, that Employer shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and
shall indemnify Officer for and hold Officer harmless from, on an after-tax basis, any Excise
Tax or income tax (including interest and penalties with respect thereto) imposed as a result
of such representation and payment of all related costs and expenses. Employer will make any
payments required under this Section 6(e)(iv) as provided above, or if not so provided,
within 30 days after delivery of Officer’s written request for payment, accompanies by such
evidence of expenses incurred as the Employer may reasonably require, but in any event
all payments will be made no later than December 31 of the year following the year
in which the expense was incurred or the tax was remitted, as the case may be. The amounts
reimbursable for any one year shall not affect the amount reimbursable in any other year, and
Officer’s right to reimbursement pursuant to the Section 6(e)(iv) shall not be subject to
liquidation or exchange for another benefit. Without limiting the foregoing provisions of
this Section 6, Employer shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Officer to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and Officer agree to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as Employer shall determine; provided, however, that if
Employer directs Officer to pay such claim and sue for a refund, Employer shall advance the
amount of such payment to Officer, on an interest-free basis, and shall indemnify Officer for
and hold Officer harmless from, on an after-tax basis, any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance (including as a result of
any forgiveness by Employer of such advance); provided, further that any extension of the
statute of limitations relating to the payment of taxes for the taxable year of Officer with
respect to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, Employer’s control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and Officer shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

          (f) Nothing in this Section 6 is intended to violate the Sarbanes-Oxley Act of 2002 and to the
extent that any advance or repayment obligation hereunder would so, such obligation shall be
modified so as to make the advance a nonrefundable payment to Officer and the repayment obligation
null and void to the extent required by such Act.

16

 

          These rights shall be deemed fully vested rights, not subject to suspension or forfeiture and
shall survive any termination of employment; provided, however, that all payments made pursuant to
this Section 6 shall be subject to Section 9(q) below.

     7. Reimbursement of Business Expenses. During the term of this Agreement, Employer shall
reimburse Officer promptly for all reasonable and appropriate business expenditures to the extent
that such expenditures are substantiated by Officer as required by the Internal Revenue Service and
rules and policies of Employer. Employer will make any payments required under this Section 7
within 30 days after delivery of Officer’s written requests for payment, accompanied by such
evidence of expenses incurred as the Employer may reasonably require, but in no event later than
December 31 of the year following the year in which the expense was incurred. The amount
reimbursable for any one year shall not affect the amount reimbursable in any other year, and
Officer’s right to reimbursement pursuant to this Section 7 shall not be subject to liquidation or
exchange for another benefit.

     8. Indemnity. To the fullest extent permitted by applicable law, the Certificate of
Incorporation and the By-Laws of Employer (as from time to time in effect) and any indemnity
agreements entered into from time to time between Employer and Officer, Employer shall indemnify
Officer and hold him harmless for actions or inactions as an Officer or Director of Employer or any
Affiliate or as a fiduciary of any employee benefit plan of any of the foregoing and shall maintain
coverage for him under liability insurance policies of a minimum amount of $80 million, or such
higher amount as provided for any other officers or directors of Employer. This provision shall in
all events survive any termination of this Agreement.

     9. Miscellaneous.

          (a) Successorship. This Agreement shall inure to the benefit of and shall be binding upon
Employer, its successors and assigns, but without the prior written consent of Officer, this
Agreement may not be assigned other than in connection with a merger or sale of all or
substantially all the assets of Employer or similar transaction to or with a company with a larger
net worth, higher credit rating and greater profit than Employer. The failure of any successor to
or assignee of Employer’s business and/or assets in such transaction to expressly assume all
obligations of Employer hereunder in a writing promptly delivered to Officer shall be deemed a
material breach of this Agreement by Employer.

          (b) Notices. Any notices provided for in this Agreement shall be sent to Employer at its
corporate headquarters, Attention: Corporate Counsel/Secretary, with a copy to the Chairman of the
Compensation Committee at the same address, or to such other address as Employer may from time to
time in writing designate, and to Officer at such address as he may from time to time in writing
designate (or his business address of record in the absence of such designation). All notices
shall be deemed to have been given two (2) business days after they have been deposited as
certified mail, return receipt requested, postage paid and properly addressed to the designated
address of the party to receive the notices. Notices may be delivered personally or by overnight
service.

          (c) Entire Agreement. This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and it replaces and supersedes any prior agreements

17

 

between the parties relating to said subject matter (except to the extent specifically
provided herein); provided, however, that the parties hereby expressly acknowledge that the parties
have executed IndyMac Bank’s standard Mutual Agreement to Arbitrate Claims which is not replaced or
superseded by this Agreement; provided, further that this Agreement does not supersede any
outstanding equity grants or awards or existing rights under any plan or program except as
specifically provided herein. No modifications or amendments of this Agreement shall be valid
unless made in writing and signed by the parties hereto.

          (d) Waiver. The waiver of the breach of any term or of any condition of this Agreement shall
not be deemed to constitute the waiver of any other breach of the same or any other term or
condition.

          (e) California Law. This Agreement shall be construed and interpreted in accordance with the
laws of California without reference to principles of conflict of laws.

          (f) Arbitration. Any disagreement, dispute, controversy or claim arising out of or relating
to this Agreement or the interpretation of this Agreement or arrangements relating to this
Agreement or contemplated in this Agreement shall be settled by arbitration in accordance with the
terms of IndyMac Bank’s Mutual Agreement to Arbitrate Claims, as executed by Officer and IndyMac
Bank on the date hereof.

          (g) Confidentiality. Officer agrees that he will not divulge or otherwise disclose, directly
or indirectly, any trade secret or other confidential information concerning the business or
policies of Employer or any of its Affiliates which he may have learned as a result of his
employment during the term of this Agreement or prior thereto as an employee, officer or director
of or consultant to Employer or any of its Affiliates, except to the extent such use or disclosure
is: (i) decided in good faith by Officer to be necessary or desirable to the performance of
Officer’s duties, (ii) required by applicable law or in response to an inquiry from a governmental
or regulatory authority, (iii) lawfully obtainable from other sources, or (iv) authorized by
Employer. The provisions of this subsection shall survive the expiration, suspension or
termination, for any reason, of this Agreement.

          (h) No Solicitation. Officer agrees that during employment and for a period of one (1) year
following an early termination of this Agreement, pursuant to the terms described in Section 5(a),
5(c), (d), (e), (f), (g), (i) or (j) hereof, Officer shall not: (i) solicit, or cause to be
solicited, any customers of Employer or its subsidiaries if it is for the purposes of promoting or
selling any products or services competitive with those of Employer, (ii) solicit business from, or
perform services for, any company or other business entity which at any time during the two (2)
year period immediately preceding Officer’s termination of employment with Employer was a customer
of Employer or its subsidiaries, or (iii) solicit for employment, offer, or cause to be offered,
employment, either on a full time, part time, or consulting basis, to any person who was employed
by Employer or its Affiliates on the date Officer’s employment terminated, unless Officer shall
have received the prior written consent of Employer, such person has ceased for six (6) months to
be employed by Employer or its Affiliates or Officer was not involved, directly or indirectly, in
the termination of such person’s employment with Employer or its Affiliates. The foregoing clauses
(i) through (iii) shall be violated only by the personal solicitation or personally directed and
targeted solicitation by Officer and not by (A) general marketing or solicitation, (B)

18

 

solicitation by other employees of entities employing Officer of companies, other business
entities or individuals who are not specifically identified by Officer, or (C) the providing of
services by Officer’s new employer to companies or other business entities not so solicited by
Officer.

          (i) Cooperation. Upon the receipt of reasonable notice from Employer (including outside
counsel), Officer agrees that while employed by Employer and thereafter, Officer will reasonably
provide information and reasonable assistance to Employer, its Affiliates and their respective
representatives in defense of any claims that may be made against Employer or its Affiliates, to
the extent that such claims may relate to the period of Officer’s employment with Employer (or any
predecessor), provided that Officer shall need not cooperate to the extent his counsel, in good
faith, advises that Officer’s interests may differ from those of Employer. Furthermore, Employer
shall reimburse all reasonable expenses incurred by Officer, including, but not limited to, those
for separate counsel.

          (j) Consideration; Remedies Of Employer. The consideration for Officer’s covenants set forth
in Sections 9(g), (h) and (i), the sufficiency of which is hereby acknowledged, is Employer’s
agreement to continue to employ Officer and provide compensation and benefits pursuant to this
Agreement, including but not limited to Section 5(d). Officer acknowledges and agrees that
Employer’s remedies at law for a breach or threatened breach of any of the provisions of this
Section would be inadequate and, in recognition of this fact, Officer agrees that, in the event of
such a breach or threatened breach, in addition to any remedies at law, Employer, without posting
any bond, shall be entitled to seek equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other equitable remedy
which may then be available.

          (k) Reformation. The provisions of Sections 9(g), (h) and (i) are intended to restrict
Officer only to the extent permitted by law in the jurisdiction where Officer is then a resident.
To the extent any of such provisions would otherwise be determined invalid or unenforceable by a
Court of competent jurisdiction, such Court shall exercise its discretion in reforming the
provisions of this Section to the end that Officer shall be subject to reasonable provisions that
are enforceable by Employer under the laws of the jurisdiction where Officer is then a resident.
If the laws of the state where the Officer is then a resident completely prohibit any form of the
foregoing covenants, then Employer and Officer understand and agree that the foregoing covenants
are of no effect.

          (l) Moral Obligation. The parties recognize that a non-competition provision would be
desirable and equitable in this Agreement, but that one cannot be included because of applicable
law. The parties further recognize that, notwithstanding the foregoing and legal unenforceability
of such a provision, Officer should and does have a moral and ethical obligation to Employer, its
shareholders and its employees not to compete with Employer within one (1) year after any
resignation from his position.

          (m) Severability. If any provision of this Agreement is held invalid or unenforceable, the
remainder of this Agreement shall nevertheless remain in full force and effect, and if any
provision is held invalid or unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstance.

19

 

          (n) No Obligation to Mitigate. Officer shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise and no payment
hereunder shall be offset or reduced by the amount of any compensation or benefits provided to
Officer in any subsequent employment except as expressly otherwise provided by Section 5.
Employer’s obligation to make any payment provided for in this Agreement shall not be subject to
set-off, counterclaim or recoupment.

          (o) Adjustment of Options. The number of shares of common stock subject to the stock options
granted to Officer pursuant to the Prior Agreement shall be equitably adjusted by the Committee
pursuant to Section 6 of the Plan in the event of the occurrence of any of the events described
therein.

          (p) Legal Fees. Employer shall promptly (and in any event prior to March 15, 2008) pay
Officer’s reasonable legal fees and costs associated with entering into this Agreement, and to the
extent such payment is taxed to Officer, Employer shall provide Officer a full tax gross-up for any
imputed income to Officer resulting from such payment. Any such gross-up payment shall be paid to
Officer no later than December 31 of the year after the year Officer remits the applicable tax.

          (q) Code Section 409A. Notwithstanding anything in this Agreement to the contrary, if any
amount or benefit specified herein as “subject to Section 9(q)” would be payable or distributable
under this Agreement by reason of Officer’s separation from service at a time at which he is a
Specified Employee (as defined below), then, subject to any permissible acceleration of payment by
Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii)
(conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

               (i) if the payment or distribution is payable in a lump sum, Officer’s right to receive
payment or distribution of such non-exempt deferred compensation will be delayed until the earlier
of Officer’s death or the first day of the seventh month following Officer separation from service;
and

               (ii) if the payment or distribution is payable over time, the amount of such non-exempt
deferred compensation that would otherwise be payable during the six-month period immediately
following Officer’s separation from service will be accumulated and Officer’s right to receive
payment or distribution of such accumulated amount will be delayed until the earlier of Officer’s
death or the first day of the seventh month following Officer’s separation from service, whereupon
the accumulated amount will be paid or distributed to Officer and the normal payment or
distribution schedule for any remaining payments or distributions will resume.

     For purposes of this Agreement, the term “Specified Employee” has the meaning given such term
in Code Section 409A and the final regulations thereunder (“Final 409A Regulations”), in accordance
with rules adopted by the Board of Directors or a committee thereof, which shall be applied
consistently with respect to all nonqualified deferred compensation arrangements of Employer,
including this Agreement, as to the determination of Specified Employees.

20

 

     If any provision of this Agreement (or of any award of compensation, including equity
compensation or benefits) would cause Officer to incur any additional tax or interest under Code
Section 409A or the Final 409A Regulations, Employer shall, after consulting with Officer, amend
such provision to comply with Code Section 409A, provided that Employer agrees to maintain, to
the maximum extent practicable, the original intent and economic benefit Officer of the applicable
provision without violating the provisions of Code Section 409A. Employer shall indemnify and hold
Officer harmless, on an after-tax basis, for any additional tax (including interest and penalties
with respect thereto) that may be imposed on Officer by Code Section 409A. Any such
gross-up payment shall be paid to Officer no later than December 31 of the year after the year
Officer remits the applicable tax.

     10. Regulatory Authority. Notwithstanding anything in this Agreement to the contrary, this
Agreement is subject to the following terms and conditions:

          (a) If Officer is suspended and/or temporarily prohibited from participating in the conduct of
Employer’s affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), Employer’s obligations hereunder shall be
suspended as of the date of service unless stayed by appropriate proceedings. If the charges in
the notice are dismissed, Employer shall (i) pay Officer all or part of the compensation withheld
while Employer’s contract obligations were suspended, and (ii) reinstate any of Employer’s
obligations which were suspended.

          (b) If Officer is removed and/or permanently prohibited from participating in the conduct of
Employer’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818 (e)(4) and (g)(1)), all obligations of Employer under this Agreement
shall terminate as of the effective date of the order, but Officer’s vested rights shall not be
affected.

          (c) If Employer is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance
Act (12 U.S.C. 1813 (x)(1)), all obligations under this Agreement shall terminate as of the date of
default, but Officer’s vested rights shall not be affected.

          (d) All obligations under this Agreement shall be terminated, except to the extent determined
that continuation of the contract is necessary for the continued operation of Employer, (i) by the
Office of Thrift Supervision (“OTS”) at the time the Federal Deposit Insurance Corporation (“FDIC”)
enters into an agreement to provide assistance to or on behalf of Employer under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1823 (c)); or (ii) by
the OTS at the time the OTS approves a supervisory merger to resolve problems related to operation
of Employer or when Employer is determined by the OTS to be in an unsafe or unsound condition. Any
rights of Officer that shall have vested under this Agreement shall not be affected by such action.

          (e) With regard to the provisions of this Section 10:

               (i) Employer agrees to use its best efforts to oppose any such notice of charges as to which
there are reasonable defenses;

21

 

               (ii) In the event the notice of charges is dismissed or otherwise resolved in a manner that
will permit Employer to resume its obligations to pay compensation hereunder, Employer will
promptly make such payment hereunder; and

               (iii) During the period of suspension, the vested rights of the contracting parties shall not
be affected except to the extent precluded by such notice.

          (f) Any payments made to Officer pursuant to this Agreement or otherwise are subject to and
conditioned upon their not being in violation of 12 U.S.C. Section 1828(k) and FDIC regulation 12
C.F.R. Part 359, Golden Parachutes and Indemnification Payments, as applicable.

     11. Sarbanes-Oxley. Officer acknowledges he has been informed that pursuant to Section 304 of
the Sarbanes-Oxley Act of 2002, Officer may be subject in certain circumstances to an obligation to
pay back to Employer:

          (a) Any bonus or other incentive-based or equity-based compensation received by Officer from
Employer during the twelve (12)-month period following the first public issuance or filing with the
Securities and Exchange Commission (whichever first occurs) of the financial document embodying
such financial reporting requirement; and

          (b) Any profits realized from the sale of securities of Employer during such twelve (12)-month
period.

[Remainder of Page Left Blank]

22

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written.

	 	 	 	 	 
	 	EMPLOYER

 	 
	 	By:  	/s/ Michael Perry
 	 
	 	 	Michael Perry	 
	 	 	Chairman and Chief Executive Officer

IndyMac Bank, F.S.B. 	 
	 
	 	OFFICER

 	 
	 	By:  	/s/
Richard H. Wohl
 	 
	 	 	Richard H. Wohl 	 
	 	 	 	 
	 

23

 

APPENDIX A

          A “Change in Control” shall mean the occurrence during the term of the Agreement, of any one
of the following events:

               A. An acquisition of any common stock or other “Voting Securities” (as hereinafter defined) of
IndyMac Bancorp, Inc. (“Company”) by any “Person” (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), immediately after which such Person has “Beneficial Ownership” (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of the then
outstanding shares of Company’s common stock or the combined voting power of Company’s then
outstanding Voting Securities; provided, however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a “Non-Control Acquisition” (as hereinafter
defined) shall not constitute an acquisition which would cause a Change in Control. For purposes
of this Agreement, (1) “Voting Securities” shall mean Company’s outstanding voting securities
entitled to vote generally in the election of directors and (2) a “Non-Control Acquisition” shall
mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained
by (A) Company or (B) any corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or indirectly, by Employer (for
purposes of this definition; a “Subsidiary”), (ii) Company or any of its Subsidiaries, or
(iii) any Person in connection with a “Non-Control Transaction” (as hereinafter defined).

               B. The individuals who, as of the date of the Agreement are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least a majority of the members
of the Board; provided, however, that if the election, or nomination for election by Employer’s
common stockholders, of any new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this Agreement, be considered as a member
of the Incumbent Board; provided, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a “Proxy Contest”) including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or

               C. The consummation of:

               (i) A merger, consolidation, or reorganization involving Company, unless such merger,
consolidation, or reorganization is a “Non-Control Transaction.” A “Non Control
Transaction” shall mean a merger, consolidation or reorganization of Company where:

                    (a) the stockholders of Company, immediately before such merger, consolidation
or reorganization, own directly or indirectly immediately following such merger,
consolidation or reorganization more than fifty percent (50%) of the combined voting
power of the outstanding Voting Securities of the corporation resulting from such
merger, consolidation or

A-1

 

reorganization (the “Surviving Corporation”) in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization; provided, however, that if the stockholders
of Parent, immediately before such merger, consolidation or reorganization, own
directly or indirectly immediately following such merger, consolidation or
reorganization forty-five percent to fifty percent (45% to 50%) of the combined
voting power of the outstanding Voting Securities of the Surviving Corporation in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, then a Change in
Control shall be deemed to have occurred unless the members of the Incumbent Board
who are not employees of Parent determine otherwise; and

               (b) no Person other than (i) Company, (ii) any Subsidiary, (iii) any employee
benefit plan (or any trust forming a part thereat) maintained by Company, the
Surviving Corporation or any Subsidiary, or (iv) any Person who, immediately prior
to such merger, consolidation or reorganization had Beneficial Ownership of
twenty-five percent (25%) or more of the then outstanding Voting Securities or
common stock of Company, has Beneficial Ownership of twenty-five percent (25%) or
more of the combined voting power of the Surviving Corporation’s then outstanding
Voting Securities or its common stock;

          (ii) Company’s stockholders approve a complete liquidation or dissolution of Company;

          (iii) The sale or other disposition of all or substantially all of the assets of
Company to any Person or Persons (other than a transfer to a Subsidiary); or

          (iv) The sale or other disposition of all or substantially all of the stock or assets
of IndyMac Bank, F.S.B. to any Person or Persons (other than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any
Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted
amount of the then outstanding common stock or Voting Securities as a result of the acquisition of
common stock or Voting Securities by Company which, by reducing the number of shares of common
stock or Voting Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person; provided, however, that if a Change of Control would
occur (but for the operation of this sentence) as a result of the acquisition of common stock or
Voting Securities by Company, and after such share acquisition by Company, the Subject Person
becomes the Beneficial Owner of any additional common stock or Voting Securities which increases
the percentage of the then outstanding common stock or Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.

A-2exv4w1

 

EXHIBIT 4.1

LIONS GATE ENTERTAINMENT CORP.

NONQUALIFIED STOCK OPTION AGREEMENT

     THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”) dated as of [                    ]
by and between LIONS GATE ENTERTAINMENT CORP., a company recognized under the laws of the Province
of British Columbia (the “Corporation”), and [                    ] (the “Grantee”), evidences the
nonqualified stock option (the “Option") granted by the Corporation to the Grantee as to the number
of the Corporation’s common shares (“Common Shares”) first set forth below.

	 	 	 	 	 
	Number of Common Shares:1

	 	[                    ]
	 	Award Date: [                    ]
	Exercise Price per Share:1

	 	$[                    ]
	 	Expiration Date:1,2 [                    ]

Vesting 1,2  The Option shall become vested as to one-fifth of the
total number of Common
Shares subject to the Option on each of the first five (5) anniversaries of the Award Date.

     The Option is subject to the Terms and Conditions of Nonqualified Stock Option (the “Terms”)
attached to this Option Agreement (incorporated herein by this reference). The Option has been
granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise
payable or to be paid to the Grantee. The parties agree to the terms of the Option set forth
herein, and the Grantee acknowledges receipt of a copy of the Terms.

     Reference is made to that certain Employment Agreement (the “Employment Agreement”) dated as
of [                    ] between the Corporation and the Grantee. The Option is the option referenced in
and required to be granted pursuant to Section [                    ] of the Employment Agreement.

	 	 	 
	“GRANTEE”

	 
	 
	 	 
	 

Signature

	 
	 
	 	 
	 

Print Name

LIONS GATE ENTERTAINMENT CORP.

a company continued under the laws of

the Province of British Columbia

	 	 	 
	By:
	 	 
	 

	 	 
	 
	 	 
	Print Name:
	 	 
	 

	 	 
	 
	 	 
	Title:
	 	 
	 

	 	 

CONSENT OF SPOUSE

     In consideration of the Corporation’s execution of this Option Agreement, the undersigned
spouse of the Grantee agrees to be bound by all of the terms and provisions hereof.

	 	 	 
	 
	 

	 	 
	Signature of Spouse

	 	Date

 

			
	1	 	Subject to adjustment under Section 4.1
of the Terms.
	 
	2	 	Subject to early termination under
Section 4 of the Terms.

1

 

TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION

	1.	 	Vesting; Limits on Exercise; Incentive Stock Option Status; Possible Acceleration.

     The Option shall vest and become exercisable in percentage installments of the aggregate
number of shares subject to the Option as set forth on the cover page of this Option Agreement.
The Option may be exercised only to the extent the Option is vested and exercisable.

	 	•	 	Cumulative Exercisability. To the extent that the Option is vested and
exercisable, the Grantee has the right to exercise the Option (to the extent not
previously exercised), and such right shall continue, until the expiration or earlier
termination of the Option.
	 
	 	•	 	No Fractional Shares. Fractional share interests shall be disregarded, but
may be cumulated.
	 
	 	•	 	Minimum Exercise. No fewer than 100 Common Shares (subject to adjustment
under Section 4.1 below) may be purchased at any one time, unless the number purchased
is the total number at the time exercisable under the Option.
	 
	 	•	 	Nonqualified Stock Option. The Option is a nonqualified stock option and is
not, and shall not be, an incentive stock option within the meaning of Section 422 of
the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

     Notwithstanding any other provision herein, the Option is subject to accelerated vesting as
follows:

(i) In the event of a termination of the Grantee’s employment due to the Grantee’s death,
the Option, to the extent outstanding and unvested, shall automatically become fully vested;
and

(ii) In the event of a termination of the Grantee’s employment either by the Corporation
“without cause” or by the Grantee for “good reason” (as each such term is defined in the
Employment Agreement), (x) the next installment of the Option scheduled to vest after the
date of such termination (the “Next Installment”), to the extent outstanding and unvested as
of such date, shall become fully vested as of such date; and (y) the installment of the
Option scheduled to vest next following the Next Installment, to the extent outstanding and
unvested as of the date of such termination, shall become vested with respect to fifty
percent (50%) of the Common Shares covered by such installment. Any portion of the Option
that is not vested after giving effect to the foregoing provisions shall terminate as of the
date of termination of the Grantee’s employment.

     The Option is also subject to accelerated vesting in connection with a Change of Control as
provided in Section 4.3 below.

2

 

	2.	 	Continuance of Employment/Service Required; No Employment/Service Commitment.

     Except as set forth herein, the vesting schedule requires continued employment or service
through each applicable vesting date as a condition to the vesting of the applicable installment of
the Option and the rights and benefits under this Option Agreement. Except as set forth herein,
employment or service for only a portion of the vesting period, even if a substantial portion, will
not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights
and benefits upon or following a termination of employment or services, as provided in Section 4.2
below.

     Nothing contained in this Option Agreement constitutes a continued employment or service
commitment by the Corporation or any of its Subsidiaries, confers upon the Grantee any right to
remain employed by or in service to the Corporation or any Subsidiary, interferes in any way with
the right of the Corporation or any Subsidiary at any time to terminate such employment or service,
or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s
other compensation, subject in each case to the Employment Agreement. Nothing in this paragraph,
however, is intended to adversely affect any independent contractual right of the Grantee without
his consent thereto. As used herein, “Subsidiary” means any corporation or other entity a majority
of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by
the Corporation.

	3.	 	Exercise of Option.

     3.1 Method of Exercise. The Option shall be exercisable by the delivery to the Secretary of
the Corporation (or such other person as the Administrator may require pursuant to such
administrative exercise procedures as the Administrator may implement from time to time, so long as
the Administrator provides written notice to the Grantee of such change in exercise procedures) of:

(i) a written notice stating the number of Common Shares to be purchased pursuant to the
Option (or by the completion of such other administrative exercise procedures as the
Administrator may require from time to time, so long as the Administrator provides written
notice to the Grantee of such change in exercise procedures),

(ii) payment in full for the Exercise Price of the shares to be purchased in cash, check or
by electronic funds transfer to the Corporation, or subject to compliance with all
applicable laws, rules, regulations and listing requirements and further subject to such
rules as the Corporation may adopt as to such payment, either (A) in Common Shares already
owned by the Grantee, valued at their fair market value on the exercise date (with the “fair
market value” of such shares determined in accordance with the definition of such term under
the Corporation’s 2004 Performance Incentive Plan), or (B) pursuant to a “cashless exercise”
with a third party who provides financing for the purposes of (or who otherwise facilitates)
the exercise of the Option;

(iii) any written statements or agreements required pursuant to Section 7; and

(iv) satisfaction of the tax withholding provisions of Section 3.2.

3

 

The Administrator also may, but is not required to, authorize a non-cash payment alternative by
notice and third party payment in such manner as may be authorized by the Administrator.

     For purposes of this Option Agreement, “Administrator” means the Board of Directors of the
Corporation (the “Board”) or any committee appointed by the Board or another committee (within its
delegated authority) to administer all or certain aspects of the Option on behalf of the
Corporation.

     3.2 Tax Withholding. Upon any exercise or payment of the Option, the Corporation (or a
Subsidiary employing the Grantee) shall have the right at its option to:

(i) require the Grantee (or his personal representative or beneficiary, in the case of the
Grantee’s disability or death, as the case may be) to pay or provide for payment of the
amount of any taxes which the Corporation (or Subsidiary) may be required to withhold with
respect to such Option event;

(ii) deduct from any amount payable to the Grantee (or his personal representative or
beneficiary, as the case may be) in cash or equivalent (in respect of the Option or
otherwise) the amount of any taxes which the Corporation (or Subsidiary) may be required to
withhold with respect to such Option event; or

(iii) reduce the number of Common Shares to be delivered by (or otherwise reacquire) the
appropriate number of Common Shares, valued at their then fair market value (as defined
above), to satisfy such withholding obligation, provided that in no event shall the value of
any shares withheld exceed the minimum amount of required withholding under applicable law.

	4.	 	Adjustments; Early Termination of Option.

     4.1 Adjustments. Subject to Section 4.3, upon (or, as may be necessary to effect the
adjustment, immediately prior to): any reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar extraordinary dividend
distribution in respect of the Common Shares; or any exchange of Common Shares or other securities
of the Corporation, or any similar, unusual or extraordinary corporate transaction in respect of
the Common Shares; then the Administrator shall equitably and proportionately adjust (1) the
number, amount and type of Common Shares (or other securities or property) subject to the Option,
(2) the Exercise Price of the Option, and/or (3) the securities, cash or other property deliverable
upon exercise or payment of the Option, in each case to the extent necessary to preserve (but not
increase or decrease) the level of incentives intended by this Option Agreement. It is intended
that, if possible, any adjustments contemplated by this Section 4.1 be made in a manner that
satisfies applicable U.S. legal, tax (including, without limitation and as applicable in the
circumstances, Section 424 of the Code, Section 409A of the Code and Section 162(m) of the Code)
and accounting (so as to not trigger any charge to earnings with respect to such adjustment)
requirements. Any good faith determination by the Administrator as to whether an adjustment is
required in the circumstances pursuant to this Section 4.1, and the extent and nature of any such
adjustment, shall be conclusive and binding on all persons.

     4.2 Termination of Option upon a Termination of Grantee’s Employment or Services. Subject to
earlier termination on the Expiration Date of the Option or pursuant to Section 4.3, if the Grantee
ceases to be employed by the Corporation or a Subsidiary, the

4

 

following rules shall apply (the last day that the Grantee is employed by the Corporation or a
Subsidiary is referred to as the Grantee’s “Severance Date”):

(i) other than as expressly provided below in this Section 4.2, (a) the Grantee (or the
Grantee’s beneficiary or personal representative in the event of the Grantee’s death) will
have until the date that is six (6) months after his or her Severance Date to exercise the
Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the
Option, to the extent not vested on the Severance Date, shall terminate on the Severance
Date, and (c) the Option, to the extent exercisable for the 6-month period following the
Severance Date and not exercised during such period, shall terminate at the close of
business on the last day of the 6-month period; and

(ii) if the Grantee’s employment is terminated by the Corporation or a Subsidiary for
“cause” (as such term is defined in the Employment Agreement), the Option (whether vested or
not) shall terminate on the Severance Date.

     In all events the Option is subject to earlier termination on the Expiration Date of the
Option or as contemplated by Section 4.3. The Corporation shall be the sole judge of whether the
Grantee continues to render employment or services for purposes of this Option Agreement.

     For purposes of the Option, unless the express policy of the Corporation or one of its
Subsidiaries, or the Administrator, otherwise provides, the Grantee’s employment relationship shall
not be considered terminated in the case of (a) sick leave, (b) military leave, or (c) any other
leave of absence authorized by the Corporation or one of its Subsidiaries, or the Administrator;
provided that unless reemployment upon the expiration of such leave is guaranteed by contract or
law, such leave is for a period of not more than 90 days. If the Grantee is on an approved leave
of absence, continued vesting of the Award during the period of such leave may be suspended until
the Grantee returns to service, unless the Administrator otherwise provides or applicable law
otherwise requires.

     4.3 Change of Control.

          (A) Upon (i) the occurrence of a Change of Control (as such term is defined in the Employment
Agreement) at any time on or after the first anniversary of the commencement of the Term (as such
term is defined in the Employment Agreement), or (ii) a dissolution of the Corporation or other
event described in Section 4.1 that the Corporation does not survive (or does not survive as a
public corporation in respect of its Common Shares), the Option, to the extent outstanding and
unvested, shall automatically become fully vested. Any acceleration of the Option pursuant to this
Section 4.3 shall comply with applicable legal requirements and, if necessary to accomplish the
purposes of the acceleration or if the circumstances require, may be deemed by the Administrator to
occur a limited period of time not greater than thirty (30) days before the event. Without
limiting the generality of the foregoing, the Administrator may deem such acceleration to occur
immediately prior to the applicable event and/or reinstate the original terms of the Option if an
event giving rise to an acceleration does not occur.

          (B) If the vesting of the Option is accelerated pursuant to Section 4.3(A), the Option shall
terminate upon the related Change of Control or other event referred to in Section 4.3(A), subject
to any provision that has been expressly made by the Administrator, through a plan of
reorganization or otherwise, for the survival, substitution, assumption, exchange or other

5

 

continuation or settlement of the Option and provided that, if the Option will not survive, be
substituted for, assumed, exchanged, or otherwise continued or settled in the transaction, either
(i) the Grantee shall be given reasonable advance notice of the impending termination and a
reasonable opportunity to exercise the Option in accordance with the terms hereof before the
termination of the Option (except that in no case shall Grantee be given less than fifteen days’
written notice of accelerated vesting and the impending termination and any acceleration may be
made contingent upon the actual occurrence of the event), or (ii) the Administrator may make
provision for a cash payment in settlement of the Option based upon, to the extent relevant under
the circumstances, the distribution or consideration payable to holders of the Common Shares upon
or in respect of such event. The Administrator may base such settlement solely upon the excess if
any of the per share amount payable upon or in respect of such event over the Exercise Price of the
Option.

	5.	 	Non-Transferability.

     The Option and any other rights of the Grantee under this Option Agreement (but not with
respect to the Common Shares issued upon exercise of the Option) are nontransferable and
exercisable only by the Grantee, except that such transfer and exercise restrictions shall not
apply to:

(i) transfers to the Corporation;

(ii) the designation of a beneficiary to receive benefits in the event of the Grantee’s
death or, if the Grantee has died, transfers to or exercise by the Grantee’s beneficiary,
or, in the absence of a validly designated beneficiary, transfers by will or the laws of
descent and distribution;

(iii) transfers to a family member (or former family member) of the Grantee pursuant to a
domestic relations order if approved or ratified by the Administrator;

(iv) if the Grantee has suffered a disability, permitted transfers or exercises on behalf of
the Grantee by his legal representative;

(v) transfers to a trust or other entity formed primarily for estate or family planning
purposes (such as a family limited partnership) that is for the benefit of the Grantee, the
Grantee’s spouse, one or more descendants of the Grantee, or any combination of the
foregoing, to the extent the transfer will not adversely affect the Corporation’s ability to
rely on a Form S-8 Registration Statement with respect to the offer, sale and issuance of
securities in respect of the Option and is otherwise in compliance with all applicable laws;
or

(vi) the authorization by the Administrator of “cashless exercise” procedures with third
parties who provide financing for the purpose of (or who otherwise facilitate) the exercise
of the Option consistent with applicable laws and the express authorization of the
Administrator.

     The Administrator may permit the Option to be exercised by and paid to, or otherwise
transferred to, other persons or entities pursuant to such conditions and procedures, including
limitations on subsequent transfers, as the Administrator may, in its sole discretion, establish in

6

 

writing. Any permitted transfer shall be subject to compliance with applicable federal and
state securities laws.

	6.	 	Securities Law Representation.

     The Grantee acknowledges that the Option and the Common Shares covered thereby have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”), based, in
part, in reliance upon an exemption from registration under the Securities Act, and a comparable
exemption from qualification under applicable state securities laws, as each may be amended from
time to time. The Grantee, by executing this Option Agreement, hereby represents to the
Corporation that the Grantee either (1) has an individual net worth, or joint net worth with his
spouse, of more than $1,000,000; (2) has had individual net income in excess of $200,000 in each of
the two most recent years (or joint net income with his spouse in excess of $300,000 in each of
those years) and reasonably expects to reach that same income level in the current year; or (3) is
an “Executive Officer” of the Corporation as defined in Rule 501(f) of the Securities Act. The
Grantee acknowledges that the Corporation’s reliance on federal and state securities law exemptions
from registration and qualification is predicated, in substantial part, upon the accuracy of this
representation.

	7.	 	Compliance with Laws.

     This Option Agreement, the granting and vesting of the Option under this Option Agreement, the
offer, issuance and delivery of Common Shares, and/or the payment of money in respect of the Option
are subject to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law, federal margin requirements) and to
such approvals by any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Corporation, be necessary or advisable in connection therewith. The person
acquiring any securities under this Option Agreement will, if reasonably requested by the
Corporation or one of its Subsidiaries, provide such assurances and representations to the
Corporation or one of its Subsidiaries as the Administrator may deem reasonably necessary or
desirable to assure compliance with all applicable legal requirements.

	8.	 	Notices.

     Any notice to be given under the terms of this Option Agreement shall be deemed to have been
well and sufficiently given if mailed by prepaid registered mail, telexed, telecopied, telegraphed,
or delivered, if to the Corporation, at its principal office to the attention of the Secretary, and
if to the Grantee, at the Grantee’s last address on the payroll records of the Corporation, or at
such other address as each party may from time to time direct in writing. Any such notice shall be
deemed to have been received, if mailed, telexed, telecopied, or telegraphed, forty-eight hours
after the time of mailing, telexing, telecopying, or telegraphing, and if delivered, upon delivery.
If normal mail service is interrupted by a labor dispute, slowdown, strike, force majeure, or
other cause, a notice sent by mail shall not be deemed to be received until actually received, and
the party giving such notice shall use such other services as may be available to ensure prompt
delivery or shall deliver such notice.

	9.	 	Entire Agreement.

     This Option Agreement (including these Terms) and the Employment Agreement together constitute
the entire agreement and supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. This Option

7

 

Agreement may be amended only be a written instrument signed by both the Grantee and the
Corporation. Such amendment must be in writing and signed by the Corporation. The Corporation
may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any other provision
hereof.

	10.	 	Governing Law.

     This Option Agreement shall be governed by, and construed in accordance with the laws of
California, except to the extent that the laws of British Columbia are applicable as the
jurisdiction of incorporation of the Corporation.

	11.	 	Effect of this Agreement.

     Subject to the Corporation’s right to terminate the Option pursuant to Section 4.3 above, this
Option Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or
successors to the Corporation.

	12.	 	Language.

     The parties hereto have requested that this Option Agreement and the certificates, documents
or notices relating thereto be drafted in the English language. Les parties a cet accord ont exige
que cet accord et tous certifcats, documents ou avis y afferent soit redige en langue anglaise.

	13.	 	Counterparts.

     This Option Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.

	14.	 	Section Headings.

     The section headings of this Option Agreement are for convenience of reference only and shall
not be deemed to alter or affect any provision hereof.

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