Document:

exv10w17

 

Exhibit 10.17

Director Compensation & Stock Ownership Policy

Indymac Bancorp & Bank Board Annual Retainer

Each Non-Employee Director who serves on the Bancorp Board of Directors and/or
the Board of Directors of its wholly owned subsidiary, Indymac Bank F.S.B. (the
“Bank”), shall receive an annual retainer of $75,000 for service on either or
both the Bancorp Board or the Bank Board. Such annual retainer shall be
prorated for Non-Employee Directors who join either Board of Directors during a
calendar year. Each Non-Employee Director who serves on the Audit Committee of
Bancorp and/or the Bank shall receive an additional annual retainer of $20,000,
for a total annual retainer of $95,000. Each Director serving as Presiding
Director shall receive an additional retainer of $20,000 prorated during his or
her term.

If a Non-Employee Director serves solely on the Bank Board, this retainer, all
other Director fees and compensation, and any reimbursement of Director
expenses for that Director shall be the responsibility of and shall be paid by
the Bank (provided that stock options and restricted stock shall be issued by
Bancorp). If a Non-Employee Director serves solely on the Bancorp Board or
serves on both the Bank Board and the Bancorp Board, this retainer, all other
Director fees and compensation, and any reimbursement of Director expenses for
that Director shall be the responsibility of and shall be paid by Bancorp.

Indymac Bancorp & Bank Board Committee Fees

No meeting fees will be paid for attendance at meetings of the Bancorp Board and/or Bank Board.
However, each Non-Employee Director who serves on a Bancorp Board committee or a Bank Board
committee shall receive fees for attendance at committee meetings as follows:

	 	 	 
	Committee Chairperson:

	 	•   $2,500 for each meeting chaired in a calendar year

	 
	 	 
	Committee Members:

	 	•   No separate fee for the first 4 committee
meetings attended in a calendar year

	 

	 	•   $2,500 for each committee meeting attended (in
person or by telephone) following the first 4 meetings attended in a calendar year

Continued on next page

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Board Committee Fees

General Policies Relating to Payment of Board Committee Fees

	1.	 	For each Bancorp Board committee for which there is a parallel Bank Board
committee, to the extent a Board committee fee is payable, only one Board
committee fee will be paid for attendance at the Bank and Bancorp Board
committee meetings, regardless of whether the parallel Board committees meet
jointly or separately, on the same day or within one or two days of each other.
	 
	2.	 	It is intended that committee fees will be payable only for attendance at
“formal” committee meetings. Each regular meeting of a Board committee shall
be considered a “formal” meeting. In the case of any other meetings, the
Chairperson of each Board committee will be responsible for determining whether
a “formal” Board committee meeting has occurred and shall so notify the
Corporate Secretary and provide the Corporate Secretary with the names of the
Board committee members who attended such meeting.
	 
	3.	 	Only Board committee members will be paid for attendance at a “formal” Board
committee meeting, unless the committee Chairperson has specifically requested
the attendance and participation of a Director who is not a member of the Board
committee that is meeting.

Other Fees

Each Non-Employee Director shall receive a $2,500 fee per day for attendance at
other qualifying Board related functions in his or her capacity as Director.
The Chairperson of the Corporate Governance Committee (the “CGC”) shall be
responsible for determining whether such a Board related function has occurred
and notifying the Corporate Secretary with the names of the Directors in
attendance and the length of the function. Attendance and compensation for any
such function shall be reported to the CGC at its next meeting.

Continued on next page

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Annual Grant of Long-Term Incentive Awards to Directors

Each Non-Employee Director who serves on the Bancorp Board and/or the Bank Board shall receive an
annual grant of long-term incentive awards (“Director Incentive Awards”) under the 2002 Incentive
Plan, (as amended and restated from time to time), the 2000 Stock Incentive Plan (as amended and
restated from time to time), the Senior Manager and Non-Employee Director Deferred Compensation
Plan (as amended and restated from time to time), and/or any new incentive or compensation plans
adopted by the Bancorp Board and/or the Bank Board in which Non-Employee Directors are eligible to
participate (collectively, the “Plan”), subject to the following provisions in the Director Option
Awards and Director Restricted Stock/Cash Awards sections below1.

The value of the Director Incentive Awards issued to each Non-Employee Director for a given year
(the “Annual Award Value”) will be equal to the average cash compensation paid by Bancorp and Bank
to all Non-Employee Directors for the prior year, excluding for this purpose cash compensation paid
to any Non-Employee Directors who served a partial term during such year. For purposes of this
valuation, cash compensation will include the annual retainer, additional annual retainer,
committee fees, and other fees, as described above, but will specifically exclude the value of any
Director Incentive Awards, including Restricted Cash Awards granted or distributed in such year.

Director Incentive Awards shall be granted to Non-Employee Directors in the form of non-qualified
options (“NQOs”), Restricted Stock Awards, and/or Restricted Cash Awards2. The timing
of Director Incentive Awards shall follow the provisions of the Board’s Long-Term Incentive Grant
and Stock Ownership Policy. It is intended that each Non-Employee Director will be granted options
to purchase a maximum of 25,000 shares of Bancorp common stock on an annual basis, with the
remainder of the Director Incentive Awards (if any) to be made in the form of Restricted Stock
Awards or Restricted Cash Awards. However, the Board recognizes that it is likely that after the
2008 grant (for fiscal year 2007), the Plan will not contain a number of shares sufficient to grant
such NQOs. If there is an insufficient number of shares available to grant the shares of NQOs that
are calculated based on the Annual Award Value and binomial value of each NQO (see examples below),
then the amount of shares available will be allocated pro rata among the Non-Employee Directors,
and the remainder of the Director Incentive Awards (if any) would be made in the form of Restricted
Stock Awards or Restricted Cash Awards. Ultimately, the Management Development and Compensation
Committee of the Board (“MD&C Committee”) retains the discretion to determine the amount of NQOs,
Restricted Stock Awards, and/or Restricted Cash Awards which will be granted in a given year,
provided that the awards granted in total have a value equal to the Annual Award Value.

Examples. Assume in each of the following examples that the Annual Award Value is
$100,000, the fair market value of Bancorp common stock is $5.00, and 10 Non-Employee Directors are
in office.

 

			
	1	 	Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Plan under which the
Director Incentive Award is granted.
	 
	2	 	Restricted Cash Awards are subject to a three-year
“Restricted Period” under the Senior Manager and Non-Employee Director Deferred
Compensation Plan. Pursuant to such plan, Non-Employee Directors will be
provided an option to invest these amounts in a Bancorp stock account (payable
in Bancorp common stock) or a cash account (payable in cash, with a rate of
return determined by the Management Development and Compensation Committee of
the Board (the “MD&C Committee”) on an annual basis).

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Annual Grant of Long-Term Incentive Awards to Directors, continued

Scenario 1. The binomial value of each NQO is $2.00, and a sufficient number of shares remain in
the Plan. Each Non-Employee Director receives 25,000 NQOs (aggregate value of $50,000) and either
(a) a grant of 10,000 Restricted Stock having (aggregate value of $50,000) or (b) a Restricted Cash
Award of $50,000.

Scenario 2. The binomial value of each NQO is $10.00, and a sufficient number of shares remain in
the Plan. A Non-Employee Director cannot receive 25,000 NQOs because the value of such awards
($250,000) exceeds the Annual Award Value. Accordingly, each Non-Employee Director would receive
10,000 NQOs (aggregate value of $100,000) and no Restricted Stock or Restricted Cash Award.

Scenario 3. The binomial value of each NQO is $2.00, but only 90,000 shares remain in the Plan.
The shares are divided evenly, so that each Non-Employee Director receives 9,000 NQOs (aggregate
value of $18,000) and either (a) a grant of 16,400 shares of Restricted Stock (aggregate value of
$72,000) or (b) a Restricted Cash Award of $82,000.

Scenario 4. The binomial value of each NQO is $2.00, but no shares remain in the Plan. No NQOs
are granted, and each Non-Employee Director receives either (a) a grant of 20,000 shares of
Restricted Stock (aggregate value of $100,000) or (b) a Restricted Cash Award of $100,000.

Director Option Awards

	 	1.	 	Option Grant. Subject to availability of the shares and the MD&C Committee’s
discretion to reduce or eliminate the number of NQOs to be granted in any given year, as
described above in “Annual Grant of Long-Term Incentive Awards to Directors,” NQOs shall be
granted to Non-Employee Directors as follows:

	 	a.	 	On the same date as the grant of annual long-term incentive awards to employees
as described in the Board’s Long-Term Incentive Grant and Stock Ownership Policy (the
“Regular Grant Date”), there shall be granted to each Non-Employee Director then in
office, an NQO (the “Director Option Award”) to purchase the number of shares of
Bancorp stock as determined by the methodology described above in “Annual Grant of
Long-Term Incentive Awards to Directors”.
	 
	 	b.	 	Each NQO shall entitle the Non-Employee Director to purchase shares of Stock at
a price equal to the Fair Market Value of the Stock as of the date the NQO is granted.

	 	2.	 	Prior Plan. This Policy replaces any automatic option grant provisions
relating to directors under any prior Company incentive plans.
	 
	 	3.	 	Vesting. A Director Option Award held by a Non-Employee Director will become
vested and exercisable ratably as to one-third of the shares subject to the Award on the
first, second and third anniversaries of the date of grant. A recipient of a Director
Option Award who ceases to be a Director shall forfeit the Director Option Award if it is
not exercisable on or prior to his or her date of termination; provided, however, that:

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Annual Grant of Long-Term Incentive Awards to Directors, continued

	 	a.	 	If a recipient of a Director Option Award ceases to be a Director by reason of
his or her death or Disability, any portion of the Director Option Award that is not
then exercisable shall become exercisable on his or her date of termination;
	 
	 	b.	 	If a recipient of a Director Option Award is not re-nominated after at least
five (5) years service as a Director, and if he or she remains on the Board until his
or her normal term expires, then any portion of the Director Option Award that is not
then exercisable shall become exercisable on his or her date of termination, and
	 
	 	c.	 	If a recipient of a Director Option Award is not reelected to the Board then
any portion of the Director Option Award that is not then exercisable shall become
exercisable on his or her date of termination, provided that such failure to be
reelected:

	 	i.	 	Occurs after at least five (5) years service as a Director; or
	 
	 	ii.	 	Is pursuant to the Board’s acceptance of a Form Resignation as
contemplated by Article II, Section 12 of the Amended and Restated Bylaws of
Bancorp (the “Bylaws”) after such Director fails to receive a sufficient number of
votes for re-election, in accordance with Article II, Section 6 of the Bylaws (the
“Required Vote”), at the next meeting of Bancorp’s shareholders (the “Applicable
Meeting”).

	 	d.	 	Any Director Option Award that is held by an individual serving as a Director
on the date of a Change in Control, as such term is defined in the 2002 Incentive Plan,
as amended and restated, or a successor plan adopted by Bancorp (“Change in Control”),
that is not then exercisable shall become exercisable on the date of the Change of
Control.

	 	4.	 	Exercise. To the extent that a Director Option Award is exercisable, it may be
exercised in whole or in part by filing a written notice with the Stock Award Administrator
of Bancorp at its corporate headquarters prior to the date the Option expires. Such notice
shall specify the number of shares of Stock which the Director elects to purchase.
	 
	 	5.	 	Payment of Purchase Price. Upon exercise of a Director Option Award, payment
of the exercise price shall be satisfied using a method permitted under the Plan.
	 
	 	6.	 	Expiration. A Director Option Award granted to a Non-Employee Director shall
expire on the latest date permitted under the Plan. However, in no event shall the
Director Option Award be exercisable after:

	 	a.	 	The one-year anniversary of the date of termination of the Director, if the
termination occurs by reason of the Non-Employee Director’s (i) death, (ii) Disability,
or (iii) ceasing to be a Director because he or she is not re-nominated or reelected to
the Board after at least five (5) years service as a Director, provided that he or she
remains on the Board until his or her normal term expires;

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Annual Grant of Long-Term Incentive Awards to Directors, continued

	 	b.	 	The one year anniversary of the date of termination of the Director, if the
termination occurs by reason of the Non-Employee Director’s resignation as a Director
pursuant to the Board’s acceptance of a Form Resignation as contemplated by Article II,
Section 12 of the Bylaws after such Director fails to receive the Required Vote at the
Applicable Meeting;
	 
	 	c.	 	The date of termination of the Director, if the termination occurs by reason of
Cause; and
	 
	 	d.	 	The three-month anniversary of the date of termination of the Director, if the
termination occurs for reasons other than as provided in (a), (b) or (c) above.

For purposes of this Director Compensation Policy, “Cause” shall mean, with respect to any
Non-Employee Director, termination from the Board on account of any act of (i) fraud or intentional
misrepresentation, (ii) embezzlement, misappropriation or conversion of assets or opportunities of
the Company or any subsidiary or affiliate, or (iii) conviction of a felony.

Director Restricted Stock Awards or Restricted Cash Awards

	 	1.	 	Grant of Restricted Stock Award or Restricted Cash Award. Subject to the MD&C
Committee’s discretion, as described above in “Annual Grant of Long-Term Incentive Awards
to Directors,” each Non-Employee Director shall be granted an award in the form of
Restricted Stock (“Restricted Stock Award”) or Restricted Cash (“Restricted Cash Award”)
having a value equal to the difference obtained by subtracting (i) the value of the NQOs
granted to Non-Employee Directors for such year (determined using the same valuation method
used by Bancorp for financial reporting purposes (presently an Enhanced Binomial
Model3)) from (ii) the Annual Award Value for a given year. For example, if the
Annual Award Value for a given year is $100,000 and a Non-Employee Director will receive
NQOs having a value equal to $30,000, the Non-Employee Director will receive a Restricted
Stock Award having a value of $70,000 (based upon the then-current fair market value of
Bancorp common stock) or a Director Restricted Cash Award of $70,000. The Restricted Stock
Award or Restricted Cash Award will be granted on the Regular Grant Date. For purposes of
this policy, the award granted pursuant to this section is referred to as the “Restricted
Award.” The MD&C Committee will determine whether Restricted Stock or Restricted Cash
Awards will be issued with respect to a given year. Until determined otherwise, it is
presumed that the awards will be issued in the form of Restricted Cash Awards.

 

			
	3	 	Starting in 2006, Indymac has adopted the Enhanced
Binomial Model (the “Model”) for purposes of valuing stock options pursuant to
periodic grants and expense recording. Indymac Bank’s Analytics Valuation
Group calculates the option value at each stock option grant date using the
Model.
	 
	 	 	Pursuant to SFAS123(R) requirements for purposes of GAAP expense recording, the
Model includes a pool level forfeiture assumption in determining the option
value. This assumption reduces the relative value of an option. Since stock
options have value only to the extent the recipient remains an employee through
vesting, the individual option valuation does not include the forfeiture
assumption. As such, for purposes of determining the number of option shares
granted to an individual employee (or director) for a given dollar value, the
forfeiture assumption is removed from the calculation of the option value in
the Model.

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Annual Grant of Long-Term Incentive Awards to Directors, continued

	 	2.	 	Restricted Period. The “Restricted Period” for the Restricted Award shall
begin on the Regular Grant Date and end ratably as to one-third of each Director Restricted
Stock Award or Restricted Cash Award on the first, second and third anniversaries of the
date of grant,
	 
	 	3.	 	Forfeiture of Restricted Award. A recipient of a Restricted Award who ceases
to be a Director shall forfeit the portion of the Restricted Award that is not vested
immediately prior to his or her date of termination; provided, however, that

	 	a.	 	If a recipient of a Restricted Award ceases to be a Director by reason of his
or her death or Disability, any portion of the Restricted Award that is not then vested
shall become vested on his or her date of termination;
	 
	 	b.	 	If a recipient of a Restricted Award is not re-nominated after at least five
(5) years service as a Director, and if he or she remains on the Board until his or her
normal term expires, then any portion of the Restricted Award that is not then vested
shall become vested on his or her date of termination;
	 
	 	c.	 	If a recipient of a Restricted Award is not reelected to the Board, then any
portion of the Restricted Award that is not then vested shall become vested on his or
her date of termination, provided that such failure to be reelected:

	 	i.	 	occurs after at least five (5) years service as a Director; or
	 
	 	ii.	 	is pursuant to the Board’s acceptance of a Form Resignation as
contemplated by Article II, Section 12 of the Bylaws after such Director fails to
receive the Required Vote, at the Applicable Meeting, then any portion of the
Director Restricted Cash Award that is not then vested shall become vested on his
or her date of termination, and

	 	d.	 	Any portion of a Restricted Award that is held by an individual serving as a
Director on the date of a Change in Control, as such term is defined in the 2002
Incentive Plan, as amended and restated, or a successor plan adopted by Bancorp
(“Change in Control”), that is not then vested shall become vested on the date of the
Change of Control.

Distributions of vested Restricted Cash Awards shall be made as provided in the Senior Manager
and Non-Employee Director Deferred Compensation Plan.

	 	4.	 	Restricted Cash Award Investment Options. Recipients of Restricted Cash Awards
shall be provided with two investment options for the Restricted Cash Award: (1) the
option to invest in Bancorp stock or, (2) the option to keep the award in cash earning a
rate of return to be determined by the MD&C Committee annually.

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

New Director Awards

Upon the election of a newly elected Non-Employee Director, there shall be granted automatically
(without any action by the MD&C Committee or the Board) a Restricted Cash Award, the grant date of
which shall be the date of such election, to each newly elected Non-Employee Director (the “New
Director Award”) as follows:

a. If the Non-Employee Director is elected within six months after the most recent Regular
Grant Date, the New Director Award shall have the same Annual Award Value as the annual
Director Incentive Awards which were granted to existing Non-Employee Directors on the most
recent Regular Grant Date; and

b. If the Non-Employee Director is elected more than six months after the most recent Regular
Grant Date, but prior to the date on which Director Incentive Awards are granted to existing
Non-Employee Directors, the New Director Award shall have an aggregate value equal to one-half
of the Annual Award Value of the most recent annual Director Incentive Awards which were
granted to existing Non-Employee Directors on the most recent Regular Grant Date.

New Director Awards shall be subject to the other terms and conditions relating to Director
Restricted Cash Awards as described in this Policy.

Awards under Prior Policy

Certain Non-Employee Directors were granted stock options and restricted stock under prior versions
of this Policy. The terms and conditions of such awards will remain subject to the terms of the
plans and agreements under which they were granted. Any changes contained in this January 29, 2008
revision to this Policy shall not affect the terms and conditions of such prior awards.

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Stock Ownership Requirement

Stock options have traditionally been provided to Directors and officers of publicly traded
companies for two primary reasons: 1) to more closely align the interests of Directors and
officers with those of shareholders, and 2) to be a long-term compensation incentive. A number of
surveys done in recent years roughly estimate that 1/3 of the surveyed companies have stock
ownership guidelines and it is a growing trend. In addition, a stock ownership requirement is
considered a “positive” by shareholder subscription services in measuring corporate governance. In
order to ensure that Indymac’s compensation programs have these two effects and to continue to
improve our corporate governance profile, we have instituted stock ownership requirements for
Section 16 Officers of Bancorp (“Executive Officers”) (see separate “Stock Ownership Requirements
for Executive Officers”) and for Non-Employee Directors of the Bank and/or Bancorp.

For Non-Employee Directors, the requirement is:

	 	•	 	Each Non-Employee Director who has served as such for at least three years is expected
at all times to own common shares of Bancorp with a value equal to three times his or her
then-current annual Board retainer fee.

The “annual Board retainer fee” shall include the $75,000 base annual retainer, but it shall
exclude any additional retainer for service as Presiding Director and/or as a member of the Audit
Committee of Bancorp and/or the Bank, committee meeting fees, and the value of equity awards.

The value of vested stock options (net of tax), as determined by Indymac, shall be included in
computing whether a Non-Employee Director has met the stock ownership guidelines.

It is not the purpose or expectation of these requirements to require Non-Employee Directors to
purchase stock in the open market if they fall below the requirements set out above; however, it is
the purpose and expectation of these requirements that no Non-Employee Director will sell stock of
Bancorp (including stock obtained from the exercise of options) if the Director would fall below
the relevant requirements after the sale of such stock.

The full value of stock that is held in joint ownership by a Non-Employee Director shall be treated
as owned by him/her for purposes of these requirements, so long as he/she holds at least a 50%
ownership interest in the stock.

Continued on next page

Director Comp Policy Approved at 1/29/2008 BOD Meeting

 

 

Director Compensation & Stock Ownership Policy, continued

Director Compensation Review

Directors who are employees of the Company shall not receive any compensation for their services as
Directors. Management or a consultant designated by the Corporate Governance Committee shall
consider reporting once every two years, but in no event more than five years from the last report,
to the Corporate Governance Committee concerning the status of Board compensation in relation to
compensation paid to Board members by other companies of a comparable size, complexity and
industry. Changes in Board compensation, if any, should be recommended by the Corporate Governance
Committee, but with discussion and approval by the Board. Director compensation will be disclosed
each year in the Company’s proxy statement relating to its Annual Meeting of Stockholders.

Director Health and Welfare Benefits

The Bank offers health and welfare benefits to non-employee directors of Bancorp and Bank that
include medical, dental, vision, and travel accident coverage (“Benefits”). These Benefits are
extended under certain Bank benefit plans wherein the Company pays a portion of the insurance
premium cost. The portion paid by the Company is reported as income in each participating
director’s annual IRS Form 1099. Benefits are available only for existing Directors, i.e., those
who served on the Bancorp or Bank Board as of December 31, 2007. Bancorp and the Bank reserve the
right to change or terminate such benefits in their discretion.

Director Emeritus Plan

Bancorp and the Bank have a Director Emeritus Plan (the “Emeritus Plan”), which provides a retiring
Director, who is selected by the Board of Directors to participate in the program, with a benefit
based upon the Director’s length of service and the Director’s level of cash compensation for the
three years’ prior to selection into the Emeritus Plan. The Emeritus Plan requires that a Director
who is selected to participate in the Emeritus Plan agrees to a consulting provision and to refrain
from competing with Bancorp or the Bank during the course of the Director’s participation in the
Emeritus Plan. The Emeritus Plan is available only for Directors who served on the Bancorp Board
or Bank Board as of December 31, 2005, or who already were participating in the Emeritus Plan as of
such date.

Director Comp Policy Approved at 1/29/2008 BOD Meetingexv10w18

 

EXHIBIT 10.18

January 29, 2008

Blair Abernathy

Dear Blair:

     This letter amends your Employment Agreement with IndyMac Bank, F.S.B. (“Employer”) dated as
of July 1, 2006 (your “Employment Agreement”).

Section 4.1 of your Employment Agreement is amended and restated as follows:

     4.1 Base Salary. Employer shall pay to Employee a base salary at the annual rate set
forth in Appendix A. Employee’s base salary shall be payable in equal monthly or more
frequent installments as are customary under Employer’s payroll practices from time to time.
Employer may, in its sole discretion, increase Employee’s base salary during the term of this
Agreement, but Employer will not decrease Employee’s base salary below the amount set forth in
Appendix A. Notwithstanding the foregoing, effective March 1, 2008 and until otherwise
determined by Employer, Employee’s base salary shall be $595,650, which reflects a five
percent (5%) decrease from Employee’s base salary in effect on January 29, 2008.

Section 4.2 of your Employment Agreement is amended and restated as follows:

     4.2 Cash Incentive Compensation. During the term of this Agreement, Employee
will be eligible to receive annual or quarterly cash bonuses, based upon performance
criteria established from time to time by the Board of Directors of Employer, a committee of the
Board, or its authorized delegate, in its sole discretion, and administered pursuant to
Employer’s Senior Manager Cash Incentive Plan policy, or other such policy or program covering Employee
at the time the performance criteria are established. The initial performance criteria
relating to Employee’s cash incentive awards outstanding as of the Effective Time are set forth in
Appendix B, but may be changed by Employer from time to time pursuant to such policy. Unless
otherwise determined by Employer, any annual or quarterly bonus shall be prorated to the extent
that Employee is employed for less than the full bonus period. Notwithstanding the
foregoing, for fiscal year 2008, Employee’s cash incentive compensation shall be an amount equal to
seventy-five percent (75%) of annualized cash incentive payments made to Employee for fiscal
year 2007 (i.e., payments made after March 31, 2007 and prior to March 31, 2008).

Section 4.3 of your Employment Agreement is amended by renaming such section “Long-Term Incentive
Compensation.” All references to the term “equity incentive” in your Employment Agreement shall be
replaced with the term “long-term incentive.” Section 4.3 is further amended by adding the
following sentence to the end of such section:

     Special Senior Manager Option Award. Notwithstanding the foregoing and if approved by
the Board of Directors Management Development & Compensation Committee, in fiscal year 2008,
Employee shall receive a stock option to purchase 65,000 shares of IndyMac Bancorp, Inc.
common stock (the “2008 Option”), or the equivalent value per GAAP. The 2008 Option shall be
granted under, and pursuant to the terms and conditions of, the Indymac Bancorp, Inc. 2002
Incentive Plan, as Amended and Restated, and shall have an exercise price equal to the Fair
Market Value (as defined in such plan) of a share of IndyMac Bancorp, Inc. common stock on
the date of grant.

 

 

Section 5.1.3 of your Employment Agreement is amended by adding the following new subsection (vi):

     (vi) Employee’s failure to comply with Employer’s policies and internal regulations
related to internal controls and risk tolerance, including Employee’s inability to cure such
failure to Employer’s reasonable satisfaction within 90 days following Employer’s delivery to
Employee of a written demand for substantial performance which specifically identifies the manner
in which Employer believes that Employee has failed to comply with such policies and internal
regulations.

All of the other terms of your Employment Agreement that are not amended by this letter shall
remain in full force and effect.

Please sign this letter to confirm your agreement with the amendment and the terms described herein
and return it to Jennifer Pikoos, FVP Compensation & Benefits.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Acknowledged and Agreed to By:	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Jim Barbour

	 	 	 	Signature:
	 	/s/ Blair Abernathy
	 	 
	 

	 	 	 	 	 	 	 	 
	IndyMac Bank, F.S.B.	 	 	 	 	 	Blair Abernathy	 	 
	 	 	 	 	Date: 2/6/08

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