Document:

exv10w1

 

Exhibit 10.1

BOARD OF DIRECTORS POLICIES

Board Compensation Policy & Stock Ownership

Requirements (Effective 7/26/04)

IndyMac Bancorp Board and IndyMac Bank Board Annual Retainer

Each Non-Employee Director who serves on the IndyMac Bancorp Board of Directors
and/or the Board of Directors of its wholly owned subsidiary, IndyMac Bank,
shall receive an annual retainer of $50,000 for service on either or both the
IndyMac Bancorp Board or the IndyMac 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
IndyMac Bancorp and/or IndyMac Bank shall receive an additional annual retainer
of $20,000, for a total annual retainer of $70,000. The Presiding Director
shall receive an additional annual retainer of [$20,000].

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
IndyMac Bank (provided that stock options shall be issued by IndyMac Bancorp,
which shall receive a make-whole payment from IndyMac Bank at the time of
exercise). 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 IndyMac
Bancorp.

IndyMac Bank Board Meeting Fee

Each Non-Employee Director who serves on the IndyMac Bank Board of directors
shall receive a $2,500 fee for attendance at each IndyMac Bank Board meeting.

IndyMac Bancorp Board and IndyMac Bank Board Committee Fees

Each Non-Employee Director who serves on an IndyMac Bancorp Board Committee or
an IndyMac Bank Board Committee shall receive fees for attendance at committee
meetings as follows:

	 	 	 
	Committee Chairmen:

	 	$2,500 per meeting for each meeting chaired in a calendar year
	 
	Committee Members:

(including Chairmen)

	 	No separate fee for the first 4 committee meetings (cumulative, for directors serving on multiple distinct committees) attended in a calendar year
	 
	

	 	$2,500 for each committee meeting attended following the

first 4 meetings attended in a calendar year
	 
	 

	 	 	 	 	 	 	 	 	 
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BOARD COMPENSATION & STOCK OWNERSHIP REQUIREMENTS

General Policies Relating to Payment of Board Committee Fees

	1.	 	For each IndyMac Bancorp Board Committee for which there is a parallel
IndyMac Bank Board Committee, to the extent Board Committee fee is
payable, only one Board Committee fee will be paid for attendance at the
IndyMac Bank and IndyMac 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 Chairman of each Board Committee will be responsible for determining
whether a “formal” Board Committee meeting has occurred and shall so
notify the Executive Vice President, Corporate Secretary of IndyMac Bank
and provide the Executive Vice President, 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 Chairman has specifically
requested a non-member’s attendance and participation.

Annual Grant of Equity Awards to Directors

Each Non-Employee Director who serves on the IndyMac Bancorp Board of Directors
and/or the IndyMac Bank Board of Directors shall receive an annual grant of
equity awards (“Director Equity Awards”) under the 2002 Incentive Plan, as
amended and restated (the “Plan”), subject to the following terms. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Plan.

	1.	 	Awards. Director Equity Awards shall be granted to Non-Employee
Directors in the form of non-qualified options (“NQOs”) in accordance with
the provisions set forth herein, provided that each Non-Employee Director
may elect to receive Restricted Stock in lieu of part or all of such NQO
by filing an Election Form pursuant to paragraph 2 below. Each
Non-Employee Director may elect to receive Restricted Stock in 25%
increments of such NQO, up to 100% of such NQO. In the event that a
Non-Employee Director makes any such election, he will receive a
corresponding reduction in the number of shares of Stock covered by the
NQO. The determination as to the equivalency of the number of shares of
Stock covered by the NQO shall be made by using the Black-Scholes
valuation model.
	 
	2.	 	Election Form. In order to receive a portion of a Director Equity Award
in the form of Restricted Stock, the Non-Employee Director must file an
“Election Form,” as provided by the Company, with the Secretary of the
Company specifying the form of the Director Equity Award the Director
elects to receive. The Election Form must be filed prior to or on the
same day as the Company’s annual grant of Awards to Employees or, in the
case of a new Non-Employee Director, before the

	 	 	 	 	 	 	 	 	 
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BOARD COMPENSATION & STOCK OWNERSHIP REQUIREMENTS

	 	 	commencement of such Non-Employee Director’s term of office. The
Non-Employee Director’s election shall remain in effect for Director Equity
Awards made in each subsequent year, unless he or she files a revised
Election Form or written revocation of the election with the Secretary of
the Company before the subsequent annual grant of Awards to Employees. The
Non-Employee Director’s election shall be irrevocable after the Director
Equity Award for a particular year has been granted.

Director Option Awards

	3.	 	Option Grant. Subject to paragraphs 1 and 2, NQOs shall be granted to
Non-Employee Directors electing to receive options, as follows:

	 	a.	 	On the same date as the annual grant of Awards to Employees under
the Plan in each calendar year after 2004 and during the term of the
Plan (the “Regular Grant Date”), there shall be granted automatically
(without any action by the Committee or the Board) to each Non-Employee
Director then in office an NQO (the “Director Option Award”) to
purchase the number of shares of Stock of the Company equal to 0.025%
of the issued and outstanding shares of Stock (excluding any Stock held
in treasury by the Company) as of the end of the preceding fiscal year.
	 
	 	b.	 	Upon the election of a newly elected Non-Employee Director, there
shall be granted automatically (without any action by the Committee or
the Board) an NQO, the grant date of which shall be the date of such
election, to each newly elected Non-Employee Director (the “New
Director Option Award”) as follows: (i) if the Non-Employee Director is
elected within six months after the most recent Regular Grant Date, the
New Director Option Award shall cover the same number of shares of
Stock for which Director Option Awards were granted to existing
Non-Employee Directors on the most recent Regular Grant Date; and (ii)
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
Options are granted to existing Non-Employee Directors, the New
Director Option Award shall cover one-half the number of shares of
Stock for which the most recent Director Option Awards were granted to
existing Non-Employee Directors on the most recent Regular Grant Date.
	 
	 	c.	 	In no event shall a Director Option Award granted under paragraph
3(a) above cover fewer than 7,500 shares of Stock.
	 
	 	d.	 	A Director Option Award and New Director Option Award 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 Option is
granted.
	 
	 	e.	 	For all subsequent provisions contained herein, Director Option
Awards and New Director Option Awards shall be referred to collectively
as “Director Option Awards.”

	 	 	 	 	 	 	 	 	 
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BOARD COMPENSATION & STOCK OWNERSHIP REQUIREMENTS

	4.	 	Prior Plan. No Director Option shall be granted under any prior Company
incentive plans to any Non-Employee Director for any calendar year for
which a Director Option Award is granted under the Plan.
	 
	5.	 	Vesting. A Director Option Award held by a Non-Employee Director will
become fully exercisable on the one-year anniversary 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 immediately
prior to his or her date of termination; provided, however, that (i) if a
recipient of a Director Option Award ceases to be a Director by reason of
his or her death, Disability, or retirement or resignation as a director
after at least five (5) years service as a director (“Retirement”), any
portion of the Director Option Award that is not then exercisable shall
become exercisable on his or her date of termination; and (ii) any
Director Option Award that is held by an individual serving as a Director
on the date of a Change in Control that is not then exercisable shall
become exercisable on the date of the Change of Control.
	 
	6.	 	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 the Company 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, and shall
be accompanied by payment of the exercise price for such shares of Stock
indicated by the Director’s election.
	 
	7.	 	Payment of Purchase Price. Upon exercise of a Director Option Award, the
exercise price shall be paid in full in cash equivalents or in shares of
Stock (by actual delivery or attestation) valued at their Fair Market
Value at the time of exercise of the Option or partly in such shares and
partly in cash; provided that any such shares used in payment shall have
been owned by the Director for at least such period of time, if any, as is
necessary to avoid variable accounting for the Option). A Non-Employee
Director may also elect to pay the exercise price by irrevocably
authorizing a third party to sell shares of Stock (or a sufficient portion
of the shares) acquired upon exercise of the Director Option Award and
remit to the Company a sufficient portion of the sale proceeds to pay the
entire exercise price and any tax withholding resulting from such
exercise.
	 
	8.	 	Expiration. A Director Option Award granted to a Non-Employee Director
shall expire on the tenth anniversary of the grant date. However, in no
event shall the Director Option Award be exercisable after:

	 	a.	 	If the termination occurs by reason of the Non-Employee Director’s
death, Disability or Retirement, the one-year anniversary of the date
of termination of the Director;
	 
	 	b.	 	If the termination occurs by reason of Cause, the date of
termination of the Director; and
	 
	 	c.	 	If the termination occurs for reasons other than death, Disability,
Retirement, or Cause, the three-month anniversary of the date of
termination of the Director.
	 
	 

	 	 	 	 	 	 	 	 	 
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BOARD COMPENSATION & STOCK OWNERSHIP REQUIREMENTS

	 	 	 	To the extent that any Director Option Award is not exercised prior to (i) a
dissolution of the Company or (ii) a merger or other corporate event that
the Company does not survive, and no provision is made for the assumption,
conversion, substitution or exchange of the Option, the Director Option
Award shall terminate upon the occurrence of such event.
	 
	 	 	 	For purposes of this Board 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

	9.	 	Restricted Stock Grant. Each Non-Employee Director who files an Election
Form in accordance with paragraph 2 requesting receipt of any portion of a
Director Equity Award in Restricted Stock shall be granted, in lieu of
part or all of a Director Option Award, a “Director Restricted Stock
Award” covering the number of shares of Stock determined in accordance
with the provisions of paragraph 1 (the “Covered Shares”). Director
Restricted Stock Awards shall be granted at the same time as the Director
Option Awards are granted.
	 
	10.	 	Restricted Period. The “Restricted Period” for the Covered Shares shall
begin on the Regular Grant Date and end as to one-third of each Director
Restricted Stock Award on the first, second and third anniversaries of the
Regular Grant Date.
	 
	11.	 	Transfer and Forfeiture of Shares. A recipient of a Director Restricted
Stock Award who ceases to be a Director shall forfeit the portion of the
Director Restricted Stock Award that is not vested immediately prior to
his or her date of termination; provided, however, that (i) if a recipient
of a Director Restricted Stock Award ceases to be a Director by reason of
his or her death, Disability, or Retirement, any portion of the Director
Restricted Stock Award that is not then vested shall become vested on his
or her date of termination; and (ii) any portion of a Director Restricted
Stock Award that is held by an individual serving as a Director on the
date of a Change in Control that is not then vested shall become vested on
the date of the Change of Control. In the event of (i) or (ii) above, the
Covered Shares shall be transferred to the Director free of all
restrictions upon the date they become fully vested. If the Non-Employee
Director remains a Director on the last day of the applicable Restricted
Period, then, at the end of such Restricted Period, the applicable portion
of the Covered Shares shall be transferred to the Director free of all
restrictions.
	 
	12.	 	Dividends. Dividends, if any, accrued on Covered Shares during the
Restricted Period shall be credited to the Non-Employee Director and held
by the Company on his or her behalf. The Non-Employee Director’s interest
in the dividends shall vest on the same date that his or her interest in
the Covered Shares vest. In the event that any portions of the Covered
Shares are forfeited in accordance with paragraph
11, the accrued and unpaid dividends relating to the Covered Shares also
shall be forfeited.
	 
	 

	 	 	 	 	 	 	 	 	 
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BOARD COMPENSATION & STOCK OWNERSHIP REQUIREMENTS

	13.	 	Voting. The Non-Employee Director shall not be prevented from voting the
Covered Shares merely because those shares are subject to the restrictions
imposed by the Plan; provided, however, that he or she shall not be
entitled to vote Covered Shares with respect to record dates for any
Covered Shares occurring on or after the date, if any, on which he or she
has forfeited those shares.
	 
	14.	 	Ownership of Shares. The Covered Shares issued pursuant to any Director
Restricted Stock Award shall be held by the Company’s stock transfer agent
for the benefit of the Non-Employee Director until the end of the
applicable Restricted Period. The Non-Employee Director shall be
identified as the beneficial owner of the Covered Shares at the time the shares are issued.

Director Emeritus Plan

IndyMac Bancorp and IndyMac Bank have a Director Emeritus Plan (the “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 Plan. The Plan requires that a director who is
selected to participate in the Plan agree to refrain from competing with
IndyMac Bancorp or IndyMac Bank during the course of the director’s
participation in the Plan.

Stock Ownership Requirements

Stock options have traditionally been provided to directors and officers of
publicly traded companies for two primary reasons. One, to more closely align
the interests of directors and officers with those of shareholders, and two, 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 ISS in measuring corporate
governance. In order to ensure that IndyMac’s stock option program has these
two effects and to continue to improve our corporate governance profile, we are
instituting stock ownership requirements for Section 16 Officers of IndyMac
Bancorp (“Executive Officers”) (see separate “Stock Ownership Guidelines for
Executive Officers”) and for Directors of IndyMac Bank and/or IndyMac Bancorp
who are not also Executive Officers (“Directors”). The following are the
requirements for Directors.

Directors who have served as such for at least three years are expected at all
times to own common shares of IndyMac Bancorp with a value equal to one times
the then-current Board retainer fee.

Interpretive Rules

The “value” of vested stock options shall be included in computing whether a
Director has met the stock ownership guidelines. The value of vested stock
options at any time

	 	 	 	 	 	 	 	 	 
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BOARD COMPENSATION & STOCK OWNERSHIP REQUIREMENTS

shall be deemed to be 70% of the net unrealized gain
represented by those stock options.

It is not the purpose or expectation of these requirements to require Directors
to purchase stock in the open market if they fall below the expectations set
out above, however, it is the purpose and expectation of these requirements
that no Director will sell stock of IndyMac 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 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.

	 	 	 	 	 	 	 	 	 
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1-55exv10w2

 

Exhibit 10.2

INDYMAC BANCORP, INC.

CASH INCENTIVE AWARD PROGRAM

UNDER THE

2002 INCENTIVE PLAN, AS AMENDED AND RESTATED

ARTICLE 1

ESTABLISHMENT OF PROGRAM

     1.1 Background of Plan. The Cash Incentive Award Program (the “Program”)
is a subplan of the IndyMac Bancorp, Inc. 2002 Incentive Plan, as Amended and
Restated (the “Plan”), consisting of a program for the grant of Cash Incentive
Awards under Section 4 of the Plan. The Program has been established and
approved, and will be administered by, the Management Development and
Compensation Committee pursuant to the terms of the Plan. It is intended that
Awards under the Program shall be fully deductible by the Company without
regard to the limitations of Code Section 162(m). The Effective Date of the
Program is March 1, 2004.

     1.2 Purpose. The purpose of the Program is to increase Participants’
economic interest in the success of the Company, to encourage Participants to
continue employment with the Company, and to reward Participants for achieving
long-term performance goals established by the Committee.

ARTICLE 2

ADMINISTRATION

     2.1 Committee. The Program shall be administered by the Management
Development and Compensation Committee of the Board of Directors of the
Company.

     2.2 Authority of Committee. The Committee has the authority and
discretion to administer the Plan pursuant to the terms of Section 7.2 of the
Plan, including the exclusive power, authority and discretion to: (a) designate
Participants; (b) grant Cash Incentive Awards under the Program and establish
the terms, conditions, Performance Goals, restrictions, and other provisions of
such Awards, (c) reduce any Cash Incentive Award, regardless of the achievement
of designated Performance Goals; (d) interpret the Program, establish, amend,
and rescind any rules and regulations relating to the Program, and determine
the terms and provisions specified in any Award Matrix under the Program; (e)
make all other decisions and determinations that may be required under the
Program or as the Committee deems necessary or advisable to administer the
Program; and (f) subject to Article 6 hereof, amend, modify, or terminate the
Program as provided herein.

     2.3. Decisions Binding. The Committee’s interpretation of the Program and
all decisions and determinations by the Committee with respect to the Program
are final, binding, and conclusive on all parties.

ARTICLE 3

ELIGIBILITY

     3.1. General. Participation in the Program is limited to key executives
of the Company and any Subsidiary who are members of a select group of highly
compensated or management employees who, through the effective execution of
their assigned duties and responsibilities, are in a position to have a direct
and measurable impact on the Company’s financial results, and are designated by
the Committee to be eligible for a Cash Incentive Award. Initially,
Participants shall be the executives comprising the

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Company’s Executive
Committee, other than Messrs. Perry and Wohl. The Committee will consider each
of Messrs. Perry and Wohl for participation when and if their employment
agreements are renegotiated.

     3.2. Demotions. If a Participant is demoted during a Performance Period,
the Committee will determine, in its sole discretion, whether the Participant
shall end participation in the Program at that time, or shall continue as a
Participant, perhaps at a reduced level. If participation ends, any Cash
Incentive Awards earned during the time of participation will be prorated for
the applicable Performance Periods, and will be paid only if the Participant is
still an employee at the time that payouts of his or her Cash Incentive Awards
are made. Any such proration shall be based on the number of full months the
Participant participated in the Program during the applicable Performance
Period. Payouts of Cash Incentive Awards in this situation shall be calculated
and paid after the end of the relevant Performance Periods, the same as for
other Participants.

ARTICLE 4

DEFINITIONS

     4.1 Definitions. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned such terms in the Plan. In addition, the
following terms shall have the following meanings for purposes of the Program:

	 	(a)	 	“Award Matrix” means a matrix adopted by the Committee with
respect to a Performance Period equating the value of a Cash
Incentive Award to the attainment of Performance Goals. The Payout
Matrix for the initial three-year Performance Period (2004-2006) is
set forth on Exhibit A hereto.
	 
	 	(b)	 	“Cash Incentive Award” means a cash award payable to a
Participant in the Program based on the achievement of threshold
performance or better during a Performance Period.
	 
	 	(c)	 	“Committee” means the Management Development and Compensation
Committee of the Board of Directors of the Company.
	 
	 	(d)	 	“Covered Employee” means a covered employee as defined in
Code Section 162(m)(3).
	 
	 	(e)	 	“EPS CAGR” means the compound annual growth rate in the
Company’s earnings per common share, calculated on a fully diluted
basis, as determined under Generally Accepted Accounting Principles
(GAAP) as reported in the Company’s financial statements.
	 
	 	(f)	 	“Payout Date” means the date on which the Committee effects
the payout of a Cash Incentive Award. In normal circumstances, such
date must be within thirty (30) days following the end of the
relevant Performance Period; provided, however, that in no event
will a Payout Date for a Covered Employee occur prior to the
certification by the Committee of the value of the Cash Incentive
Awards based on the achievement of Performance Goals over the
Performance Period. In the event of a Change in Control, the Payout
Date means the earlier of (i) the one-year anniversary of the Change
in Control, or (ii) the date of such Participant’s termination of
employment following such Change in Control due to his or her death,
Disability, termination without Cause, or resignation for Good
Reason.
	 
	 	(g)	 	“Performance Goals” are goals established by the Committee
with respect to a Performance Period that determine the value of a
Cash Incentive Award for such Performance Period. In accordance
with Sections 4.3 and 9(q) of the Plan, Performance Goals shall be
determined

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	 	 	 	solely on the basis of on any one or more of the
following, as selected by the Committee: core earnings; net worth;
asset quality; efficiency ratio; loan origination; deposit growth;
interest rate risk; earnings per share; return on average common
equity; return on average equity; net operating expense, either
before or after amortization of intangible assets (goodwill);
operating earnings (earnings before transaction-related expense) per
diluted share of common stock, either before or after amortization
of intangible assets (goodwill); return on average assets, ratio of
non-performing assets to total assets; customer service; and
regulatory compliance. The Performance Goals for the initial
three-year Performance Period are based on ROE and EPS CAGR as, set
forth in the Award Matrix attached hereto as Exhibit A.

	 	(h)	 	“Performance Period” means a three-year period established by
the Committee from time to time over which performance will be
measured to determine the value of Cash Incentive Awards. The
initial Performance Period under the Program is the three-year
period including fiscal years 2004, 2005, and 2006. The Committee
may determine and declare subsequent Performance Periods from time
to time. Performance Periods may, but need not, overlap.
	 
	 	(i)	 	“Retirement” means retirement or resignation after at least
ten (10) years of employment with the Company or a Subsidiary and
the attainment of age 55.
	 
	 	(j)	 	“ROE” means return on average equity as determined under
Generally Accepted Accounting Principles (GAAP) as reported in the
Company’s financial statements.
	 
	 	(k)	 	“Target Units” means the number of shares of Stock in which a
Cash Incentive Award is initially denominated, as determined
pursuant to Section 5.1.

ARTICLE 5

OPERATION OF THE PLAN

     5.1 Target Units. Cash Incentive Awards initially shall be denominated in
a number of shares of Stock determined by the Committee, which shall serve as
the Target Units for the relevant Performance Period. The number of Target
Units relating to each Cash Incentive Award normally will be equal to that
number of shares of Stock having a Fair Market Value on the grant date equal to
50% of the annual cash bonus earned by a Participant for performance in the
prior fiscal year (but not less than 25% of, or greater than 75% of, the
Participant’s target bonus for such prior fiscal year), but may be determined
otherwise in the sole discretion of the Committee. Each Participant’s Target
Units for the initial Performance Period (2004-2006) is set forth on Exhibit B
hereto.

     5.2 Vesting. Cash Incentive Awards will cliff vest at the end of the
relevant Performance Period, and there will be no partial or ratable vesting
prior to such date. Notwithstanding the foregoing, in the event of a
Participant’s termination of employment by reason of death, Disability or
Retirement under Section 5.8 hereof, his or her Cash Incentive Awards will vest
upon the date of such termination, and in the event of a Change in Control
under Section 5.9 hereof, a Participant’s Cash Incentive Awards will vest in
full on the applicable Payout Date.

     5.3 Award Matrix. The Performance Goals and payout amounts applicable to
the initial Performance Period are based on the average EPS CAGR and ROE over
the Performance Period, as set forth in the Award Matrix attached hereto as
Exhibit A. The Committee may establish different Award Matrices for future
Performance Periods. Pursuant to Section 4.3 of the Plan, the Committee shall
establish Performance Goals and the applicable Award Matrix not later than 90
days after the beginning

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of the Performance Period for which such Performance
Goals relate (but in no event after 25% of the Performance Period has elapsed).

     5.4 Determination of Performance Results. As soon as reasonably possible
after the close of the fiscal year marking the end of a Performance Period, the
Committee will determine and certify in writing the degree to which the
Performance Goals have been attained. The Committee shall have the sole
authority to determine to what the extent the Performance Goals have been
attained. Any payment of a Cash Incentive Award shall be conditioned on the
written certification of the Committee in each case that the Performance Goals
and any other material conditions were satisfied. In determining whether the
Performance Goals have been met, the Committee may in its discretion adjust the
financial results for a Performance Period to exclude the effect of unusual
charges or income items or other events (including, without limitation,
acquisitions or divestitures), which are distortive of financial results for
the Performance Period; provided, however, that with respect to Covered
Employees, measurement of the Company’s performance against the Performance
Goals established by the Committee shall be objectively determinable and, to
the extent they are expressed in standard accounting terms, shall be determined
according to generally accepted accounting principles as in existence on the
date on which the Performance Goals are established and without regard to any
changes in such principles after such date. No adjustment will be made with
respect to a Covered Employee if the Committee determines that such adjustment
will cause a Cash Incentive Award to such Covered Employee to fail to qualify
as performance-based compensation under Code Section 162(m).

     5.5 Payout of Awards. Cash Incentive Awards will be paid in cash on the
relevant Payout Date in an amount equal to the product obtained by multiplying
(a) the Target Units for the Performance Period, as determined in Section 5.1
hereof, by (b) the applicable multiple set forth in the Award Matrix for the
Performance Period, by (c) the Fair Market Value per share of Stock as of the
last day the fiscal year marking the end of the Performance Period. Except as
provided in Section 7.1 hereof, dividends paid on Company common stock during
the Performance Period will not be considered in calculating such payout
amount. The Committee may, in its discretion, reduce the cash payout amount of
a Cash Incentive Award otherwise payable to one or more Participants under the
Program, notwithstanding the achievement of a Performance Goal. In the event
that the minimum Performance Goals for a Performance Period are not met, such
that the conditions for the threshold payout set forth in the relevant Award
Matrix are not satisfied, the Cash Incentive Awards relating to such
Performance Period shall have no value and, at the end of such Performance
Period, shall lapse and be of no further effect.

     5.6 Payout Deferrals. Unless otherwise determined by the Committee, a
Participant who is eligible to participate in a deferred compensation plan
maintained by the Company may elect to defer receipt of the payout of his or
her Cash Incentive Award, if any, with respect to such Performance Period
subject to the terms and conditions of such deferred compensation plan. Any
amount so deferred will be governed by the terms of the applicable deferred
compensation plan.

     5.7 Payout Limit. In no event shall any Participant receive a cash payout
for a Cash Incentive Award which exceeds the annual limit provided in Section
4.2 of the Plan, as it may be amended from time to time. As of the Effective
Date of the Program, this limit is equal to $2 million for each year of the
relevant Performance Period. Subject to Code section 162(m), if the payout of
a Cash Incentive Award is deferred by the Participant pursuant to Section 5.6
hereof, any additional amounts attributable to earnings during the deferral
period shall be disregarded for purposes of applying this annual cash limit.

     5.8 Termination of Employment. If a Participant ceases being an employee
of the Company or any Subsidiary for any reason other than death, Disability,
or Retirement, then his or her participation in the Program shall automatically
be terminated and the Participant will forfeit any right to

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any unvested Cash
Incentive Awards. A Participant’s transfer of employment from the Company to
one of its Subsidiaries, from a Subsidiary to the Company, or from one
Subsidiary to another Subsidiary shall not constitute a termination of
employment for purposes of the Program. In the event of a Participant’s
termination of employment by reason of death, Disability or Retirement, his or
her outstanding Cash Incentive Awards will vest in full, and the Company will
within ten (10) days following such termination effect a payout of the
Participant’s then-outstanding Cash Incentive Awards equal to the aggregate
number of Target Units subject to such Cash Incentive Awards multiplied by the
Fair Market Value per share of Stock on the date of such termination. Amounts
paid on behalf of a deceased Participant will be paid to the Participant’s
Beneficiary.

     5.8 Change in Control. Notwithstanding any provision to the contrary
herein or in the Plan, in the event of a Change in Control, each Participant’s
Cash Incentive Awards shall vest in full upon the Payout Date, at which time
the Company or its successor shall effect a payout of the Participant’s
then-outstanding Cash Incentive Awards equal to the aggregate number of Target
Units subject to such Cash Incentive Awards multiplied by 125% of the Fair
Market Value per share of Stock on the Payout Date.

ARTICLE 6

AMENDMENT, MODIFICATION AND TERMINATION

     6.1. Amendment, Modification and Termination. The Committee may, at any
time and from time to time, amend, modify or terminate the Program. The
Committee may condition any amendment or modification on the approval of
shareholders of the Company if such approval is necessary or deemed advisable
with respect to applicable laws, policies or regulations.

     6.2 Termination After or During the Performance Period. Termination of
the Program after a Performance Period but before the payout of the relevant
Cash Incentive Award is made will not reduce a Participant’s rights to receive
the payout of his or her Cash Incentive Award for the Performance Period.
Termination or amendment of the Program during a Performance Period may be
retroactive to the beginning of the Performance Period, at the discretion of
the Committee. If any amendment or termination occurs during a Performance
Period, the Committee, in its sole discretion, shall determine when and to what
extent Cash Incentive Awards shall be paid for the portion of the Performance
Period preceding the amendment or termination.

ARTICLE 7

CHANGES IN CAPITAL STRUCTURE

     7.1. Adjustments. If, during a Performance Period, the Company’s
corporate structure or capitalization should be materially altered by virtue of
a reorganization, recapitalization, stock split, stock dividend, combination of
shares, rights offer, liquidation, dissolution, merger, consolidation, spin-off
or sale of assets, or any other change in or affecting the corporate structure
or capitalization of the Company, which does not constitute a Change in
Control, the Committee may redefine any Award Matrix or adjust any Performance
Period, to reflect the impact of such change. The nature of any such
adjustment shall be to protect the purpose and integrity of the Program,
reducing the potential for windfall gains or losses for Participants.

ARTICLE 8

GENERAL PROVISIONS

     8.1. Nonassignability. Participant rights under the Program may not be
transferred, assigned, pledged or encumbered, without the express prior consent
of the Committee.

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     8.2. No Right to Participate. No officer or employee shall have any right
to be selected to participate in the Program.

     8.3. No Right to Employment. Nothing in the Program shall interfere with
or limit in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment at any time, nor confer upon any Participant any right
to continue in the employ of the Company or any Subsidiary or at any particular
position or rate of compensation.

     8.4. Withholding. In accordance with Section 5.4 of the Plan, the Company
or any Subsidiary shall have the authority and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes (including the Participant’s FICA
obligation) required by law to be withheld with respect to any taxable event
arising as a result of Cash Incentive Awards granted under the Program.

     8.5. Unfunded Status of Awards. The Program is intended to be an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to the Program, nothing
contained in the Program shall give the Participant any rights that are greater
than those of a general creditor of the Company or any Subsidiary.

     8.6. Expenses. The expenses of administering the Program shall be borne
by the Company and its Subsidiaries.

     8.7. Titles and Headings. The titles and headings of the Sections in the
Program are for convenience of reference only, and in the event of any
conflict, the text of the Program, rather than such titles or headings, shall
control.

     8.8. Governing Law. The Program shall be construed in accordance with and
governed by the laws of the State of Delaware, without regarding to the
conflict of law provisions in any jurisdiction.

     8.9 Severability. If any provision of this Program is held to be illegal,
invalid, or unenforceable under present or future laws effective during the
term hereof, the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision. Furthermore, in lieu of such illegal or unenforceable provision,
there shall be added automatically as a part of this Program a provision as
similar in terms to such illegal, invalid, or unenforceable provision as may be
possible and still be legal, valid and enforceable.

     8.10 Plan Controls. This Program is adopted pursuant to and shall be
governed by and construed in accordance with the Plan. In the event of any
actual or alleged conflict between the provisions of the Plan and the
provisions of this Program, the provisions of the Plan shall be controlling and
determinative.

     The foregoing is hereby acknowledged as being the IndyMac Bancorp, Inc.
Cash Incentive Award Program as adopted by the Committee on March 1, 2004.

	 	 	 
	

	 	INDYMAC BANCORP, INC.
	 
	 

	 	By:
	

	 	
 

	 
	

	 	Name:
	

	 	
 

	 
	

	 	Title:
	

	 	
 

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EXHIBIT A

AWARD MATRIX

For the three-year Performance Period for fiscal years 2004-2006

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EXHIBIT B

TARGET UNITS

For the three-year Performance Period for fiscal years 2004-2006

	 	 	 
	
	 	 
	Participant	 	Target Units
	
	 	 
	 
	
	 	 
	 
	
	 	 
	 
	
	 	 
	 
	
	 	 
	 
	
	 	 

Note: Unless otherwise determined by the Committee, the number of each
Participant’s Target Units for the 2004-2006 Performance Period is intended to
be that number of shares of Stock having a Fair Market Value on the grant date
equal to 50% of the annual cash bonus earned by such Participant for
performance in 2003 (but not less than 25% of, or greater than 75% of, the
Participant’s target bonus for 2003).

-2-

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