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Registrant’s telephone number, including area code: (800) 669-2300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
2006 Incentive Compensation Plans for Executive Officers
On May 23, 2006, the Management Development and Compensation Committee of the Board of
Directors of IndyMac Bancorp, Inc. (“Indymac”) approved the
parameters for the 2006 cash incentive
compensation awards (bonus awards) for five of its executive
officers.
Each of the executive officers noted below will receive multiple
incentive compensation awards — one for each of the
first two quarters of 2006 and one for the second half of 2006. Each
of these awards is made pursuant to the terms of the executive’s employment agreement and is issued
under the IndyMac Bancorp, Inc. 2002 Incentive Plan, as amended and restated. The following table
sets forth the aggregate estimated and maximum bonus amounts payable
under the combined incentive compensation awards for these executive
officers.
2006
Bonus Awards for Certain Executive Officers
Estimated
Maximum
Aggregate
Aggregate
Name
Title
Bonus
Bonus
Richard Wohl
President of Indymac Bank
$
737,000
$
911,250
S. Blair Abernathy
Executive Vice
President, Chief Investment
Officer of Indymac
$
604,000
$
1,000,000
Frank Sillman
Executive Vice President
of Indymac Bank and Chief
Executive Officer of the
Mortgage Bank
$
690,000
$
1,040,000
Jim Mahoney
Executive Vice President
of Indymac Bank and Chief
Executive Officer of Financial
Freedom Senior Funding
Corporation
$
589,000
$
1,000,000
John Olinski
Executive Vice
President, Secondary Marketing
and Retained Assets of Indymac
$
493,000
$
675,000
Indymac’s
Chief Executive Officer may propose a reduction of the final value of
any of these bonuses by up to 10%. The final decision to so reduce
any bonus will be made by the Management Development and Compensation Committee. Indymac expects that the incentive
compensation award for the second half of 2006, but not the incentive
compensation awards for the first
half, will constitute performance based compensation for purposes of
Section 162(m) of the tax code.
Mr. Wohl’s incentive compensation
awards are related to Net Income and ROE for his
areas of responsibility, which include Mortgage Professional and
Consumer Lending, the Consumer
Construction, Home Equity, and Home Builder divisions, and the MSR
and Retained Assets portfolios.
Mr. Abernathy’s
incentive compensation awards are related to Net Income and ROE for
his areas of responsibility, which include Conduit Lending, and the Whole Loan and MBS portfolios.
His awards also include a component for Indymac’s rating agency
rating and broker dealer net income.
Mr. Sillman’s
incentive compensation awards are related to Net Income and ROE for his
areas of responsibility, which include Mortgage Professional Lending,
and the MSR and Retained Assets
portfolios. His awards also include a component for Indymac’s mortgage
origination market share.
Mr. Mahoney’s
incentive compensation awards are related to Net Income and ROE for
Financial Freedom Senior Funding Corporation, the reverse mortgage lending subsidiary of Indymac.
Mr. Olinski’s
incentive compensation awards are related to Net Income and ROE for his
areas of responsibility, which include Mortgage Professional and
Consumer Lending, and the MSR and Retained Assets
portfolios. His award also includes a component for Indymac’s mortgage origination market share.
Employment Agreements with Executive Officers
On May 23, 2006, Indymac Bank entered into an employment agreement with each of S. Blair
Abernathy, its Chief Investment Officer; Ashwin Adarkar, its Executive Vice President, Incubator,
M&A and Global Resources; Scott Keys, its Chief Financial Officer; John D. Olinski, its Executive
Vice President, Secondary Marketing and Retained Assets; Frank M. Sillman, its Chief Executive
Officer of the Mortgage Bank; and Charles A. Williams, its Chief Audit Executive. The employment
agreements for Messrs. Abernathy, Adarkar, Keys, Olinski, Sillman and Williams (“Executive
Officers”) provide for the following:
•
employment as an Executive Vice President of Indymac Bank
•
an annual base salary of $627,000 for Mr. Abernathy, $381,600 for Mr. Adarkar,
$490,500 for Mr. Keys, $350,000 for Mr. Olinski, $350,000 for Mr. Sillman, and
$300,000 for Mr. Williams, each subject to increase upon subsequent review by Indymac
Bank
•
annual incentive compensation in an amount determined pursuant to Indymac’s Senior
Manager Cash Incentive Plan policy
•
annual grants of equity incentive awards pursuant to Indymac’s Stock Incentive
Compensation policy.
All equity incentive awards granted under the Executive Officers’ employment agreements are
subject to the terms of the incentive plan under which they are granted and the Executive Officers’
employment agreements. The Executive Officers’ employment agreements expire December 31, 2009,
unless earlier terminated in accordance with their provisions.
The Executive Officers’ employment agreements require the Executive Officers to refrain from
soliciting customers, business, or employees of Indymac Bank and its affiliates for a period of
eighteen months after termination of employment, and to refrain from disclosing any “confidential
information” or “trade secrets,” as defined in the
employment agreements, for a period of eighteen months after termination of employment.
In the event of an Executive Officer’s termination without “Cause,” as defined in his
employment agreement, Indymac Bank will be obligated to pay the Executive Officer a severance
amount equal to the sum of (a) base salary through the last day of employment, (b) an amount equal
to the lesser of eighteen months of base salary or two times monthly base salary for the remaining
term of the agreement from the termination date, payable in equal monthly or bi-weekly installments
through the end of the calendar year in which the termination occurs, (c) incentive compensation
award for the year of termination prorated to the last day of employment, and (d) the additional
health and insurance benefits described in the employment agreement for one year following the date
of termination. In addition, in the event of such a termination, all stock options and other
equity grants which would by their terms vest within one year following the termination date would
immediately vest upon such termination.
If an Executive Officer’s employment is terminated without Cause within two years following a
“change in control” of Indymac Bank, Indymac, or certain affiliates of each, as such term is
defined in the employment agreements, Indymac Bank will be obligated to pay to the Executive
Officer (a) a single severance payment as soon as practical after the termination date equal to two
times the sum of the then-current base salary and the higher of the target annual cash incentive
compensation award as in effect on the termination date or the target annual cash incentive
compensation award at the time of the change in control, (b) annual cash incentive compensation
award for the period in which such termination occurs, prorated to the termination date and payable
in a lump sum promptly following such termination, (c) the immediate vesting of any unvested stock
options and other equity grants, and (d) the additional health and insurance benefits described in
the employment agreements for one year following the date of termination.
The Executive Officers’ benefits in the event of disability without a Change in Control would
be similar to the benefits they would receive for a termination without Cause, but generally would
be an amount less than they would receive in the event of a termination without Cause. The
Executive Officers’ benefits in the event of death without a Change in Control would be similar to
the benefits they would receive for a termination without Cause, but generally would be an amount
more than they would receive in the event of a termination without Cause. The Executive Officers’
severance payment in the event of termination for Poor Performance would depend upon position and
years of continuous service with Indymac Bank and its affiliates, but generally would be an amount
less than they would receive in the event of termination without Cause.
In the event that any of the severance payments described above are subject to federal excise
taxes under the “golden parachute” provisions of the tax code, the payments will include gross-up
for any such excise taxes plus any excise, income or payroll taxes owed on the payment of the
gross-up for the excise taxes, but only as permitted by law and only if, at such time, the
Executive Officer has more than ten years
continuous service with Indymac Bank and its affiliates or is a Section 16 Reporting Person.
A copy of the Executive Officers’ employment agreements are attached hereto as Exhibits 10.1
through 10.6.
Director Emeritus Plan
Effective May 24, 2006, the IndyMac Bancorp, Inc. Amended Director Emeritus Plan effective as
of April 27, 2004 applies to all Indymac and Indymac Bank non-employee directors, including Lyle E.
Gramley, who had previously been subject to a prior Director Emeritus Program.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.