COUNTRYWIDE FINANCIAL CORPORATION
Incentive Stock Option Award Terms
The Participant specified below has been granted this Option by Countrywide Financial
, a Delaware corporation (the Company
) under the terms of the Countrywide
Financial Corporation 2006 Equity Incentive Plan
). The Option shall be subject to
the Plan as well as the following terms and conditions (the Option Terms
) and all terms and
conditions set forth on the Option Statement (the Statement
) linked electronically hereto:
Section 1. Award. In accordance with the Plan, the Company hereby grants an Option
for the number of Covered Shares set forth in Section 2 to the Participant, subject to Option
Section 2. Terms of Award. The following words and phrases relating to the grant of
the Option shall have the following meanings:
(a) The Participant is the individual recipient of the Option Award on the specified Grant
(b) The Grant Date is [ ].
(c) The number of Covered Shares shall be the number of shares of Stock awarded to the
Participant on the Grant Date as reflected in the corporate records and set forth on the Statement.
(d) The Exercise Price is $[___] per share.
Except where the context clearly implies to the contrary, any capitalized term in this award
shall have the meaning ascribed to that term under the Plan.
Section 3. Incentive Stock Option. The Option is intended to constitute an incentive
stock option as that term is used in Code section 422. To the extent that the aggregate fair
market value (determined at the time of grant) of Shares with respect to which incentive stock
options are exercisable for the first time by the Participant during any calendar year under all
plans of the Company and its Subsidiaries exceeds $100,000, the options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be treated as
nonstatutory stock options. It should be understood that there is no assurance that the Option
will, in fact, be treated as an incentive stock option.
Section 4. Vesting. Subject to the limitations of the Option Terms, each installment
of Covered Shares of the Option (Installment) shall become vested and exercisable on and after
the Vesting Date for such Installment as described in the following schedule (but only if the
Participants Termination of Service has not occurred before the Vesting Date):
||APPLICABLE TO INSTALLMENT
[___] of Covered Shares
[___] of Covered Shares
[___] of Covered Shares
(a) Notwithstanding the foregoing provisions of this Section 4, the Option shall become fully
exercisable upon the earliest of the following events to occur: (i) a Change of Control that
occurs on or before the Participants Termination of Service; or (ii) Participants Termination of
Service as a result of the Participants Death, Disability or Retirement.
(b) The Option may only be exercised on or after the Participants Termination of Service only
as to that portion of the Covered Shares for which it was exercisable immediately prior to the
Participants Termination of Service, or became exercisable on the date of the Participants
Termination of Service.
Section 5. Expiration. The Option shall not be exercisable after the Companys close
of business on the last business day that occurs prior to the Expiration Date. The Expiration
Date shall be the earliest to occur of:
(a) the date of the Participants Termination of Service due to Cause;
(b) the five-year anniversary of the Grant Date;
(c) the twelve (12) month anniversary of the Participants Termination of Service if the
Termination of Service occurs due to Death, Disability or Retirement; or
(d) the three (3) month anniversary of the Participants Termination of Service if the
Termination of Service occurs for reasons other than Death, Disability, Retirement or Cause;
provided, however, that if the Participant returns to employment with, or as a director or
consultant to, the Company, within three (3) months after the Termination of Service, such
termination shall have no effect on the Option and the Participant shall have the same number of
shares and the same vesting schedule as set forth in this Agreement.
Notwithstanding the foregoing provisions of this Section 5, in the event a Participant dies
during the periods provided for in subsections (c) or (d) above, the Option shall not expire, and
shall remain exercisable, until the one (1) year anniversary of the date of Death, but in no event
beyond the expiration date provided in subsection (b) above.
Section 6. Method of Option Exercise.
(a) Method of Exercise.
Subject to the Option Terms and the Plan, the Option may be exercised
in whole or in part by filing an exercise notice with the Secretary of the Company at its corporate
headquarters prior to the Companys close of business on the last business day that occurs prior to
the Expiration Date. The notice requirement may only be satisfied by (i) the proper use of a
specified electronic medium (phone, intranet, internet or
other), whether or not such medium is the property of, or maintained, by the Company or a
third party service provider, or (ii) any other method prescribed by the Committee; provided,
however, the Committee shall retain the right to limit or expand the method of exercise to any one
or more of the above methods with respect to any individual Participant or group or class of
Participants. Such notice shall specify the number of Covered Shares which the Participant elects
to purchase, and shall be accompanied by payment of the Exercise Price for such Covered Shares
indicated by the Participants election.
(b) Payment of Exercise Price. Payment may be by cash or, subject to limitations imposed by
applicable law, by such means as the Committee from time to time may permit, including, (i) by
tendering, either actually or by attestation, shares of Common Stock acceptable to the Committee,
valued at Fair Market Value on the date of exercise; (ii) by irrevocably authorizing a third party,
acceptable to the Committee, to sell shares of the Common Stock (or a sufficient portion of the
Shares) acquired upon exercise of the Option and to remit to the Company a sufficient portion of
the sale proceeds to pay the entire Exercise Price; (iii) by personal, certified or cashiers
check; (iv) by other property deemed acceptable by the Committee; or (v) any combination of the
above. If payment is made pursuant to clauses (i) or (ii) above, the Participants election must
be made on or prior to the date of exercise of the Option and must be irrevocable. The Option
shall not be exercisable if and to the extent the Company determines that such exercise would
violate applicable state or federal securities laws or the rules and regulations of any securities
exchange on which the Stock is traded and shall not be exercisable during any blackout period
established by the Company from time to time.
Section 7. Withholding. The exercise of the Option, and the Companys obligation to
issue shares upon exercise, is subject to withholding of all applicable taxes. At the election of
the Participant, and subject to such rules and limitations as may be established by the Committee
from time to time, such withholding obligations may be satisfied (i) through cash payment by the
Participant; or (ii) by irrevocably authorizing a third party, acceptable to the Committee, to sell
shares of the Common Stock (or a sufficient portion of the Shares) acquired upon exercise of the
Option and to remit to the Company a sufficient portion of the sale proceeds to pay any tax and
withholding resulting from such exercise; or (iii) by tendering, actually or by attestation, shares
of Common Stock acceptable to the Committee; or (iv) subject to the Committees discretion, through
the surrender of Covered Shares to which the Participant is otherwise entitled under the Plan;
provided, however, that such shares under this clause (iv) may be used to satisfy not more than the
Companys minimum statutory withholding obligation (based on minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes, that are applicable to such
supplemental taxable income).
Section 8. Transferability. No portion of this Option may be assigned, transferred,
pledged or hypothecated by the Participant in any way whether by operation of law or otherwise, and
shall not be subject to execution, attachment or similar process. Any attempt at assignment,
transfer, pledge or hypothecation, or other disposition of this Option contrary to the provisions
hereof, and the levy of any attachment or similar process upon this option, shall be null and void
and without effect. Notwithstanding the above, an Option may be assigned, transferred, pledged or
hypothecated by will or the laws of descent and distribution or pursuant to a qualified domestic
Section 9. Heirs and Successors. The Option Terms shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether
by merger, consolidation, purchase of assets or otherwise, all or substantially all of the
Companys assets and business. If any rights of the Participant or benefits distributable to the
Participant under this Agreement have not been exercised or distributed, respectively, at the time
of the Participants Death, such rights shall be exercisable by the Designated Beneficiary, and
such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions
of this Agreement and the Plan. The Designated Beneficiary shall be the beneficiary or
beneficiaries designated by the Participant in a writing filed with the Committee on the form found
in HRCentral, or such other form as the Committee may require. The designation of beneficiary form
may be amended or revoked from time to time by the Participant. If a deceased Participant fails to
designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any
rights that would have been exercisable by the Participant and any benefits distributable to the
Participant shall be exercised by or distributed to the legal representative of the estate of the
Participant. If a deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant but dies before the Designated Beneficiarys exercise of all rights under
this Agreement or before the complete distribution of benefits to the Designated Beneficiary under
this Agreement, then any rights that would have been exercisable by the Designated Beneficiary
shall be exercised by the legal representative of the estate of the Designated Beneficiary, and any
benefits distributable to the Designated Beneficiary shall be distributed to the legal
representative of the estate of the Designated Beneficiary.
Section 10. Administration. The authority to manage and control the operation and
administration of the Option Terms and the Plan shall be vested in the Committee, and the Committee
shall have all powers with respect to the Option Terms as it has with respect to the Plan. Any
interpretation of the Option Terms or the Plan by the Committee and any decision made by it with
respect to the Option Terms or the Plan are final and binding on all persons.
Section 11. Plan Governs. Notwithstanding anything in the Option Terms to the
contrary, the Option Terms shall be subject to the terms of the Plan, a copy of which may be
obtained by the Participant from the office of the Secretary of the Company; and the Option Terms
are subject to all interpretations, amendments, rules and regulations promulgated by the Committee
from time to time pursuant to the Plan. Notwithstanding anything in the Option Terms to the
contrary, in the event of any discrepancies between the corporate records and the Statement, the
corporate records shall control.
Section 12. Not An Employment Contract. The Option will not confer on the Participant
any right with respect to continuance of employment or other service with the Company, nor will it
interfere in any way with any right the Company would otherwise have to terminate or modify the
terms of such Participants employment or other service at any time.
Section 13. No Rights As Shareholder. The Participant shall not have any rights of a
shareholder with respect to the Covered Shares, until a stock certificate has been duly issued
following exercise of the Option as provided herein.
Section 14. Amendment. The Option Terms may be amended in accordance with the
provisions of the Plan, and may otherwise be amended by written agreement of the Participant and
the Company without the consent of any other person.
Section 15. Section 409A Amendment. The Committee reserves the right (including the
right to delegate such right) to unilaterally amend this Agreement without the consent of the
Participant in order to maintain an exclusion from the application of, or to maintain compliance
with, Code Section 409A. Participants acceptance of this Award constitutes acknowledgement and
consent to such rights of the Committee.
Section 16. Statement and Modifications. The Option granted to the Participant under
the Option Terms set forth in this Agreement shall be set forth on the Statement. The Participant
hereby acknowledges and agrees that the Statement may be revised from time to time by the Company
to reflect additional grants of Options, exercises of Options and any permitted modifications to
the Plan and Options granted thereunder. Unless the Participant provides written notice to the
Companys Stock Option Administrator within thirty (30) days of receipt of the Statement at the
principal office of the Company in Calabasas, California, or such other addresses as may be
communicated to the Participant, the Statement (including any revisions incorporated therein) shall
be binding on the Participant, without further notice to or acknowledgement by the Participant. If
no notice is received from the Participant within the thirty (30) day period, then the Participant
shall be deemed to have acknowledged that the Statement is binding with respect to the information
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its name and on
its behalf, all as of the Grant Date and, by clicking the Accept Button below, the Participant
acknowledges acceptance of the terms and conditions of this Agreement.
COUNTRYWIDE FINANCIAL CORPORATION
Yes, I do accept
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No, I do not accept
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