2003 Committee Charter : NDE


MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE CHARTER
APPROVAL DATE: OCTOBER 30, 2002
Table of Contents
I. Statement of Philosophy

II. Purpose

III. Delegation of Authorities

A. Board of Directors to the MD&C Committee
B. MD&C Committee to CEO

IV. Duties and Responsibilities

A. Compensation and Retention of Personnel

i. CEO Compensation
a) Short-Term Compensation
b) Long-Term Compensation

c) Employment Agreement

ii. Chairman Compensation

iii. Executive Compensation

iv. Employee Compensation

v. Equity Incentive Plans

B. Management Development and Succession Planning

C. Employee Pension and Employee Welfare Benefit Plans

D. Corporate Culture

E. Regulatory Compliance

V. Membership


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INDYMAC BANCORP, INC. MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE CHARTER

I. Statement of Philosophy

It is a Board of Directors' paramount duty to select a chief executive officer and to oversee the CEO and other senior management in the competent and ethical operation of the corporation. In addition, the corporation has a responsibility to deal with its employees in a fair and equitable manner. Therefore, it is in the best interest of the IndyMac Bancorp, Inc., and its subsidiaries (the "Company"), to attract and retain management personnel who are highly competent and are properly motivated to advance the interests of the Company, and its shareholders, its regulators, its customers and its employees. The role of the Management Development and Compensation Committee (the "MD&C Committee") in this regard is to provide strategic leadership to the Company's Board of Directors and operating management in the areas of design of compensation, benefit and development plans for the Company's personnel, with the goal of creating a framework which is competitive in the market place, attracts competent and ethical personnel, optimizes the success of the Company, while maintaining a rigor towards ethics and compliance with applicable laws and regulations.


II. Purpose

The purpose of the MD&C Committee is to establish, review and monitor the compensation philosophy and practices of the Company in order to assist the Board in the discharge of its responsibilities relating to (a) the fair and competitive compensation of the CEO and other key executives, (b) the pension and employee welfare plans of the Company, (c) the development of, and orderly succession planning related to, key personnel, and (d) the creation of a corporate environment where ethical behavior is the standard. In fulfilling these responsibilities, the MD&C Committee shall:


Review and approve the Company's compensation philosophy;
Review and approve the executive compensation programs, plans and awards;
Produce an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with applicable rules and regulations;
Review long-range planning for orderly succession of senior executives;
Review and approve general employee pension benefit plans of the Company and other benefit plans on an as-needed basis;
Provide oversight to the administration of the Company's short- and long-term incentive plans and other stock or stock-based plans; and
Review and monitor compliance with the Company's Code of Conduct, its Corporate Commitments and Beliefs, and applicable laws and regulations.


III. Delegation of Authorities

A. Board of Directors to the MD&C Committee
The Board of Directors shall delegate to the MD&C Committee the authority to perform all actions required for the completion of the MD&C Committee's responsibilities as set forth in the Purpose section of this Charter, with the express reservation of authority related to (a) the selection of a CEO, (b) the approval of the terms of an employment contract for the Chairman of Board, the CEO, the CFO and the President of the Mortgage Companying Group (including short-term and long term compensation and perquisites), and (c) such other responsibilities which the Board of Directors is not legally permitted to delegate to a committee. The MD&C Committee shall provide regular reports to the full Board of Directors advising the Board of its actions.


B. MD&C Committee To CEO

The MD&C Committee shall delegate to the CEO the authority to perform all actions related to the hiring, retention, compensation, development and succession planning of all personnel of the Company, with the express reservation of authority to the MD&C Committee and the Board related to the actions specifically identified herein.


IV. Duties and Responsibilities

The MD&C Committee's responsibility is oversight, and it recognizes that the Company's management is responsible for managing the compensation and management development programs and employee benefits plans. Additionally, the MD&C Committee recognizes that corporate management (including the Human Resources staff) have more knowledge and more detailed information about the Company than do the members of the MD&C Committee; consequently, in carrying out its oversight responsibilities the MD&C Committee is not providing any expert or special assurance as to the Company's adherence to federal and state regulations. The following functions shall be the common recurring activities of the MD&C Committee in carrying out its responsibilities. These functions are set forth as a guide with the understanding that the MD&C Committee may diverge from this guide as appropriate given the circumstances.

A. Compensation and Retention of Personnel

i. CEO Compensation
(a) Short-Term Compensation. Annually, the MD&C Committee will:

review and approve appropriate corporate goals and objectives for the next year, which are then discussed with the entire Board;
evaluate the performance of the CEO in meeting those corporate goals and objectives with input from the full Board, from time to time, but not less frequently than annually; and
review and recommend to the full Board for approval, the compensation level of the CEO based upon this evaluation.

(b) Long-Term Compensation. Annually, or more frequently if required by the terms of any employment contract between the Company and the CEO, the MD&C Committee will:

review and recommend to the full Board for approval, the long-term incentive award for the CEO;
consider the performance of the Company and relative total shareholder return;
consider the value of such awards granted to other CEOs of similarly situated companies, the financial services industry and industry in general (see benchmarking discussion above); and
consider the compensation paid, including the number of stock options granted or paid, in prior years.

(c) Employment Agreement.The MD&C Committee will negotiate the terms of the CEO's employment agreement and recommend for full Board approval the final terms of such agreement. The MD&C Committee shall review the agreement annually and recommend the terms of compensation as appropriate for full Board approval.

ii. Chairman Compensation
The MD&C will review the short-term and long-term compensation for the Chairman of the Board, (if the Chairman is separate from the CEO and a member of management) and make a recommendation to the full Board of Directors regarding the Chairman's compensation. In the event that an employment agreement is negotiated for the Chairman, the MD&C Committee will negotiate the terms of such employment agreement and shall recommend for full Board approval the proposed final terms of such agreement. The MD&C Committee shall review the terms of compensation for the Chairman annually and shall recommend terms of compensation as appropriate for full Board approval.


iii. Executive Compensation
The MD&C Committee will:

Periodically review the Company's philosophy regarding executive compensation and counsel with the CEO relative to alternative compensation approaches.

Periodically review market data to assess the Company's competitive position for the three components of executive compensation (base salary; annual incentives; and long-term incentives) by reviewing executive compensation surveys compiled by third-party consultants of similarly situated companies and others in the financial services industry and review supplemental general industry compensation information.

Administer and make recommendations to the Board regarding the adoption, amendment or rescission of incentive compensation plans and stock-related plans (the "Plans") (including specific provisions) in which the CEO and other senior executives and key employees may be participants, including:

approving option guidelines and general size of overall grants
making grants of options or stock
interpreting the Plans
modifying or canceling existing grants
designating employees eligible to participate in the long-term incentive plans
imposing limitations, restrictions and conditions upon any award as the Committee deems appropriate

Assure that total compensation paid to the Company's Executive Vice Presidents and above is reasonable.

Assure that any payments under the long-term incentive plans are in conformance with any restrictions placed thereon by the Board and shareholders.

Review and approve (as appropriate) recommendations made by the CEO for the compensation of the Company's Senior Managers, including all Executive Vice Presidents and certain Senior Vice Presidents classified as "Senior Managers."

Annually review and recommend to the full Board of Directors for approval (as appropriate) recommendations made by the CEO for the compensation of the Company's Mortgage Companying Group President, and the Company's Chief Financial Officer.

Annually issue a report on executive compensation in accordance with applicable rules and regulations of the Securities and Exchange Commission for inclusion in the Company's proxy statement.

Annually review and approve the terms of written employment contracts to be negotiated with officers or other employees including the Executive Vice President level and below.

iv. Employee Compensation

The MD&C Committee will periodically review the Company's philosophy regarding employee compensation and counsel with the CEO relative to alternative compensation approaches.

v. Equity Incentive Plans

Acting as administrator of the Company's equity incentive plans. In its administration of the plans, the MD&C Committee may, pursuant to authority delegated by the Board of Directors (1) grant stock options or stock purchase rights to individuals eligible for such grants (including grants to individuals subject to Section 16 of the Securities Exchange Act of 1934 in compliance with Rule 16b-3 promulgated thereunder), and in accordance with procedure and guidelines as may be established by the Board of Directors, and (ii) amend such stock options or stock purchase rights. The MD&C Committee shall also make recommendations to the Board of Directors with respect to amendments to the plans and changes in the number of shares reserved for issuance thereunder. The MD&C Committee may also delegate authority, subject to applicable laws, to the CEO to grant stock options or stock purchase rights to officers and employees of the Company.

B. Management Development and Succession Planning


The MD&C Committee will:


Review the Company's management resources, its executive selection and development processes, and the performance of the CEO and his direct reports.

Review long-range planning for orderly succession of senior executives including short-term contingency procedures for management succession in the event of the unexpected illnesses or departures of senior executives.

C. Employee Pension and Employee Welfare Benefit Plans


The MD&C Committee will review the performance of the fiduciaries who manage the pension and employee welfare plans as defined by the Employee Retirement Income Security Act of 1974 ("ERISA") sponsored by the Company and all subsidiaries and render appropriate reports to the Board.


D. Corporate Culture

The MD&C Committee will:


Periodically review the Company's Code of Conduct and counsel with management relative to updates or enhancements;

Review any material violations of the Company's Code of Conduct;

Periodically review the Company's Corporate Beliefs and Commitments and counsel with management relative to updates or enhancements; and

Periodically review the results of corporate-wide employee surveys and monitor how well the Company is creating a corporate culture where competent employees with a strong ethical foundation flourish.


E. Regulatory Compliance


The MD&C Committee will:

Review and monitor the Company's compensation and hiring practices in support of (i) a diverse workforce, and (i) compliance with applicable laws and regulations, including laws regarding nondiscrimination in employment and human resource practices.

The MD&C Committee may seek advice from regulatory counsel regarding compliance with applicable laws and regulations.

V. Membership


The MD&C Committee will have a minimum of three (3) directors.

All MD&C Committee members shall satisfy the independence requirements of the New York Stock Exchange and meet the definitions of (i) a "non-employee director" within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, and (ii) an "outside director" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.

Section 162(m) of IRC defines a director as an "outside director" if the director is not a current or former employee of the company and if the director does not receive significant direct or indirect compensation in any capacity other than as director. Rule 16b-3 of the Exchange Act defines a "non-employee director" as a person who: is not currently an officer of the company (or a parent or subsidiary of the company); does not receive significant direct or indirect compensation from the company for any services performed other than services as a director; and has no interest in any significant transactions or business relationships with the company.

The Board will appoint the MD&C Committee members and a Chairman annually, considering the recommendation of the Nominating and Governance Committee.

The Board may fill vacancies on the MD&C Committee, subject to such new member(s) satisfying the above requirements.

The Board may remove a MD&C Committee member from the membership of the MD&C Committee at any time with or without cause.

A majority of the MD&C Committee members will be a quorum for the transaction of business.

The action of a majority of those present at a meeting at which a quorum is present will be the action of the MD&C Committee.

Any action required to be taken at a meeting of the MD&C Committee will be deemed the action of the MD&C Committee if all of the MD&C Committee members executed, either before or after the action is taken, a written consent and the consent is filed with the Corporate Secretary.

The Chairman will report from time to time to the Board on MD&C Committee actions and on the fulfillment of the MD&C Committee's duties under its Charter.

The MD&C Committee shall have sole authority to retain and terminate any consultant of its selection to advise it with respect to carrying out its responsibilities and any related matters and shall have sole authority to approve the consultant's fees and other retention terms.

There shall be a management liaison to the MD&C Committee, appointed by the CEO.

The MD&C Committee shall appoint a member of management or a member of the MD&C Committee to act as secretary at each of its meetings and who will keep minutes of all MD&C Committee meetings, which will be distributed to all Board members. The minutes shall document the justification and approval of recommendations to the full Board on compensation of the Company's Executive Vice Presidents and above.

The MD&C Committee will meet at least two (2) times per year and at such other times as may be requested by its Chairman.

The MD&C Committee Secretary and the management liaison will prepare a preliminary agenda. The Chairman will make the final decision regarding the agenda.

The agenda and all materials to be reviewed at the meetings, including minutes of previous meetings, should be received by the MD&C Committee members as far in advance of the meeting day as practicable (which will normally be 6 days).

The MD&C Committee Secretary should coordinate all mailings to the Committee members, to the extent practicable.

The MD&C Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The MD&C Committee shall annually review its own performance.

The MD&C Committee may form and delegate authority to subcommittees when appropriate.