8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (date of earliest event reported): January 25, 2008

COUNTRYWIDE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-8422
(Commission
File Number) 13-2641992
(IRS Employer
Identification No.)

4500 Park Granada, Calabasas, CA
(Address of principal executive offices) 91302
(Zip Code)

Registrant’s telephone number, including area code: (818) 225-3000

N/A
(Former name or former address, if changed since last report)

     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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     (e) On January 25, 2008, Angelo R. Mozilo, the Chairman of the Board and Chief Executive Officer of Countrywide Financial Corporation (the “Company”), entered into a letter agreement (the “Letter Agreement”) with the Company. Under the terms of the Letter Agreement, Mr. Mozilo agreed to waive certain payments and benefits that he otherwise might become entitled to receive pursuant to the terms of the Employment Agreement dated as of December 22, 2006 (the “Employment Agreement”) between Mr. Mozilo and the Company upon certain qualifying terminations of Mr. Mozilo’s employment following the merger (the “Merger”) contemplated by the Agreement and Plan of Merger dated as of January 11, 2008 among the Company, Bank of America Corporation and Red Oak Merger Corporation.

     Mr. Mozilo and the Company agreed that notwithstanding the terms of the Employment Agreement, upon termination of Mr. Mozilo’s employment by the Company without “Cause” or by Mr. Mozilo for “Good Reason” (as such terms are defined in the Employment Agreement) following the Merger, Mr. Mozilo shall not be entitled to (1) the cash severance payment under Section 6(e) of the Employment Agreement (equal to three times (a) Mr. Mozilo’s eligible base salary and (b) the greater of the average bonus and/or incentive award paid or payable for 2006 and 2007 and the bonus and/or incentive award paid for 2007) and (2) the pro-rated incentive compensation award under Section 4(b)(iii) of the Employment Agreement.

     In addition, effective upon completion of the Merger, Mr. Mozilo and the Company agreed that the Consulting Agreement deemed executed as of February 28, 2006 (the “Consulting Agreement”) between such parties shall be terminated and of no further force or effect. Accordingly, Mr. Mozilo agreed that, upon his cessation of service as an employee and member of the Company’s Board of Directors following the Merger, Mr. Mozilo will not be entitled to consulting fees totaling $400,000 per year and certain benefits and perquisites (such as use of the corporate airplane, access to office and secretarial support, financial consulting services and the payment of country club dues) contemplated by the Consulting Agreement.

     The Letter Agreement does not otherwise affect any other rights or obligations of Mr. Mozilo under the Employment Agreement or any other agreements with the Company or the Company compensation and benefit plans in which he participates. In the event the Merger is not consummated, the Letter Agreement shall become null and void.

     The foregoing description of the Letter Agreement is qualified by reference to the Letter Agreement, a copy of which is attached hereto as Exhibit 10.1.

Item 7.01 Regulation FD Disclosure.

     A press release of the Company dated January 28, 2008 announcing Mr. Mozilo’s waiver of these severance payments, post-closing consulting fees and continued perquisites following the Merger is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

Exhibit No.	Description
10.1	Letter agreement dated January 25, 2008 between Angelo R. Mozilo and Countrywide Financial Corporation
99.1	Press release of Countrywide Financial Corporation dated January 28, 2008

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SIGNATURES

     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.

	COUNTRYWIDE FINANCIAL CORPORATION
Dated: January 30, 2008	/s/ Susan E. Bow
	Name:	Susan E. Bow
	Title:	Senior Managing Director, General Counsel, Corporate and Securities and Corporate Secretary

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Letter agreement dated January 25, 2008 between Angelo R. Mozilo and Countrywide Financial Corporation
99.1	Press release of Countrywide Financial Corporation dated January 28, 2008

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EX-10.1

Exhibit 10.1

ANGELO R. MOZILO, LL.D.	4500 Park Granada
Chairman and Chief Executive Officer	Calabasas, California 91302
	(818) 225-3000

January 25, 2008

Countrywide Financial Corporation
4500 Park Granada
Calabasas, CA 91302
Attention: Sandor E. Samuels
                  Executive Managing Director and Chief Legal Officer

Dear Sandy,

     Reference is made to the transactions (the “Merger”) contemplated by that certain Agreement and Plan of Merger by and among Countrywide Financial Corporation (the “Company”), Bank of America Corporation and Red Oak Merger Corporation dated as of January 11, 2008 (the “Merger Agreement”). This letter sets forth my agreement to waive certain payments and benefits that I might otherwise become entitled to pursuant to the terms of the Employment Agreement by and between me and the Company dated as of December 22, 2006 (the “Employment Agreement”) upon certain qualifying terminations of my employment following the Merger. I hereby acknowledge and agree that, notwithstanding anything to the contrary in the Employment Agreement, upon termination of my employment by the Company without “Cause” or by me for “Good Reason” (as such terms are defined in the Employment Agreement) following the Merger, I shall in no event be entitled to, and I fully waive any right to, (i) the cash severance payment under Section 6(e) of the Employment Agreement, and (ii) the pro-rated incentive compensation award under Section 4(b)(iii) of the Employment Agreement.

     In addition, effective as of the completion of the Merger, the Company and I hereby agree that the Consulting Agreement by and between me and the Company deemed to be executed as of February 28, 2006 in accordance with Section 8 of the Employment Agreement (the “Consulting Agreement”) shall be terminated and of no further force or effect. Accordingly, I acknowledge and agree that upon my cessation of service as an employee and member of the Board of Directors of the Company following the Merger, I will not be entitled to any of the payments or benefits contemplated by the Consulting Agreement.

Sandor E. Samuels
Executive Managing Director and Chief Legal Officer
Countrywide Financial Organization
January 25, 2008
Page 2

     This letter does not otherwise affect any other rights or obligations that I may have under the Employment Agreement or any other agreements between me and the Company or the compensation and benefit plans of the Company in which I participate. In the event that the Merger is not consummated, this letter shall become null and void.

Very truly yours,

/s/ Angelo R. Mozilo

Angelo R. Mozilo

Agreed to and acknowledged
as of the 25th day of January, 2008:

By:	/s/ Sandor E. Samuels
Name:	Sandor E. Samuels
Title:	Executive Managing Director and Chief Legal Officer

EX-99.1

Exhibit 99.1

NEWS

Contact Information
For media inquiries:	For investor inquiries:
800-796-8448	Investor Relations
pressroom@countrywide.com	818-225-3550

Countrywide CEO Angelo Mozilo Announces Decision to Voluntarily Relinquish Rights to Approximately
$37.5 Million in Cash Severance Payments, Consulting Fees and Perquisites

CALABASAS, Calif., January 28, 2008 — Countrywide Financial Corporation (NYSE: CFC) Chairman and Chief Executive Officer Angelo R. Mozilo announced today that, in connection with the proposed merger between Countrywide and Bank of America, he has decided to voluntarily relinquish his rights to approximately $37.5 million in cash severance payments, post-closing consulting fees and continued perquisites, provided under his employment agreement with Countrywide and the related consulting arrangement. Mr. Mozilo will not receive any cash payments in the merger or upon any related termination of employment other than amounts that he has already earned in full, such as retirement benefits and deferred compensation. These amounts would all have become payable in the ordinary course upon his retirement regardless of the Bank of America merger. Mr. Mozilo remains a substantial stockholder and an employee of Countrywide and his common stock and employee equity awards will be treated in the merger in the same manner as those of all other shareholders and employees.

“My primary focus today — as it has been for the past 40 years — is to do what is in the best interests of Countrywide’s employees, customers and shareholders,” Mr. Mozilo said. “I believe this decision is the right thing to do as Countrywide works toward the successful completion of the merger with Bank of America.”

In recent days, there have been numerous public statements regarding Mr. Mozilo’s severance pay package, which some third parties have over-estimated to be as high as $115 million. Pursuant to his employment and consulting arrangements with Countrywide, in connection with the merger and a subsequent termination of employment, Mr. Mozilo would be entitled to $36.4 million in cash severance pay and $400,000 per year in consulting fees, as well as private airplane use and other perquisites. These are the amounts and benefits he will be forfeiting.

Countrywide Financial

Founded in 1969, Countrywide Financial Corporation (NYSE: CFC) is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. For more information about the Countrywide, visit Countrywide’s website at http://www.countrywide.com.

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