Exhibit 10.1
CAPITAL TRUST, INC.
2011 LONG-TERM INCENTIVE PLAN
As approved by the Board of Directors on
April 27, 2011, and by the Companys
stockholders on June 24, 2011.
CAPITAL TRUST, INC.
2011 LONG-TERM INCENTIVE PLAN
Plan Document
1.
Introduction
.
(a)
Purpose.
By resolution of its Board of Directors approved on April 27, 2011, Capital
Trust, Inc. (the
Company
) hereby establishes this equity-based incentive compensation
plan to be known as the Capital Trust, Inc. 2011 Long-Term Incentive Plan (the
Plan
),
for the following purposes: (i) to enhance the Companys ability to attract highly qualified
personnel; (ii) to strengthen its retention capabilities; (iii) to enhance the long-term
performance and competitiveness of the Company; and (iv) to align the interests of Plan
participants with those of the Companys stockholders. This Plan is intended to serve as the sole
source for all future equity-based awards to those eligible for Plan participation.
(b)
Effective Date.
This Plan shall become effective on the date (the
Effective
Date
) upon which it has received approval by a vote of a majority of the votes cast at a duly
held meeting of the Companys stockholders (or by such other stockholder vote that the Committee
determines to be sufficient for the issuance of Shares and Awards according to the Companys
governing documents and Applicable Law).
(c)
Definitions
. Terms in the Plan and any Appendix that begin with an initial capital letter
have the defined meaning set forth in
Appendix I
or elsewhere in this Plan, in either case unless
the context of their use clearly indicates a different meaning.
(d)
Effect on Other Plans, Awards, and Arrangements
. This Plan is not intended to affect and
shall not affect any stock options, equity-based compensation, or other benefits that the Company
or its Affiliates may have provided, or may separately provide in the future, pursuant to any
agreement, plan, or program that is independent of this Plan. Notwithstanding the foregoing,
effective upon stockholder approval of this Plan, no further awards of any kind shall occur under
the Companys 2007 Long-Term Incentive Plan, and any Shares that are currently subject to awards
under such plan but as to which Shares are not issued due to a forfeiture, cancellation, or other
settlement thereof shall be added to the reserve of Shares that are authorized and available for
issuance pursuant to this Plan.
2.
Types of Awards
. The Plan permits the granting of the following types of Awards
according to the Sections of the Plan listed below:
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Section 5
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Options
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Section 6
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Share Appreciation Rights (SARs)
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Section 7
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Restricted Shares, Restricted Share Units (RSUs), and Unrestricted Shares
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Section 8
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Deferred Share Units (DSUs)
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Section 9
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Performance and Cash-settled Awards
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Section 10
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Dividend Equivalent Rights
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3.
Shares Available for Awards
.
(a)
Generally
, Subject to Section 13 below, a total of one million (1,000,000) Shares shall be
available for issuance under the Plan. The Shares deliverable pursuant to Awards shall be
authorized but unissued Shares, or issued Shares that the Company holds in trust and are otherwise
deliverable pursuant to Awards.
(b)
Replenishment; Counting of Shares.
Any Shares reserved for Awards will again be available
for future Awards if the Shares for any reason will never be issued to a Participant or Beneficiary
pursuant to an Award (for example, due to its settlement in cash rather than in Shares, or the
Awards forfeiture, cancellation, expiration, or net settlement through the issuance of Shares).
Further, and to the extent permitted under Applicable Law, the maximum number of Shares available
for delivery under the Plan shall not be reduced by any Shares issued under the Plan through the
settlement, assumption, or substitution of outstanding awards or obligations to grant future awards
as a condition of the Companys or an Affiliates acquiring another entity. On the other hand,
Shares that a Person owns and tenders in payment of all or part of the exercise price of an Award
or in satisfaction of applicable Withholding Taxes shall not increase the number of Shares
available for future issuance under the Plan. Shares reacquired by the Company on the open market
using Option Proceeds shall be available for Awards. The increase in Shares available pursuant to
the repurchase of Shares with Option Proceeds shall not be greater than the amount of such proceeds
divided by the Fair Market Value of a Share on the date of exercise of the Option giving rise to
such Option Proceeds.
(c)
ISO Share Reserve.
The number of Shares that are available for ISO Awards shall not
exceed one million (1,000,000) Shares (as adjusted pursuant to Section 13 of the Plan, and as
determined in accordance with Code Section 422).
(d)
Vesting Limitation
. Notwithstanding any other provision of the Plan to the contrary,
Awards (other than Options and SARs)shall become vested on a pro rata basis over a period of not
less than three years (or, in the case of vesting with respect to Performance Awards, over a
period of not less than one year measured from the commencement of the period over which
performance is evaluated) following the Grant Date;
provided
, however
, that, notwithstanding the
foregoing, such Awards that result in the issuance of an aggregate of up to fifteen percent (15%)
of the Shares available pursuant to Section 3(a), as adjusted pursuant to Section 13 below, may be
granted to any one or more Eligible Persons without respect to such minimum vesting provisions.
4.
Eligibility
.
(a)
General Rule
. Subject to the express provisions of the Plan, the Committee shall
determine from the class of Eligible Persons those Persons to whom Awards may be granted. Each
Award shall be evidenced by an Award Agreement that sets forth its Grant Date and all other terms
and conditions of the Award, that is signed on behalf of the Company (or delivered by an authorized
agent through an electronic medium), and that, if required by the Committee, is signed by the
Eligible Person as an acceptance of the Award. The grant of an Award shall not obligate the
Company or any Affiliate to continue the employment or service of any Eligible Person, or to
provide any future Awards or other remuneration at any time thereafter.
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(b)
Option and SAR Limits per Person.
Within each calendar year during the term of the Plan,
no Participant may receive Awards of Options and SARs that relate to more than one hundred thousand
(100,000) Shares as such number may be adjusted pursuant to Section 13 below.
(c)
Replacement Awards
. Subject to Applicable Law (including any associated stockholder
approval requirements), the Committee may, in its sole discretion and upon such terms as it deems
appropriate, require as a condition of the grant of an Award to a Participant that the Participant,
consent to surrender for cancellation some or all of the Awards or other grants that the
Participant has received under this Plan or otherwise. An Award conditioned upon such surrender
may or may not be the same type of Award, may cover the same (or a lesser or greater) number of
Shares as such surrendered Award, may have other terms that are determined without regard to the
terms or conditions of such surrendered Award, and may contain any other terms that the Committee
deems appropriate. In the case of Options and SARs, these other terms may not involve an exercise
price that is lower than the exercise price of the surrendered Option or SAR unless either (i) the
Award is made in connection with the assumption or exchange of economically-equivalent awards in
connection with a Change in Control, or (ii) the Companys stockholders approve the grant itself or
the program under which the grant is made pursuant to the Plan.
5.
Stock Options
.
(a)
Grants.
Subject to the special rules for ISOs set forth in Section 5(b) below, the
Committee may grant Options to Eligible Persons pursuant to Award Agreements setting forth terms
and conditions that are not inconsistent with the Plan, that may be immediately exercisable or that
may become exercisable in whole or in part based on future events or conditions, that may include
vesting or other requirements for the right to exercise the Option, and that may differ for any
reason between Eligible Persons or classes of Eligible Persons,
provided
in all instances that:
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(i)
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the exercise price for Shares subject to purchase through
exercise of an Option shall not be less than 100% of the Fair Market Value of
the underlying Shares on the Grant Date (unless the Award replaces a
previously issued Option or SAR); and
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(ii)
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no Option shall be exercisable for a term ending more than
ten years after its Grant Date.
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(b)
Special ISO Provisions
. The following provisions shall control any grants of Options that
are denominated as ISOs;
provided
that ISOs may not be granted more than ten (10) years after Board
approval of the Plan.
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(i)
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Eligibility
. The Committee may grant ISOs only to
Employees (including officers who are Employees) of the Company or an
Affiliate that is a parent corporation or subsidiary corporation within
the meaning of Code Section 424.
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(ii)
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Documentation
. Each Option that is intended to be an
ISO must be designated in the Award Agreement as an ISO,
provided
that any
Option designated as an ISO will be a Non-ISO to the extent the Option fails
to meet the requirements of Code Section 422 or the provisions of this Section
5(b). In the case of an ISO, the Committee shall determine on the Grant
Date the acceptable methods of paying the exercise price for Shares, and it
shall be included in the applicable Award Agreement.
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(iii)
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$100,000 Limit
. To the extent that the aggregate
Fair Market Value of Shares with respect to which ISOs first become
exercisable by a Participant in any calendar year (under this Plan and any
other plan of the Company or any Affiliate) exceeds one hundred thousand
dollars (U.S. $100,000), such excess Options shall be treated as Non-ISOs.
For purposes of determining whether the one hundred thousand dollars (U.S.
$100,000) limit is exceeded, the Fair Market Value of the Shares subject to an
ISO shall be determined as of the Grant Date. In reducing the number of
Options treated as ISOs to meet the one hundred thousand dollars (U.S.
$100,000) limit, the most recently granted Options shall be reduced first. In
the event that Code Section 422 is amended to alter the limitation set forth
therein, the limitation of this Section 5(b)(iii) shall be automatically
adjusted accordingly.
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(iv)
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Grants to 10% Holders
. In the case of an ISO granted
to an Employee who is a Ten Percent Holder on the Grant Date, the ISOs term
shall not exceed five years from the Grant Date, and the exercise price shall
be at least 110% of the Fair Market Value of the underlying Shares on the
Grant Date. In the event that Code Section 422 is amended to alter the
limitations set forth therein, the limitation of this paragraph shall be
automatically adjusted accordingly.
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(v)
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Substitution of Options
. In the event the Company or
an Affiliate acquires (whether by purchase, merger, or otherwise) all or
substantially all of outstanding capital stock or assets of another
corporation or in the event of any reorganization or other transaction
qualifying under Code Section 424, the Committee may, in accordance with the
provisions of that Code Section, substitute ISOs for ISOs previously granted
under the plan of the acquired company provided (A) the excess of the
aggregate Fair Market Value of the Shares subject to an ISO immediately after
the substitution over the aggregate exercise price of such shares is not more
than the similar excess immediately before such substitution, and (B) the new
ISO does not give additional benefits to the Participant, including any
extension of the exercise period.
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(vi)
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Notice of Disqualifying Dispositions
. By executing
an ISO Award Agreement, each Participant agrees to notify the Company in
writing immediately after the Participant sells, transfers or otherwise
disposes of any Shares acquired through exercise of the ISO, if such
disposition occurs within the earlier of (A) two (2) years of the Grant Date,
or (B) one (1) year after the exercise of the ISO being exercised. Each
Participant further agrees to provide any information about a disposition of
Shares as may be requested by the Company to assist it in complying with any
applicable tax laws.
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(c)
Method of Exercise.
Each Option may be exercised, in whole or in part (
provided
that the
Company shall not be required to issue fractional shares) at any time and from time to time prior
to its expiration, but only pursuant to the terms of the applicable Award Agreement, and subject to
the times, circumstances and conditions for exercise contained in the applicable Award Agreement.
Exercise shall occur by delivery of both written notice of exercise to the secretary of the
Company, and payment of the full exercise price for the Shares being purchased. The methods of
payment that the Committee may in its discretion accept or commit to accept in an Award Agreement
include:
(i) cash or check payable to the Company (in U.S. dollars);
(ii) other Shares that (A) are owned by the Participant who is purchasing Shares
pursuant to an Option, (B) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which the Option is being exercised, (C) are
all, at the time of such surrender, free and clear of any and all claims, pledges, liens and
encumbrances, or any restrictions which would in any manner restrict the transfer of such
_____shares to or by the Company (other than such restrictions as may have existed prior to an
issuance of such Shares by the Company to such Participant), and (D) are duly endorsed for
transfer to the Company;
(iii) a net exercise by surrendering to the Company Shares otherwise receivable upon
exercise of the Option;
(iv) a cashless exercise program that the Committee may approve, from time to time in
its discretion, pursuant to which a Participant may elect to concurrently provide
irrevocable instructions (A) to such Participants broker or dealer to effect the immediate
sale of the purchased Shares and remit to the Company, out of the sale proceeds available on
the settlement date, sufficient funds to cover the exercise price of the Option plus all
applicable taxes required to be withheld by the Company by reason of such exercise, and (B)
to the Company to deliver the certificates for the purchased Shares directly to such broker
or dealer in order to complete the sale; or
(v) any combination of the foregoing methods of payment.
The Company shall not be required to deliver Shares pursuant to the exercise of an Option until the
Company has received sufficient funds or value to cover the full exercise price due and all
applicable Withholding Taxes required by reason of such exercise.
Notwithstanding any other provision of the Plan to the contrary, no Participant who is a
Director or an executive officer of the Company within the meaning of Section 13(k) of the
Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan,
or continue any extension of credit with respect to such payment with a loan from the Company or a
loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
(d)
Exercise of an Unvested Option
. The Committee in its sole discretion may allow a
Participant to exercise an unvested Option, in which case the Shares then issued shall be
Restricted Shares having analogous vesting restrictions to the unvested Option.
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(e)
Termination of Continuous Service
. The Committee may establish and set forth in the
applicable Award Agreement the terms and conditions on which an Option shall remain exercisable, if
at all, following termination of a Participants Continuous Service. The Committee may waive or
modify these provisions at any time. To the extent that a Participant is not entitled to exercise
an Option at the date of his or her termination of Continuous Service, or if the Participant (or
other Person entitled to exercise the Option) does not exercise the Option to the extent so
entitled within the time specified in the Award Agreement or below (as applicable), the Option
shall terminate and the Shares underlying the unexercised portion of the Option shall revert to the
Plan and become available for future Awards.
The following provisions shall apply to the extent an Award Agreement does not specify the
terms and conditions upon which an Option shall terminate when there is a termination of a
Participants Continuous Service:
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Reason for terminating Continuous Service
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Option Termination Date
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(I) By the Company for Cause, or what
would have been Cause if the Company had
known all of the relevant facts.
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Termination of the
Participants Continuous
Service, or when Cause first
existed if earlier.
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(II) Disability of the Participant.
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Within one year after
termination of the
Participants Continuous
Service.
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(III) Retirement of the Participant.
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Within six months after
termination of the
Participants Continuous
Service.
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(IV) Death of the Participant during
Continuous Service or within 90 days
thereafter.
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Within one year after
termination of the
Participants Continuous
Service.
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(V) Any other reason.
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Within 90 days after
termination of the
Participants Continuous
Service.
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If there is a blackout period under the Companys insider trading policy or Applicable Law (or
a Committee-imposed blackout period) that prohibits the buying or selling of Shares during any part
of the ten day period before the expiration of any Option based on the termination of a
Participants Continuous Service (as described above), the period for exercising the Options shall
be extended until ten days beyond when such blackout period ends. Notwithstanding any provision
hereof or within an Award Agreement, no Option shall ever be exercisable after the expiration date
of its original term as set forth in the Award Agreement.
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6.
SARs
.
(a)
Grants.
The Committee may grant SARs to Eligible Persons pursuant to Award Agreements
setting forth terms and conditions that are not inconsistent with the Plan;
provided
that:
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(i)
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the exercise price for the Shares subject to each SAR shall
not be less than one hundred percent (100%) of the Fair Market Value of the
underlying Shares on the Grant Date (unless the Award replaces a previously
issued Option or SAR);
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(ii)
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no SAR shall be exercisable for a term ending more than ten
years after its Grant Date; and
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(iii)
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each SAR shall, except to the extent a SAR Award Agreement
provides otherwise, be subject to the provisions of Section 5(e) relating to
the effect of a termination of Participants Continuous Service, Section 5(f)
relating to anti-dilution for cash dividends, and Section 5(g) relating to
buyouts, in each case with SAR being substituted for Option.
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(b)
Settlement.
Subject to the Plans terms, a SAR shall entitle the Participant, upon
exercise of the SAR, to receive Shares having a Fair Market Value on the date of exercise equal to
the product of the number of Share as to which the SAR is being exercised, and the excess of (i)
the Fair Market Value, on such date, of the Shares covered by the exercised SAR, over (ii) an
exercise price designated in the SAR Award Agreement. Notwithstanding the foregoing, a SAR Award
Agreement may limit the total settlement value that the Participant will be entitled to receive
upon the SARs exercise, and may provide for settlement either in cash or in any combination of
cash or Shares that the Committee may authorize pursuant to an Award Agreement. If, on the date on
which a SAR or portion thereof is to expire, the Fair Market Value of the underlying Shares exceeds
their aggregate exercise price of such SAR, then the SAR shall be deemed exercised and the
Participant shall within ten days thereafter receive the Shares and/or cash that would have been
issued on such date if the Participant had affirmatively exercised the SAR on that date.
(c)
SARs related to Options
. The Committee may grant SARs either concurrently with the grant
of an Option or with respect to an outstanding Option, in which case the SAR shall extend to all or
a portion of the Shares covered by the related Option, and shall have an exercise price that is not
less than the exercise price of the related Option. A SAR shall entitle the Participant who holds
the related Option, upon exercise of the SAR and surrender of the related Option, or portion
thereof, to the extent the SAR and related Option each were previously unexercised, to receive the
settlement determined pursuant to Section 6(b) above. Any SAR granted in tandem with an ISO will
contain such terms as may be required to comply with the provisions of Code Section 422.
(d)
Effect on Available Shares.
At each time of exercise of a SAR that is settled through the
delivery of Shares to the Participant, only those Shares that are issued or delivered in settlement
of the exercise shall be counted against the number of Shares available for Awards under the Plan.
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7.
Restricted Shares, RSUs, and Unrestricted Shares
.
(a)
Grant.
The Committee may grant Restricted Shares, RSUs, or Unrestricted Shares to
Eligible Persons, in all cases pursuant to Award Agreements setting forth terms and conditions that
are not inconsistent with the Plan. The Committee shall establish as to each Restricted Share or
RSU Award the number of Shares deliverable or subject to the Award (which number may be determined
by a written formula), and the period or periods of time (the
Restriction Period
) at the
end of which all or some restrictions specified in the Award Agreement shall lapse, and the
Participant shall receive unrestricted Shares (or cash to the extent provided in the Award
Agreement) in settlement of the Award. Such restrictions may include, without limitation,
restrictions concerning voting rights and transferability, and such restrictions may lapse
separately or in combination at such times and pursuant to such circumstances or based on such
criteria as selected by the Committee, including, without limitation, criteria based on the
Participants duration of employment, directorship or consultancy with the Company, individual,
group, or divisional performance criteria, Company performance, or other criteria selection by the
Committee. The Committee may make Restricted Share and RSU Awards with or without the requirement
for payment of cash or other consideration. In addition, the Committee may grant Awards hereunder
in the form of Unrestricted Shares which shall vest in full upon the Grant Date or such other date
as the Committee may determine or which the Committee may issue pursuant to any program under which
one or more Eligible Persons (selected by the Committee in its sole discretion) elect to pay for
such Shares or to receive Unrestricted Shares in lieu of cash bonuses that would otherwise be paid.
(b)
Vesting and Forfeiture.
Subject to Section 3(d) of the Plan, the Committee shall set
forth, in an Award Agreement granting Restricted Shares or RSUs, the terms and conditions under
which the Participants interest in the Restricted Shares or the Shares subject to RSUs will become
vested and non-forfeitable. Except as set forth in the applicable Award Agreement or as the
Committee otherwise determines, upon termination of a Participants Continuous Service for any
reason, the Participant shall forfeit his or her Restricted Shares and RSUs to the extent the
Participants interest therein has not vested on or before such termination date;
provided
that if
a Participant purchases Restricted Shares and forfeits them for any reason, the Company shall
return the purchase price to the Participant to the extent either set forth in an Award Agreement
or required by Applicable Laws.
(c)
Certificates for Restricted Shares.
Unless otherwise provided in an Award Agreement, the
Company shall hold certificates representing Restricted Shares and dividends (whether in Shares or
cash) that accrue with respect to them until the restrictions lapse, and the Participant shall
provide the Company with appropriate stock powers endorsed in blank. The Participants failure to
provide such stock powers within ten days after a written request from the Company shall entitle
the Committee to unilaterally declare a forfeiture of all or some of the Participants Restricted
Shares.
(d)
Section
83(b)
Elections
. A Participant may make an election under Code Section 83(b) (the
Section 83(b) Election
) with respect to Restricted Shares. A Participant who has
received RSUs may, within ten days after receiving the RSU Award, provide the Committee with a
written notice of his or her desire to make Section 83(b) Election with respect to the Shares
subject to such RSUs. The Committee may in its discretion convert the Participants RSUs into
Restricted Shares, on a one-for-one basis, in full satisfaction of the Participants RSU Award.
The Participant may then make a Section 83(b) Election with respect to those Restricted Shares;
provided
that the Participants Section 83(b) Election will be invalid if not filed with the
Company and the appropriate U.S. tax authorities within thirty (30) days after the Grant Date of
the RSUs that are thereafter replaced by the Restricted Shares.
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(e)
Deferral Elections for RSUs
. To the extent specifically provided in an Award Agreement
and subject to and in accordance with Section 8 below, a Participant who is a Director or a member
of a select group of management or highly compensated Employees (within the meaning of ERISA) may
irrevocably elect, in accordance with Section 8 below, to defer the receipt of all or a
percentage of the Shares that would otherwise be transferred to the Participant both more than
twelve (12) months after the date of the Participants deferral election and upon the vesting of an
RSU Award. If the Participant makes this election, the Company shall credit the Shares subject to
the election, and any associated Shares attributable to Dividend Equivalent Rights attached to the
Award, to a DSU account established pursuant to Section 8 below on the date such Shares would
otherwise have been delivered to the Participant pursuant to this Section.
(f)
Issuance of Shares upon Vesting
. As soon as practicable after vesting of a Participants
Restricted Shares (or of the right to receive Shares underlying RSUs), the Company shall deliver to
the Participant, free from vesting restrictions, one Share for each surrendered and vested
Restricted Share (or deliver one Share free of the vesting restriction for each vested RSU), unless
an Award Agreement provides otherwise and subject to Section 11 regarding Withholding Taxes. No
fractional Shares shall be distributed, and cash shall be paid in lieu thereof.
8.
DSUs
.
(a)
Elections to Defer
. The Committee may make DSU awards to Eligible Persons pursuant to
Award Agreements (regardless of whether or not there is a deferral of the Eligible Persons
compensation), and may permit select Eligible Persons who are Directors or members of a select
group of management or highly compensated Employees (within the meaning of ERISA) to irrevocably
elect, on a form provided by and acceptable to the Committee (the
Election Form
), to
forego the receipt of cash or other compensation (including the Shares deliverable pursuant to any
RSU Award) and in lieu thereof to have the Company credit to an internal Plan account a number of
DSUs having a Fair Market Value equal to the Shares and other compensation deferred. These credits
will be made at the end of each calendar quarter (or other period determined by the Committee)
during which compensation is deferred. Notwithstanding the foregoing sentence, a Participants
Election Form will be ineffective with respect to any compensation that the Participant earns
before the date on which the Election Form takes effect. For any Participant who is subject to
U.S. income taxation, the Committee shall only authorize deferral elections under this Section 8(a)
(i) pursuant to written procedures, and using written Election Forms, that satisfy the
requirements of Code Section 409A, and (ii) only by Eligible Persons who are Directors,
Consultants, or members of a select group of management or highly compensated Employees (within the
meaning of ERISA).
(b)
Vesting
. Unless an Award Agreement expressly provides otherwise, each Participant shall
be 100% vested at all times in any Shares subject to DSUs.
(c)
Issuances of Shares
. Unless an Award Agreement expressly provides otherwise, the Company
shall settle a Participants DSU Award, by delivering one Share for each DSU, in five substantially
equal annual installments that are issued before the last day of each of the five calendar years
that end after the date on which the Participants Continuous Service ends for any reason, subject
to
(i) the Participants right to elect a different form of distribution, only on a form
provided by and acceptable to the Committee, that permits the Participant to select any
combination of a lump sum and annual installments that are triggered by, and completed
within ten years following, the last day of the Participants Continuous Service, and
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(ii) the Companys acceptance of the Participants distribution election form executed
at the time the Participant elects to defer the receipt of cash or other compensation
pursuant to Section 8(a),
provided
that the Participant may change a distribution election
through any subsequent election that (A) the Participant delivers to the Company at least
one year before the date on which distributions are otherwise scheduled to commence pursuant
to the Participants initial distribution election, and (B) defers the commencement of
distributions by at least five years from the originally scheduled distribution commencement
date.
Fractional shares shall not be issued, and instead shall be paid out in cash.
(d)
Emergency Withdrawals
. In the event that a Participant suffers an unforeseeable emergency
within the contemplation of this Section 8(d), the Participant may apply to the Committee for an
immediate distribution of all or a portion of the Participants DSUs. The unforeseeable emergency
must result from a sudden and unexpected illness or accident of the Participant, the Participants
spouse, or a dependent (within the meaning of Code Section 152) of the Participant, casualty loss
of the Participants property, or other similar extraordinary and unforeseeable conditions beyond
the control of the Participant. The Committee shall, in its sole and absolute discretion,
determine whether a Participant has a qualifying unforeseeable emergency, may require independent
verification of the emergency, and may determine whether or not to provide the Participant with
cash or Shares. Examples of purposes which are not considered unforeseeable emergencies include
post-secondary school expenses or the desire to purchase a residence. In no event will a
distribution be made to the extent the unforeseeable emergency could be relieved through
reimbursement or compensation by insurance or otherwise, or by liquidation of the Participants
nonessential assets to the extent such liquidation would not itself cause a severe financial
hardship. The amount of any distribution hereunder shall be limited to the amount necessary to
relieve the Participants unforeseeable emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution. The number of Shares subject to the Participants DSU
Award shall be reduced by any Shares distributed to the Participant and by a number of Shares
having a Fair Market Value on the date of the distribution equal to any cash paid to the
Participant pursuant to this Section 8(d). For all DSUs granted to Participants who are U.S.
taxpayers, the term unforeseeable emergency shall be interpreted in accordance with Code Section
409A.
(e)
Termination of Service
. For purposes of this Section 8, a Participants Continuous
Service shall only end when the Participant incurs a separation from service within the meaning
of Treasury Regulations § 1.409A-1(h). A Participant shall be considered to have experienced a
termination of Continuous Service when the facts and circumstances indicate that either (i) no
further services will be performed for the Company or any Affiliate after a certain date, or (ii)
that the level of bona fide services the Participant will perform after such date (whether as an
Employee, Director, or Consultant) are reasonably expected to permanently decrease to no more than
fifty percent (50%) of the average level of bona fide services performed by such Participant
(whether as an Employee, Director, or Consultant) over the immediately preceding thirty-six (36)
month period (or full period of services to the Company and its Affiliates if the Participant has
been providing such services for less than thirty-six (36) months).
10
9.
Performance and Cash-Settled Awards
.
(a)
Performance Units
. Subject to the limitations set forth in paragraph (b) hereof, the
Committee may in its discretion grant Performance Awards, including Performance Units to any
Eligible Person, including Performance Units that (i) have substantially the same financial
benefits and other terms and conditions as Options, SARs, RSUs, or DSUs, but (ii) are settled only
in cash. All Awards hereunder shall be made pursuant to Award Agreements setting forth terms and
conditions that are not inconsistent with the Plan.
(b)
Performance Compensation Awards
. Subject to the limitations set forth herein, the
Committee may, at the time of grant of a Performance Award, designate its as a
Performance
Compensation Award
(payable in cash or Shares) in order that such Award constitutes,
qualified performance-based compensation under Code Section 162(m), and has terms and conditions
designed to qualify as such. With respect to each such Performance Compensation Award, the
Committee shall establish, in writing within the time required under Code Section 162(m), a
Performance Period
,
Performance Measure(s)
, and
Performance
Formula(e)
(each such term being defined below). Once established for a Performance Period,
the Performance Measure(s) and Performance Formula(e) shall not be amended or otherwise modified to
the extent such amendment or modification would cause the compensation payable pursuant to the
Award to fail to constitute qualified performance-based compensation under Code Section 162(m).
A Participant shall be eligible to receive payment in respect of a Performance Compensation
Award only to the extent that the Performance Measure(s) for such Award is achieved and the
Performance Formula(e) as applied against such Performance Measure(s) determines that all or some
portion of such Participants Award has been earned for the Performance Period. As soon as
practicable after the close of each Performance Period, the Committee shall review and certify in
writing whether, and to what extent, the Performance Measure(s) for the Performance Period have
been achieved and, if so, determine and certify in writing the amount of the Performance
Compensation Award to be paid to the Participant and, in so doing, may use negative discretion to
decrease, but not increase, the amount of the Award otherwise payable to the Participant based upon
such performance
(c)
Limitations on Awards
. The maximum Performance Compensation Award that any one
Participant may receive for any one Performance Period, without regard to time of vesting or
exercisability, shall not together exceed two hundred and fifty thousand (250,000) Shares, as
adjusted pursuant to Section 13 below (or, for Performance Units to be settled in cash, five
million dollars (U.S. $5,000,000)). The Committee shall have the discretion to provide in any
Award Agreement that any amounts earned in excess of these limitations will be credited as DSUs or
as deferred cash compensation under a separate plan of the Company (
provided
in the latter case
that such deferred compensation either bears a reasonable rate of interest or has a value based on
one or more predetermined actual investments). Any amounts for which payment to the Participant is
deferred pursuant to the preceding sentence shall be paid to the Participant in a future year or
years not earlier than, and only to the extent that, the Participant is either not receiving
compensation in excess of these limits for a Performance Period, or is not subject to the
restrictions set forth under Code Section 162(b).
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(d)
Definitions
.
(i)
Performance Formula
means, for a Performance Period, one or more
objective formulas or standards established by the Committee for purposes of
determining whether or the extent to which an Award has been earned based on the
level of performance attained or to be attained with respect to one or more
Performance Measure(s). Performance Formulae may vary from Performance Period to
Performance Period and from Participant to Participant and may be established on a
stand-alone basis, in tandem or in the alternative.
(ii)
Performance Measure
means one or more of the following selected
by the Committee to measure Company, Affiliate, and/or subsidiary, division or
business unit performance for a Performance Period, whether in absolute or relative
terms including, without limitation: terms relative to a peer group or index; basic,
diluted, or adjusted earnings per share; sales or revenue; earnings before interest,
taxes, and other adjustments (in total or on a per share basis); cash available for
distribution; basic or adjusted net income; returns on equity, assets, capital,
revenue or similar measure; level and growth of dividends; the price or increase in
price of Shares; total stockholder return; distributions received on the account of
so called carried interests or incentive management fees from any other private
equity fund or managed account managed by the Company; total assets; growth in
assets, new originations of assets, or financing of assets; equity market
capitalization; assets under management; reduction or other quantifiable goal with
respect to general and/or specific expenses; third-party equity capital under
management or raised; and mergers, acquisitions, increase in enterprise value of
Affiliates, subsidiaries, divisions or business units or sales of assets of
Affiliates, subsidiaries, divisions or business units or sales of assets. Each such
measure shall be, to the extent applicable, determined in accordance with generally
accepted accounting principles as consistently applied by the Company (or such other
standard applied by the Committee) and, if so determined by the Committee, and in
the case of a Performance Compensation Award, to the extent permitted under Code
Section 162(m), adjusted to omit the effects of extraordinary items, gain or loss on
the disposal of a business segment, unusual or infrequently occurring events and
transactions and cumulative effects of changes in accounting principles.
Performance Measures may vary from Performance Period to Performance Period and from
Participant to Participant, and may be established on a stand-alone basis, in tandem
or in the alternative.
(iii)
Performance Period
means one or more periods of time (of not
less than one fiscal year of the Company), as the Committee may designate, over
which the attainment of one or more Performance Measure(s) will be measured for the
purpose of determining a Participants rights in respect of an Award.
(e)
Deferral Elections
. At any time prior to the date that is both at least six months before
the close of a Performance Period (or shorter or longer period that the Committee selects) with
respect to a Performance Award and at which time vesting or payment is substantially uncertain to
occur, the Committee may permit a Participant who is a member of a select group of management or
highly compensated employees (within the meaning of ERISA) to irrevocably elect, on a form provided
by and acceptable to the Committee, to defer the receipt of all or a percentage of the cash or
Shares that would otherwise be transferred to the Participant upon the vesting of such Award. If
the Participant makes this election, the cash or Shares subject to the election, and any
associated interest and dividends, shall be credited to an account established pursuant to Section
8 hereof on the date such cash or Shares would otherwise have been released or issued to the
Participant pursuant to this Section.
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10.
Dividend Equivalent Rights
. The Committee may grant Dividend Equivalent Rights to any
Eligible Person, and may do either pursuant to an Award Agreement that is independent of any other
Award, or through a provision in another Award (other than an Option or SAR) that Dividend
Equivalent Rights attach to the Shares underlying the Award. For example, and without limitation,
the Committee may grant a Dividend Equivalent Right in respect of each Share subject to a
Restricted Stock Award, Restricted Stock Unit Award, Deferred Share Unit, or Performance Unit
Award.
(a)
Nature of Right
. Each Dividend Equivalent Right shall represent the right to
receive amounts based on the dividends declared on Shares as of all dividend payment dates during
the term of the Dividend Equivalent Right (as determined by the Committee). Unless otherwise
determined by the Committee, a Dividend Equivalent Right shall expire upon termination of the
Participants Continuous Service,
provided
that a Dividend Equivalent Right that is granted in as
part of another Award shall have a term and an expiration date that coincide with those of the
related Award.
(b)
Settlement
. Unless otherwise provided in an Award Agreement, Dividend Equivalent
Rights shall be paid out on the (i) on the record date for dividends if the Award occurs on a
stand-alone basis, and (ii) on the vesting or later settlement date (or other date specified in the
Award Agreement) for another Award if the Dividend Equivalent Right is granted as part of it.
Payment of all amounts determined in accordance with this Section shall be in Shares, with cash
paid in lieu of fractional Shares,
provided
that the Committee may instead provide in an Award
Agreement for cash settlement of all or part of the Dividend Equivalent Rights. For DERs settled
in Shares, only the Shares actually issued pursuant to Dividend Equivalent Rights shall count
against the Share limits set forth in Section 3 above.
(c)
Other Terms
. The Committee may impose such other terms and conditions on the
grant of a Dividend Equivalent Right as it deems appropriate in its discretion as reflected by the
terms of the Award Agreement. The Committee may establish a program under which Dividend Equivalent
Rights may be granted in conjunction with other Awards. The Committee may also authorize, for any
Participant or group of Participants, a program under which the payments with respect to Dividend
Equivalent Rights may be deferred pursuant to the terms and conditions determined under Section 8
above.
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11.
Taxes; Withholding
.
(a)
General Rule.
Participants are solely responsible and liable for the satisfaction of all
taxes and penalties that may arise in connection with Awards, and neither the Company, any
Affiliate, nor any of their employees, directors, or agents shall have any obligation to mitigate,
indemnify, or to otherwise hold any Participant harmless from any or all of such taxes. The
Companys obligation to deliver Shares (or to pay cash) to Participants pursuant to Awards is at
all times subject to their prior or coincident satisfaction of all required Withholding Taxes.
Except to the extent otherwise either provided in an Award Agreement or thereafter authorized by
the Committee, the Company or any Affiliate will satisfy required Withholding Taxes that the
Participant has not otherwise arranged to settle before the due date thereof
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(i)
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first from withholding the cash otherwise payable to the
Participant pursuant to the Award;
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(ii)
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then by withholding and cancelling the Participants rights
with respect to a number of Shares that (A) would otherwise have been
delivered to the Participant pursuant to the Award, and (B) have an aggregate
Fair Market Value equal to the Withholding Taxes (such withheld Shares to be
valued on the basis of the aggregate Fair Market Value thereof on the date of
the withholding); and
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(iii)
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finally, withholding the cash otherwise payable to the
Participant by the Company.
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The number of Shares withheld and cancelled to pay a Participants Withholding Taxes will be
rounded up to the nearest whole Share sufficient to satisfy such taxes, with cash being paid to the
Participant in an amount equal to the amount by which the Fair Market Value of such Shares exceeds
the Withholding Taxes.
(b)
U.S. Code Section 409A.
To the extent that the Committee determines that any Award
granted under the Plan is subject to Code Section 409A, the Award Agreement evidencing such Award
shall incorporate the terms and conditions required by Code Section 409A. To the extent
applicable, the Plan and Award Agreements shall be interpreted in accordance with Code Section 409A
and Department of Treasury regulations and other interpretive guidance issued thereunder, including
without limitation any such regulations or other guidance that may be issued after the Effective
Date. Notwithstanding any provision of the Plan to the contrary, the Committee may adopt such
amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take any other actions,
that the Committee determines are necessary or appropriate (i) to exempt the Award from Code
Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to
the Award, or (ii) to comply with the requirements of Code Section 409A and related Department of
Treasury guidance and thereby avoid the application of any penalty taxes under such Section.
(c)
Unfunded Tax Status.
The Plan is intended to be an unfunded plan for incentive
compensation. With respect to any payments not yet made to a Person pursuant to an Award, nothing
contained in the Plan or any Award Agreement shall give the Person any rights that are greater than
those of a general creditor of the Company or any Affiliate, and a Participants rights under the
Plan at all times constitute an unsecured claim against the general assets of the Company for the
collection of benefits as they come due. Neither the Participant nor the Participants
duly-authorized transferee or Beneficiaries shall have any claim against or rights in any specific
assets, Shares, or other funds of the Company.
14
12.
Non-Transferability of Awards
.
(a)
General.
Except as set forth in this Section 12, or as otherwise approved by the
Committee, Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent or distribution. The designation of a
death Beneficiary by a Participant will not constitute a transfer. An Award may be exercised,
during the lifetime of the holder of an Award, only by such holder, by the duly-authorized legal
representative of a holder who is Disabled, or by a transferee permitted by this Section 12.
(b)
Limited Transferability Rights.
The Committee may in its discretion provide in an Award
Agreement that an Award in the form of a Non-ISO, Share-settled SAR, Restricted Shares, or
Performance Units may be transferred, on such terms and conditions as the Committee deems
appropriate, either (i) by instrument to the Participants Immediate Family (as defined below),
(ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Award is
to be passed to the Participants designated Beneficiaries, or (iii) by gift to charitable
institutions. Any transferee of the Participants rights shall succeed and be subject to all of
the terms of the applicable Award Agreement and the Plan.
Immediate Family
means any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, domestic
partner, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive relationships.
(c)
Death
. In the event of the death of a Participant, any outstanding Awards issued to the
Participant shall automatically be transferred to the Participants Beneficiary (or, if no
Beneficiary is designated or surviving, to the person or persons to whom the Participants rights
under the Award pass by will or the laws of descent and distribution).
13.
Change in Capital Structure; Change in Control; Etc
.
(a)
Changes in Capitalization.
The Committee shall equitably adjust the number of Shares
covered by each outstanding Award, and the number of Shares that have been authorized for issuance
under the Plan but as to which no Awards have yet been granted or that have been returned to the
Plan upon cancellation, forfeiture, or expiration of an Award, as well as the exercise or other
price per Share covered by each such outstanding Award, to reflect any increase or decrease in the
number of issued Shares resulting from a stock-split, reverse stock-split, stock dividend,
combination, recapitalization or reclassification of the Shares, merger, consolidation, change in
organization form, or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company. In the event of any such transaction or event,
the Committee may provide in substitution for any or all outstanding Awards such alternative
consideration (including cash or securities of any surviving entity) as it may in good faith
determine to be equitable under the circumstances and may require in connection therewith the
surrender of all Awards so replaced. In any case, such substitution of cash or securities shall
not require the consent of any Person who is granted Awards pursuant to the Plan. Except as
expressly provided herein, or in an Award Agreement, if the Company issues for consideration shares
of stock of any class or securities convertible into shares of stock of any class, the issuance
shall not affect, and no adjustment by reason thereof shall be required to be made with respect to,
the number or price of Shares subject to any Award.
15
(b)
Dissolution or Liquidation
. In the event of the dissolution or liquidation of the Company
other than as part of a Change of Control, each Award will terminate immediately prior to the
consummation of such dissolution or liquidation, subject to the ability of the Committee to
exercise any discretion authorized in the case of a Change in Control.
(c)
Change in Control.
In the event of a Change in Control but subject to the terms of any
Award Agreements or employment-related agreements between the Company or any Affiliates and any
Participant, each outstanding Award shall be assumed or a substantially equivalent award shall be
substituted by the surviving or successor company or a parent or subsidiary of such successor
company (in each case, the
Successor Company
) upon consummation of the transaction.
Notwithstanding the foregoing, instead of having outstanding Awards be assumed or replaced with
equivalent awards by the Successor Company, the Committee may in its sole and absolute discretion
and authority, without obtaining the approval or consent of the Companys stockholders or any
Participant with respect to his or her outstanding Awards, take one or more of the following
actions (with respect to any or all of the Awards, and with discretion to differentiate between
individual Participants and Awards for any reason):
(i) accelerate the vesting of Awards so that Awards shall vest (and, to the extent
applicable, become exercisable) as to the Shares that otherwise would have been unvested and
provide that repurchase rights of the Company, if any, with respect to Shares issued
pursuant to an Award shall lapse as to the Shares subject to such repurchase right;
(ii) arrange or otherwise provide for the payment of cash or other consideration to
Participants in exchange for the satisfaction and cancellation of all or some outstanding
Awards (based on the Fair Market Value, on the date of the Change in Control, of the Award
being cancelled, based on any reasonable valuation method selected by the Committee, and
with the Committee having full discretion to cancel either all Awards or only select Awards
(such as only those that have vested on or before the Change in Control));
(iii) terminate all or some Awards upon the consummation of the transaction,
provided
that the Committee shall provide for vesting of such Awards in full as of a date immediately
prior to consummation of the Change in Control. To the extent that an Award is not
exercised, settled, or cancelled prior to consummation of a transaction in which the Award
is not being assumed or substituted, such Award shall terminate upon such consummation;
(iv) make such other modifications, adjustments or amendments to outstanding Awards or
this Plan as the Committee deems necessary or appropriate, subject however to the terms set
forth above.
Notwithstanding the above and unless otherwise provided in an Award Agreement or in any
employment-related agreement between the Company or any Affiliate and the Participant, in the event
a Participant is Involuntarily Terminated on or within 12 months (or other period set forth in an
Award Agreement) following a Change in Control, then any Award that is assumed or substituted
pursuant to this Section above shall accelerate and become fully vested (and become exercisable in
full in the case of Options and SARs), and any repurchase right applicable to any Shares underlying
the Award shall lapse in full. The acceleration of vesting and lapse of any repurchase rights
provided for in the previous sentence shall occur immediately prior to the effective date of the
Participants Involuntary Termination.
16
14.
Termination, Rescission and Recapture of Awards
.
(a) Each Award under the Plan is intended to align the Participants long-term interests with
those of the Company. Accordingly, to the extent provided in an Award Agreement, the Company may
terminate any outstanding, unexercised, unexpired, unpaid, or deferred Awards
(
Termination
), rescind any exercise, payment or delivery pursuant to the Award
(
Rescission
), or recapture any Shares (whether restricted or unrestricted) or proceeds
from the Participants sale of Shares issued pursuant to the Award (
Recapture
), if the
Participant does not comply with the conditions of subsections (b), (c), and (d) hereof
(collectively, the
Conditions
).
(b) A Participant shall not, without the Companys prior written authorization, disclose to
anyone outside the Company, or use in other than the Companys business, any proprietary or
confidential information or material, as those or other similar terms are used in any applicable
patent, confidentiality, inventions, secrecy, or other agreement between the Participant and the
Company (or policy applicable to the Participant) with regard to any such proprietary or
confidential information or material.
(c) Pursuant to any agreement between the Participant and the Company with regard to
intellectual property (including but not limited to patents, trademarks, copyrights, trade secrets,
inventions, developments, improvements, proprietary information, confidential business and
personnel information), a Participant shall promptly disclose and assign to the Company or its
designee all right, title, and interest in such intellectual property, and shall take all
reasonable steps necessary to enable the Company to secure all right, title and interest in such
intellectual property in the United States and in any foreign country.
(d) Upon exercise, payment, or delivery of cash or Shares pursuant to an Award, the
Participant shall, if requested in writing by the Company, certify on a form acceptable to the
Company that he or she is in compliance with the terms and conditions of the Plan and, if a
severance of Continuous Service has occurred for any reason, shall state the name and address of
the Participants then-current employer or any entity for which the Participant performs business
services and the Participants title, and shall identify any organization or business in which the
Participant owns a greater-than-five-percent equity interest.
(e) If the Company determines, in its sole and absolute discretion, that (i) a Participant has
violated any of the Conditions or (ii) during his or her Continuous Service, or within one year
after its termination for any reason, a Participant (x) has rendered services to or otherwise
directly or indirectly engaged in or assisted, any organization or business that, in the judgment
of the Company in its sole and absolute discretion, is or is working to become competitive with the
Company; (y) has solicited any non-administrative employee of the Company to terminate employment
with the Company; or (z) has engaged in activities which are materially prejudicial to or in
conflict with the interests of the Company, including any breaches of fiduciary duty or the duty of
loyalty, then the Company may, in its sole and absolute discretion, impose a Termination,
Rescission, and/or Recapture with respect to any or all of the Participants relevant Awards,
Shares, and the proceeds thereof.
17
(f) Within ten days after receiving notice from the Company of any such activity described in
Section 14(e) above, the Participant shall deliver to the Company the Shares acquired pursuant to
the Award, or, if Participant has sold the Shares, the gain realized, or payment received as a
result of the rescinded exercise, payment, or delivery;
provided
, that if the Participant returns
Shares that the Participant purchased pursuant to the exercise of an Option (or the gains realized
from the sale of such Common Stock), the Company shall promptly refund the exercise price, without
earnings, that the Participant paid for the Shares. Any payment by the Participant to the Company
pursuant to this Section 14 shall be made either in cash or by returning to the Company the number
of Shares that the Participant received in connection with the rescinded exercise, payment, or
delivery. It shall not be a basis for Termination, Rescission or Recapture if after termination of
a Participants Continuous Service, the Participant purchases, as an investment or otherwise, stock
or other securities of such an organization or business, so long as (i) such stock or other
securities are listed upon a recognized securities exchange or traded over-the-counter, and (ii)
such investment does not represent more than a five percent (5%) equity interest in the
organization or business.
(g) Notwithstanding the foregoing provisions of this Section 14, the Company has sole and
absolute discretion not to require Termination, Rescission and/or Recapture, and its determination
not to require Termination, Rescission and/or Recapture with respect to any particular act by a
particular Participant or Award shall not in any way reduce or eliminate the Companys authority to
require Termination, Rescission and/or Recapture with respect to any other act or Participant or
Award. Nothing in this Section 14 shall be construed to impose obligations on the Participant to
refrain from engaging in lawful competition with the Company after the termination of employment
that does not violate the Conditions, other than any obligations that are part of any separate
agreement between the Company and the Participant or that arise under Applicable Law.
(h) All administrative and discretionary authority given to the Company under this Section
shall be exercised by the most senior human resources executive of the Company or such other person
or committee (including without limitation the Committee) as the Committee may designate from time
to time.
(i) If any provision within this Section 14 is determined to be unenforceable or invalid under
any Applicable Law, such provision will be applied to the maximum extent permitted by Applicable
Law, and shall automatically be deemed amended in a manner consistent with its objectives and any
limitations required under Applicable Law. Notwithstanding the foregoing, but subject to any
contrary terms set forth in any Award Agreement, this Section 14 shall not be applicable to any
Participant from and after his or her termination of Continuous Service after a Change in Control.
15.
Recoupment of Awards
.
Unless otherwise specifically provided in an Award Agreement,
and to the extent permitted by Applicable Law, the Committee may in its sole and absolute
discretion, without obtaining the approval or consent of the Companys stockholders or of any
Participant, require that any Participant reimburse the Company for all or any portion of any
Awards granted under this Plan (
Reimbursement
), or the Committee may require the
Termination or Rescission of, or the Recapture relating to, any Award, if and to the extent
18
(a) the granting, vesting, or payment of such Award was predicated upon the achievement of
certain financial results that were subsequently the subject of a material financial restatement;
(b) in the Committees view the Participant either benefited from a calculation that later
proves to be materially inaccurate, or engaged in fraud or misconduct that caused or partially
caused the need for a material financial restatement by the Company or any Affiliate; and
(c) a lower granting, vesting, or payment of such Award would have occurred based upon the
conduct described in clause (b) of this Section 15.
In each instance, the Committee may, to the extent practicable and allowable or required under
Applicable Laws, require Reimbursement, Termination or Rescission of, or Recapture relating to, any
such Award granted to a Participant;
provided
that the Company will not seek Reimbursement,
Termination or Rescission of, or Recapture relating to, any such Awards that were paid or vested
more than three years prior to the first date of the applicable restatement period.
Notwithstanding any other provision of the Plan, all Awards shall be subject to Reimbursement,
Termination, Rescission, and/or Recapture to the extent required by Applicable Law, including but
not limited to Section 10D of the Exchange Act.
16.
Relationship to other Benefits
. No payment pursuant to the Plan shall be taken into
account in determining any benefits under any pension, retirement, savings, profit sharing, group
insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent
otherwise expressly provided in writing in such other plan or an agreement thereunder.
17.
Administration of the Plan
.
The Committee shall administer the Plan in accordance with
its terms,
provided
that the Board may act in lieu of the Committee on any matter. The Committee
shall hold meetings at such times and places as it may determine and may prescribe, amend, and
rescind such rules and regulations, and procedures for the conduct of its business as it deems
advisable. In the absence of a duly appointed Committee, the Board shall function as the Committee
for all purposes of the Plan.
(a)
Committee Composition
. The Board shall appoint the members of the Committee. If and to
the extent permitted by Applicable Law, the Committee may authorize one or more executive officers
to make Awards to Eligible Persons other than themselves. The Board may at any time appoint
additional members to the Committee, remove and replace members of the Committee with or without
Cause, and fill vacancies on the Committee however caused.
(b)
Powers of the Committee
. Subject to the provisions of the Plan, the Committee shall have
the authority, in its sole discretion:
(i) to grant Awards and to determine Eligible Persons to whom Awards shall be granted
from time to time, and the number of Shares, units, or dollars to be covered by each Award;
(ii) to determine, from time to time, the Fair Market Value of Shares;
19
(iii) to determine, and to set forth in Award Agreements, the terms and conditions of
all Awards, including any applicable exercise or purchase price, the installments
and conditions under which an Award shall become vested (which may be based on
performance), terminated, expired, cancelled, or replaced, and the circumstances for vesting
acceleration or waiver of forfeiture restrictions, and other restrictions and limitations;
(iv) to approve the forms of Award Agreements and all other documents, notices and
certificates in connection therewith which need not be identical either as to type of Award
or among Participants;
(v) to construe and interpret the terms of the Plan and any Award Agreement, to
determine the meaning of their terms, and to prescribe, amend, and rescind rules and
procedures relating to the Plan and its administration;
(vi) to the extent consistent with the purposes of the Plan and without amending the
Plan, to modify, to cancel, or to waive the Companys rights with respect to any Awards, to
adjust or to modify Award Agreements for changes in Applicable Law, and to recognize
differences in foreign law, tax policies, or customs;
(vii) to require, as a condition precedent to the grant, vesting, exercise, settlement,
and/or issuance of Shares pursuant to any Award, that a Participant agree to execute a
general release of claims (in any form that the Committee may require, in its sole
discretion, which form may include any other provisions,
e.g.
confidentiality and
restrictions on competition, that are found in general claims release agreements that the
Company utilizes or expects to utilize);
(viii) in the event that the Company establishes, for itself or using the services of a
third party, an automated system for the documentation, granting, settlement, or exercise of
Award, such as a system using an internet website or interactive voice response, to
implement paperless documentation, granting, settlement, or exercise of Awards by a
Participant may be permitted through the use of such an automated system; and
(ix) to make all interpretations and to take all other actions that the Committee may
consider necessary or advisable to administer the Plan or to effectuate its purposes.
Subject to Applicable Law and the restrictions set forth in the Plan, the Committee may
delegate administrative functions to individuals who are Directors or Employees.
(c)
Local Law Adjustments and Sub-plans.
To facilitate the making of any grant of an Award
under this Plan, the Committee may adopt rules and provide for such special terms for Awards to
Participants who are located within the United States, foreign nationals, or who are employed by
the Company or any Affiliate outside of the United States of America as the Committee may consider
necessary or appropriate to accommodate differences in local law, tax policy or custom. Without
limiting the foregoing, the Company is specifically authorized to adopt rules and procedures
regarding the conversion of local currency, taxes, withholding procedures and handling of stock
certificates which vary with the customs and requirements of particular countries. The Company may
adopt sub-plans and establish escrow accounts and trusts, and settle Awards in cash in lieu of
shares, as may be appropriate, required or applicable to particular locations and countries.
20
(d)
Action by Committee
. Unless otherwise established by the Board or in any charter of the
Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the
members present at any meeting at which a quorum is present, and acts approved in writing by all
members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each
member of the Committee is entitled to, in good faith, rely or act upon any report or other
information furnished to that member by an officer or other Employee of the Company or any
Affiliate, the Companys independent certified public accounts, or any executive compensation
Consultant or other professional retained by the Company to assist in the administration of the
Plan.
(e)
Deference to Committee Determinations
. The Committee shall have the discretion to
interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion it deems to
be appropriate in its sole discretion, and to make any findings of fact needed in the
administration of the Plan or Award Agreements. The Committees prior exercise of its
discretionary authority shall not obligate it to exercise its authority in a like fashion
thereafter. The Committees interpretation and construction of any provision of the Plan, or of
any Award or Award Agreement, and all determination the Committee makes pursuant to the Plan shall
be final, binding, and conclusive. The validity of any such interpretation, construction,
decision or finding of fact shall not be given de novo review if challenged in court, by
arbitration, or in any other forum, and shall be upheld unless clearly made in bad faith or
materially affected by fraud.
(f)
No Liability; Indemnification
. Neither the Board nor any Committee member, nor any Person
acting at the direction of the Board or the Committee, shall be liable for any act, omission,
interpretation, construction or determination made in good faith with respect to the Plan, any
Award or any Award Agreement. The Company and its Affiliates shall pay or reimburse any member of
the Committee, as well as any Director, Employee, or Consultant who in good faith takes action on
behalf of the Plan, for all expenses incurred with respect to the Plan, and to the full extent
allowable under Applicable Law shall indemnify each and every one of them for any claims,
liabilities, and costs (including reasonable attorneys fees) arising out of their good faith
performance of duties on behalf of the Plan. The Company and its Affiliates may, but shall not be
required to, obtain liability insurance for this purpose.
(g)
Expenses
.
The expenses of administering the Plan shall be borne jointly and severally by
the Company and its Affiliates.
18.
Modification of Awards and Substitution of Options
.
Within the limitations of the
Plan, the Committee may modify an Award to accelerate the rate at which an Option or SAR may be
exercised, to accelerate the vesting of any Award, to extend or renew outstanding Awards, to accept
the cancellation of outstanding Awards to the extent not previously exercised, or to make any
change that the Plan would permit for a new Award. However, except in connection with a Change in
Control or as approved by the Companys stockholders for any period during which it is subject to
the reporting requirements of the Exchange Act, the Committee may not cancel an outstanding Option
or SAR whose exercise price is greater than Fair Market Value at the time of cancellation for the
purpose of reissuing the Option or SAR to the Participant at a lower exercise price, or granting a
replacement award of a different type, or otherwise allowing for a repricing within the meaning
of applicable federal securities laws. Notwithstanding the foregoing, no modification of an
outstanding Award may materially and adversely affect a Participants rights thereunder unless
either (i) the Participant provides written consent to the modification, or (ii) before a Change in
Control, the Committee determines in good faith that the modification is not materially adverse to the
Participant.
21
19.
Plan Amendment and Termination
. The Board may amend or terminate the Plan as it shall
deem advisable;
provided
that no change shall be made that increases the total number of Shares
reserved for issuance pursuant to Awards (except pursuant to Section 13 above) unless such change
is authorized by the stockholders of the Company. A termination or amendment of the Plan shall not
materially and adversely affect a Participants vested rights under an Award previously granted to
him or her, unless the Participant consents in writing to such termination or amendment.
Notwithstanding the foregoing, the Committee may amend the Plan to comply with changes in tax or
securities laws or regulations, or in the interpretation thereof. Furthermore, neither the Company
nor the Committee shall, without stockholder approval, amend the Plan either (a) to allow for a
repricing within the meaning of federal securities laws applicable to proxy statement
disclosures, or (b) to cancel an outstanding Option whose exercise price is greater than Fair
Market Value at the time of cancellation for the purpose of reissuing the Option to the Participant
at a lower exercise price or granting a replacement award of a different type.
20.
Term of Plan
. If not sooner terminated by the Board, this Plan shall terminate at the
close of business on the date ten years after the earlier of Board approval of the Plan and its
Effective Date as determined under Section 1(b) above. No Awards shall be made under the Plan
after its termination.
21.
Governing Law
. The terms of this Plan shall be governed by the laws of the State of
New York, within the United States of America, without regard to the States conflict of laws
rules.
22.
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Laws and Regulations
.
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(a)
General Rules.
This Plan, the granting of Awards, the exercise of Options and SARs, and
the obligations of the Company hereunder (including those to pay cash or to deliver, sell or accept
the surrender of any of its Shares or other securities) shall be subject to all Applicable Law. In
the event that any Shares are not registered under any Applicable Law prior to the required
delivery of them pursuant to Awards, the Company may require, as a condition to their issuance or
delivery, that the persons to whom the Shares are to be issued or delivered make any written
representations and warranties (such as that such Shares are being acquired by the Participant for
investment for the Participants own account and not with a view to, for resale in connection with,
or with an intent of participating directly or indirectly in, any distribution of such Shares) that
the Committee may reasonably require, and the Committee may in its sole discretion include a legend
to such effect on the certificates representing any Shares issued or delivered pursuant to the
Plan.
(b)
Black-out Periods.
Notwithstanding any contrary terms within the Plan or any Award
Agreement, the Committee shall have the absolute discretion to impose a blackout period on the
exercise of any Option or SAR, as well as the settlement of any Award, with respect to any or all
Participants (including those whose Continuous Service has ended) to the extent that the Committee
determines that doing so is either desirable or required in order to comply with applicable
securities laws.
22
(c)
Severability; Blue Pencil
. In the event that any one or more of the provisions of this
Plan shall be or become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be affected thereby.
If, in the opinion of any court of competent jurisdiction such covenants are not reasonable in any
respect, such court shall have the right, power and authority to excise or modify such provision or
provisions of these covenants as to the court shall appear not reasonable and to enforce the
remainder of these covenants as so amended.
23.
No Stockholder Rights
.
Neither a Participant nor any transferee or Beneficiary
of a Participant shall have any rights as a stockholder of the Company with respect to any Shares
underlying any Award until the date of issuance of a share certificate to such Participant,
transferee, or Beneficiary for such Shares in accordance with the Companys governing instruments
and Applicable Law. Prior to the issuance of Shares or Restricted Shares pursuant to an Award, a
Participant shall not have the right to vote or to receive dividends or any other rights as a
stockholder with respect to the Shares underlying the Award (unless otherwise provided in the Award
Agreement for Restricted Shares), notwithstanding its exercise in the case of Options and SARs. No
adjustment will be made for a dividend or other right that is determined based on a record date
prior to the date the stock certificate is issued, except as otherwise specifically provided for in
this Plan or an Award Agreement.
Appendix I: Definitions
As used in the Plan, the following terms have the meanings indicated when they begin with initial
capital letters within the Plan:
Affiliate
means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such Person. For the purposes
of this definition, control, when used with respect to any Person, means the possession, direct
or indirect, of the power to direct or cause the direction of the management and policies of such
Person or the power to elect directors, whether through the ownership of voting securities, by
contract or otherwise; and the terms affiliated, controlling and controlled have meanings
correlative to the foregoing.
Applicable Law
means the legal requirements relating to the administration of
options and share-based plans under any applicable laws of the United States, any other country,
and any provincial, state, or local subdivision, any applicable stock exchange or automated
quotation system rules or regulations, as such laws, rules, regulations and requirements shall be
in place from time to time.
Award
means any award made, in writing or by an electronic medium, pursuant to the
Plan, including awards made in the form of an Option, a SAR, a Restricted Share, a RSU, an
Unrestricted Share, a DSU, a Performance Unit, or Dividend Equivalent Rights, or any combination
thereof, whether alternative or cumulative.
23
Award Agreement
means any written document setting forth the terms of an Award that
has been authorized by the Committee. The Committee shall determine the form or forms of documents
to be used, and may change them from time to time for any reason.
Beneficiary
means the person or entity designated by the Participant, in a form
approved by the Company, to exercise the Participants rights with respect to an Award or receive
payment or settlement under an Award after the Participants death.
Board
means the Board of Directors of the Company.
Cause
will have the meaning set forth in any unexpired employment agreement between
the Company and the Participant. In the absence of such an agreement, Cause will exist if the
Participant is terminated from employment or other service with the Company or an Affiliate for any
of the following reasons: (i) the Participants conviction of a felony, or of a misdemeanor
involving material acts of dishonesty or breach of fiduciary duty, (ii) the Participants willful
failure to substantially perform his or her duties and responsibilities to the Company or
deliberate violation of a material Company policy; (iii) the Participants commission of any
material act or acts of fraud, embezzlement, dishonesty, or other willful misconduct; (iv) the
Participants material unauthorized use or disclosure of any proprietary information or trade
secrets of the Company or any other party to whom the Participant owes an obligation of
nondisclosure as a result of his or her relationship with the Company; or (v) Participants willful
and material breach of any of his or her obligations under any written agreement or covenant with
the Company. The foregoing definition does not in any way limit the Companys ability to terminate
a Participants employment or consulting relationship at any time, and the term Company will be
interpreted herein to include any Affiliate or successor thereto, if appropriate. Furthermore, a
Participants Continuous Service shall be deemed to have terminated for Cause within the meaning
hereof if, at any time (whether before, on, or after termination of the Participants Continuous
Service), facts or circumstances are discovered that would have justified a termination for Cause.
Change in Control
means any of the following:
(i) Approval by the stockholders of the Company of the dissolution or liquidation of
the Company;
(ii) Approval by the stockholders of the Company and consummation of an agreement to
merge or consolidate, or otherwise reorganize, with or into one or more entities that are
not Affiliates, as a result of which less than 50% of the outstanding voting securities of
the surviving or resulting entity immediately after such transaction are, or will be,
owned, directly or indirectly, by stockholders of the Company immediately before such
transaction (assuming for purposes of such determination that there is no change in the
record ownership of the Companys securities from the record date for such approval until
such transaction and that such record owners hold no securities of the other parties to such
reorganization), but including in such determination any securities of the other parties to
such transaction held by Affiliates of the Company);
(iii) Approval by the stockholders of the Company and consummation of the sale of
substantially all of the Companys business and/or assets to a Person or entity that is not
an Affiliate of the Company;
24
(iv) Any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act
but excluding any Person described in and satisfying the conditions of Rule 13d-1(b)(1)
thereunder), other than a Person that is a stockholder of the Company on the Effective Date
or a trustee or a fiduciary holding securities under an employee benefit plan of the Company
or any of its subsidiaries or an entity owned directly or indirectly by the stockholders of
the Company in substantially the same proportion as their ownership of the stock of the
Company, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 33% of the
combined voting power of the Companys then outstanding securities entitled to then vote
generally in the election of directors of the Company other than as a result of the
acquisition of securities directly from the Company; or
(v) During any period not longer than two consecutive years, individuals who at the
beginning of such period constituted the Board cease to constitute at least a majority
thereof, unless the election, or the nomination for election by the Companys stockholders,
of each new Board member was approved by a vote of at least three-fourths of the Board
members then still in office who were Board members at the beginning of such period
(including for these purposes, new members whose election or nomination was so approved).
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
Code
means the Internal Revenue Code of 1986, as amended.
Committee
means the Compensation Committee of the Board or its successor,
provided
that the term Committee means (i) the Board when acting at any time in lieu of the Committee,
(ii) with respect to any decision involving an Award intended to satisfy the requirements of Code
Section 162(m), a committee consisting of two or more Directors of the Company who are outside
directors within the meaning of Code Section 162(m), and (iii) with respect to any decision
relating to a Reporting Person, a committee consisting solely of two or more Directors who are
disinterested within the meaning of Rule 16b-3.
Company
means Capital Trust, Inc., a Maryland corporation;
provided
that in the
event the Company reincorporates to another jurisdiction, all references to the term Company
shall refer to the Company in such new jurisdiction.
Company Stock
means Class A common stock of the Company. In the event of a change
in the capital structure of the Company affecting the Class A common stock (as provided in Section
13), the Shares resulting from such a change in the Class A common stock shall be deemed to be
Company Stock within the meaning of the Plan.
25
Consultant
means any person (other than an Employee or Director), including an
advisor, who is engaged by the Company or any Affiliate to render services and is compensated for
such services.
Continuous Service
means a Participants period of service in the absence of any
interruption or termination, as an Employee, Director, or Consultant. Continuous Service shall not
be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other
leave of absence approved by the Committee,
provided
that such leave is for a period of not more
than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from time to time; (iv)
changes in status from Director to advisory director or emeritus status; or (iv) transfers between
locations of the Company or between the Company and its Affiliates. Changes in status between
service as an Employee, Director, and a Consultant will not constitute an interruption of
Continuous Service if the individual continues to perform bona fide services for the Company. The
Committee shall have the discretion to determine whether and to what extent the vesting of any
Awards shall be tolled during any paid or unpaid leave of absence;
provided
, however, that in the
absence of such determination, vesting for all Awards shall be tolled during any such unpaid leave
(but not for a paid leave).
Deferred Share Units
or
DSUs
mean Awards pursuant to Section 8 of the
Plan.
Director
means a member of the Board, or a member of the board of directors of an
Affiliate.
Disabled
will have the meaning set forth in any unexpired employment agreement
between the Company and the Participant. In the absence of such an agreement, Disabled means (i)
for an ISO, that the Participant is disabled within the meaning of Code section 22(e)(3), and (ii)
for other Awards, a condition under which the Participant
(i) is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or
(ii) is, by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, received income replacement benefits for a period of not less than three months under an
accident or health plan covering employees of the Company.
Dividend Equivalent Rights
means Awards pursuant to Section 10 of the Plan, which
may be attached to other Awards.
Effective Date
means the date on which the Companys stockholders approves the Plan.
Eligible Person
means any Consultant, Director, or Employee and includes
non-Employees to whom an offer of employment has been or is being extended.
Employee
means any person whom the Company or any Affiliate classifies as an
employee (including an officer) for employment tax purposes, whether or not that classification is
correct. The payment by the Company of a directors fee to a Director shall not be sufficient
to constitute employment of such Director by the Company.
26
Employer
means the Company and each Subsidiary and Affiliate that employs one or
more Participants.
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Fair Market Value
means the fair market value of the Company Stock as of such date
based on the then prevailing prices of the Company Stock on the New York Stock Exchange, NASDAQ or
such other stocks exchange as the Company Stock is then listed for trading (and, if none, as
determined by the Committee in good faith based on relevant facts and circumstances).
Grant Date
means the later of (i) the date designated as the Grant Date within an
Award Agreement, and (ii) the date on which the Committee determines the key terms of an Award,
provided
that as soon as reasonably practical thereafter the Committee both notifies the Eligible
Person of the Award and enters into an Award Agreement with the Eligible Person.
Incentive Stock Option
(or
ISO
) means, an Option that qualifies for
favorable income tax treatment under Code Section 422.
Involuntary Termination
means termination of a Participants Continuous Service
under the following circumstances occurring on or after a Change in Control:
(i) termination without Cause by the Company or an Affiliate or successor thereto, as
appropriate; or
(ii) voluntary resignation by the Participant through the following actions: (1) the
Participant provides the Company with written notice of the existence of one of the events, arising
without the Participants consent, listed in clauses (A) through (C) below within thirty (30) days
of the initial existence of such event; (2) the Company fails to cure such event within thirty (30)
days following the date such notice is given; and (3) the Participant elects to voluntarily
terminate employment within the ninety (90) day period immediately following such event. The events
include: (A) a material reduction in the Participants authority, duties, and responsibilities,
provided
that a mere change in the Participants title shall not trigger an Involuntary
Termination, (B) the Participant being required to relocate his place of employment, other than a
relocation within fifty (50) miles of the Participants principal work site at the time of the
Change in Control, or (C) a material reduction in the Participants Base Salary other than any such
reduction consistent with a general reduction of pay for similarly-situated Participants.
Non-ISO
means an Option not intended to qualify as an Incentive Stock Option, as
designated in the applicable Award Agreement.
Option
means any right to buy Shares that is granted to a Participant pursuant to
Section 5 above.
27
Option Proceeds
shall mean the cash actually received by the Company for the
exercise price in connection with the exercise of Options that are exercised after the Effective
Date of the Plan, plus the maximum tax benefit that could be realized by the Company as a result of
the exercise of such Options, which tax benefit shall be determined by multiplying (i) the amount
that is deductible for Federal income tax purposes as a result of any such Option exercise
(currently, equal to the amount upon which the Participants withholding tax obligation is
calculated), times (ii) the maximum Federal corporate income tax rate for the year of exercise.
With respect to Options, to the extent that a Participant pays the exercise price and/or
withholding taxes with Shares, Option Proceeds shall not be calculated with respect to the amounts
so paid in Shares
Option
means a right to purchase Shares at a price and on terms and conditions
determined in accordance with the Plan.
Participant
means any Eligible Person who holds an outstanding Award.
Performance Awards
mean Awards granted pursuant to Section 9.
Performance Unit
means an Award granted pursuant to Section 9(a) of the Plan which
may be paid in cash, in Shares, or such combination of cash and Shares as the Committee in its sole
discretion shall determine.
Person
means any natural person, association, trust, business trust, cooperative,
corporation, general partnership, joint venture, joint-stock company, limited partnership, limited
liability company, real estate investment trust, regulatory body, governmental agency or
instrumentality, unincorporated organization or organizational entity.
Plan
means this Capital Trust, Inc. 2011 Long-Term Incentive Plan.
Recapture
,
Rescission
,
Reimbursement
have the meanings set forth
in Section 14 of the Plan.
Recoupment
has the meaning set forth in Section 15 of the Plan.
Reporting Person
means an Employee, Director, or Consultant who is subject to the
reporting requirements set forth under Rule 16b-3.
Restricted Share
means a Share of Company Stock awarded with restrictions imposed
under Section 7.
Restricted Share Unit
or
RSU
means a right granted to a Participant to
receive Shares or cash upon the lapse of restrictions imposed under Section 7.
Retirement
means a Participants termination of employment after age sixty-five
(65).
Rule 16b-3
means Rule 16b-3 promulgated under the Exchange Act, as amended from time
to time, or any successor provision.
28
Share
means a share of Common Stock of the Company, as adjusted in accordance with
Section 13 of the Plan.
SAR
or
Share Appreciation Right
means a right to receive amounts awarded
under Section 6.
Ten Percent Holder
means a person who owns (within the meaning of Code Section 422)
stock representing more than ten percent (10%) of the combined voting power of all classes of stock
of the Company.
Termination
has the meaning set forth in Section 14 of the Plan.
Unrestricted Shares
mean Shares (without restrictions) awarded to Participants
pursuant to Section 7 of the Plan.
Withholding Taxes
means the aggregate minimum amount of federal, state, local and
foreign income, payroll and other taxes that the Company and any Affiliates are required to
withhold in connection with any Award.
29