Exhibit 10.1

Walter Investment Management Corp.

2011 Omnibus Incentive Plan

Effective May 10, 2011

(Amended and Restated June 9, 2016)

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Contents

 

Article 1.   Establishment, Purpose and Duration      1    Article 2.  
Definitions      1    Article 3.   Administration      5    Article 4.   Shares
Subject to This Plan and Maximum Awards      7    Article 5.   Eligibility and
Participation      8    Article 6.   Stock Options      8    Article 7.   Stock
Appreciation Rights      10    Article 8.   Restricted Stock      10    Article
9.   Restricted Stock Units      11    Article 10.   Performance Shares      12
   Article 11.   Performance Units      12    Article 12.   Other Stock-Based
Awards and Cash-Based Awards      12    Article 13.   Transferability of Awards
and Shares      13    Article 14.   Performance-Based Compensation and
Compliance with Code Section 162(m)      13    Article 15.   Termination of
Employment; Termination of Directorship and Termination as a Third-Party Service
Provider      15    Article 16.   Nonemployee Director Awards      15    Article
17.   Effect of a Change in Control      15    Article 18.   Dividend
Equivalents      16    Article 19.   Beneficiary Designation      16    Article
20.   Rights of Participants      16    Article 21.   Amendment and Termination
     16    Article 22.   Tax Withholding      17    Article 23.   General
Provisions      17   

 

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Walter Investment Management Corp.

2011 Omnibus Incentive Plan

 

Article 1.  Establishment, Purpose and Duration

1.1          Establishment.  Walter Investment Management Corp., a Maryland
corporation, establishes an incentive compensation plan to be known as Walter
Investment Management Corp. 2011 Omnibus Incentive Plan, as set forth in this
document. This Plan permits the grant of Nonqualified Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Shares, Performance Units, Cash-Based Awards and Other
Stock-Based Awards. This Plan shall become effective upon the initial
shareholder approval, which occurred on May 10, 2011 (the “Effective Date”) and
shall remain in effect as provided in Section 1.3 subject to amendments and/or
restatements from time to time. This Plan was amended and restated on May 3,
2013. This Plan was further amended and restated on June 9, 2016 (the “Amendment
Date”).

1.2          Purpose of this Plan.  The purpose of the Plan is to foster and
promote the long-term financial success of the Company and materially increase
shareholder value by (a) motivating superior performance by means of
performance-related incentives, (b) encouraging and providing for the
acquisition of an ownership interest in the Company by Employees as well as
Non-Employee Directors, and (c) enabling the Company to attract and retain
qualified and competent persons to serve as members of an outstanding management
team and the Board of Directors of the Company upon whose judgment, interest,
and performance are required for the successful and sustained operations of the
Company.

1.3          Duration of this Plan.  Unless sooner terminated as provided
herein, this Plan shall terminate ten (10) years from the Effective Date. After
this Plan is terminated, no Awards may be granted but Awards previously granted
shall remain outstanding in accordance with their applicable terms and
conditions and this Plan’s terms and conditions.

 

Article 2.  Definitions

Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized.

2.1          “Amendment Date” has the meaning set forth in Section 1.1.

2.2          “Annual Award Limit” or “Annual Award Limits” have the meaning set
forth in Section 4.3.

2.3          “Award” means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted
Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based
Awards or Other Stock-Based Awards, in each case subject to the terms of this
Plan.

2.4          “Award Agreement” means either (i) a written or electronic
agreement entered into by the Company and a Participant setting forth the terms
and provisions applicable to an Award granted under this Plan, including any
amendment or modification thereof, or (ii) a written or electronic statement
issued by the Company to a Participant describing the terms and provisions of
such Award, including any amendment or modification thereof. The Committee may
provide for the use of electronic, Internet or other non-paper Award Agreements,
and the use of electronic, Internet or other non-paper means for the acceptance
thereof and actions thereunder by a Participant. The Committee shall have the
exclusive authority to determine the terms of an Award Agreement evidencing an
Award granted under this Plan. The terms of an Award Agreement need not be
uniform among all Participants or among similar types of Awards.

2.5          “Beneficial Owner” or “Beneficial Ownership” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

2.6          “Board” or “Board of Directors” means the Board of Directors of
the Company.

2.7          “Cash-Based Award” means an Award, denominated in cash, granted to
a Participant as described in Article 12.

2.8          “Cause” means, unless otherwise specified in an Award Agreement or
in an applicable employment agreement between the Company and a Participant, any
one of the following:

(a)          willful misconduct of the Participant;

 

 

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(b)          willful failure to perform the Participant’s duties;

(c)          the conviction of the Participant by a court of competent
jurisdiction of a felony or entering the plea of nolo contendere to such crime
by the Participant; or

(d)          the commission of an act of theft, fraud, dishonesty or
insubordination that is materially detrimental to the Company or any Subsidiary.

2.9          A “Change in Control” means the occurrence of one or more of the
following events:

(a)          The acquisition by any Person of Beneficial Ownership of more than
40% of either (A) the then-outstanding Shares (“Outstanding Company Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this Section 2.9(a) the following acquisitions shall not
constitute a Change in Control:

(i)          any acquisition by the Company,

(ii)         any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company,

(iii)        any entity controlled by the Company, or

(iv)        any acquisition by any entity pursuant to a transaction that
complies with Sections 2.9(c)(i), (ii) and (iii).

(b)          Individuals who, as of the Effective Date, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a Director
subsequent to the Effective Date whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of the
Directors then comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
Directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board.

(c)          Consummation of a reorganization, merger, statutory share exchange
or consolidation or similar corporate transaction involving the Company and/or
any entity controlled by the Company, or a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any entity controlled by the Company
(each, a “Business Combination”), in each case, provided, however, that, for
purposes of this Section 2.9(c) a Business Combination shall not constitute a
Change in Control if following such Business Combination:

(i)          all or substantially all of the individuals and entities that were
the Beneficial Owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 66 2/3% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be; and

(ii)          no Person (excluding any entity resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such entity resulting from such Business Combination) beneficially owns,
directly or indirectly, 25% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination; and

 

 

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(iii)         at least a majority of the members of the board of directors of
the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination.

(d)          Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

2.10        “Code” means the U.S. Internal Revenue Code of 1986, as amended from
time to time. For purposes of this Plan, references to sections of the Code
shall be deemed to include references to any applicable regulations thereunder
and any successor or similar provision.

2.11        “Commission” means the Securities and Exchange Commission.

2.12        “Committee” means the Compensation Committee of the Board or a
subcommittee thereof or any other committee designated by the Board to
administer this Plan. The members of the Committee shall be appointed from time
to time by and shall serve at the discretion of the Board. If the Committee does
not exist or cannot function for any reason, the Board may take any action under
the Plan that would otherwise be the responsibility of the Committee. The
Committee shall be constituted to comply with the requirements of Rule 16b-3
promulgated by the Securities and Exchange Commission under the United States
Securities Exchange Act of 1934, or such rule or any successor rule thereto
which is in effect from time to time, Section 162(m) of the Code and any
applicable listing or governance requirements of any securities exchange on
which the Company’s common shares are listed.

2.13        “Company” means Walter Investment Management Corp., and any
successor thereto as provided in Section 23.21.

2.14        “Covered Employee” means any Employee who is or may become a
“Covered Employee,” as defined in Code Section 162(m), and who is designated,
either as an individual Employee or class of Employees, by the Committee within
the shorter of (i) 90 days after the beginning of the Performance Period, or
(ii) 25% of the Performance Period has elapsed, as a “Covered Employee” under
this Plan for such applicable Performance Period.

2.15        “Director” means any individual who is a member of the Board of
Directors of the Company.

2.16        “Disability” means permanent and total disability as defined in Code
Section 22(e)(3). A determination of Disability may be made by a physician
selected or approved by the Committee and, in this respect, the Participant
shall submit to any reasonable examination(s) required by such physician upon
request. Notwithstanding the foregoing provisions of this paragraph, in the
event any Award is considered to be “deferred compensation” as that term is
defined under Code Section 409A, then, in lieu of the foregoing definition and
to the extent necessary to comply with the requirements of Code Section 409A,
the definition of “Disability” for purposes of such Award shall be the
definition of “disability” provided for under Code Section 409A and the
regulations or other guidance issued thereunder.

2.17        “Dividend Equivalent” means a credit, made at the discretion of the
Committee or as provided for under an Award Agreement, to the account of a
Participant in an amount equal to the dividends paid on one Share for each Share
represented by an Award held by such Participant.

2.18        “Effective Date” has the meaning set forth in Section 1.1.

2.19        “Employee” means any individual performing services for the Company
or a Subsidiary and designated as an employee of the Company or the Subsidiary
on its payroll records. An Employee shall not include any individual during any
period he or she is classified or treated by the Company or Subsidiary as an
independent contractor, a consultant or an employee of an employment, consulting
or temporary agency or any other entity other than the Company or Subsidiary,
without regard to whether such individual is subsequently determined to have
been, or is subsequently retroactively reclassified, as a common-law employee of
the Company or Subsidiary during such period. An individual shall not cease to
be an Employee in the case of (i) any leave of absence approved by the Company
or (ii) transfers between locations of the Company or between the Company or any
Subsidiaries. For purposes of Incentive Stock Options, no such leave may exceed
90 days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then three months following the
91st day of such leave, any Incentive Stock Option held by a Participant shall
cease to be treated as an Incentive Stock Option and shall be treated for tax
purposes as a Nonqualified Stock Option. Neither service as a Director nor
payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

 

 

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2.20        “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

2.21        “Extraordinary Items” means (i) extraordinary, unusual and/or
nonrecurring items of gain or loss; (ii) gains or losses on the disposition of a
business; (iii) changes in tax or accounting regulations or laws; or (iv) the
effect of a merger or acquisition, all of which must be identified in the
audited financial statements, including footnotes, or the Management Discussion
and Analysis section of the Company’s annual report.

2.22        “Fair Market Value” or “FMV” means, as applied to a specific date,
the price of a Share that is based on the opening, closing, actual, high, low or
average selling prices of a Share reported on any established stock exchange or
national market system including without limitation the New York Stock Exchange
and the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System on the applicable date, the preceding
trading day, the next succeeding trading day, or an average of trading days, as
determined by the Committee in its discretion. Unless the Committee determines
otherwise or unless otherwise specified in an Award Agreement, Fair Market Value
shall be deemed to be equal to the closing price of a Share on the most recent
date on which Shares were publicly traded. Notwithstanding the foregoing, if
Shares are not traded on any established stock exchange or national market
system, the Fair Market Value means the price of a Share as established by the
Committee acting in good faith based on a reasonable valuation method that is
consistent with the requirements of Section 409A of the Code and the regulations
thereunder.

2.23        “Full Value Award” means, individually or collectively, a grant
under this Plan of Restricted Stock, Restricted Stock Units, Performance Shares,
Performance Units settled in Shares, or Other Stock-Based Awards, in each case
subject to the terms of this plan.

2.24        “Grant Date” means the date an Award is granted to a Participant
pursuant to the Plan.

2.25        “Grant Price” means the price established at the time of grant of an
SAR pursuant to Article 7.

2.26        “Incentive Stock Option” or “ISO” means an Award granted pursuant
Article 6 that is designated as an Incentive Stock Option and that is intended
to meet the requirements of Code Section 422 or any successor provision.

2.27        “Insider” shall mean an individual who is, on the relevant date, an
officer (as defined in Rule 16a-1(f) (or any successor provision) promulgated by
the Commission under the Exchange Act) or Director of the Company, or a more
than 10% Beneficial Owner of any class of the Company’s equity securities that
is registered pursuant to Section 12 of the Exchange Act, as determined by the
Board in accordance with Section 16 of the Exchange Act.

2.28        “Nonemployee Director” means a Director who is not an Employee.

2.29        “Nonqualified Stock Option” or “NQSO” means an Award granted
pursuant to Article 6 that is not intended to meet the requirements of Code
Section 422, or that otherwise does not meet such requirements.

2.30        “Option” means an Award granted to a Participant pursuant to
Article 6, which Award may be an Incentive Stock Option or a Nonqualified
Stock Option.

2.31        “Option Price” means the price at which a Share may be purchased by
a Participant pursuant to an Option.

2.32        “Other Stock-Based Award” means an equity-based or equity-related
Award not otherwise described by the terms of this Plan that is granted pursuant
to Article 12.

2.33        “Participant” means any eligible individual as set forth in Article
5 to whom an Award is granted.

2.34        “Performance-Based Compensation” means compensation under an Award
that is intended to satisfy the requirements of Code Section 162(m) for certain
performance-based compensation paid to Covered Employees. Notwithstanding the
foregoing, nothing in this Plan shall be construed to mean that an Award that
does not satisfy the requirements for performance-based compensation under Code
Section 162(m) does not constitute performance-based compensation for other
purposes, including Code Section 409A.

 

 

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2.35        “Performance Measures” means measures, as described in Article 14,
upon which performance goals are based and that are approved by the Company’s
shareholders pursuant to this Plan in order to qualify Awards as
Performance-Based Compensation.

2.36        “Performance Period” means the period of time during which
pre-established performance goals must be met in order to determine the degree
of payout and/or vesting with respect to an Award.

2.37        “Performance Share” means an Award granted pursuant to Article 10.

2.38        “Performance Unit” means an Award granted pursuant to Article 11.

2.39        “Period of Restriction” means the period when Restricted Stock or
Restricted Stock Units are subject to a substantial risk of forfeiture (based on
the passage of time, the achievement of performance goals or upon the occurrence
of other events as determined by the Committee, in its discretion) as provided
in Articles 8 and 9.

2.40        “Person” shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a “group” as defined in Section 13(d) thereof.

2.41        “Plan” means Walter Investment Management Corp. 2011 Omnibus
Incentive Plan, as the same may be amended and/or restated from time to time.

2.42        “Prior Plan” means the 2009 Long-Term Incentive Award Plan of Walter
Investment Management Corp.

2.43        “Restricted Stock” means an Award granted pursuant to Article 8.

2.44        “Restricted Stock Unit” means an Award granted pursuant to Article
9.

2.45        “Share” means a share of common stock of the Company.

2.46        “Stock Appreciation Right” or “SAR” means an Award granted pursuant
to Article 7.

2.47        “Subsidiary” means any corporation or other entity, whether domestic
or foreign, in which the Company has or obtains, directly or indirectly, an
interest of more than 50% by reason of stock ownership or otherwise.

2.48        “Termination of Employment” means the termination of the
Participant’s employment with the Company and the Subsidiaries, regardless of
the reason for the termination of employment.

2.49        “Termination of Directorship” means the time when a Non-Employee
Director ceases to be a Non-Employee Director for any reason, including, but not
by way of limitation, a termination by resignation, failure to be elected, death
or retirement.

2.50        “Third-Party Service Provider” means any consultant, agent, advisor
or independent contractor who renders bona fide services to the Company or a
Subsidiary that (a) are not in connection with the offer and sale of the
Company’s securities in a capital raising transaction, (b) do not directly or
indirectly promote or maintain a market for the Company’s securities, and
(c) are provided by a natural person who has contracted directly with the
Company or Subsidiary to render such services.

 

Article 3.   Administration

3.1           General.  The Committee shall be responsible for administering
this Plan, subject to this Article 3 and the other provisions of this Plan. The
Committee may employ attorneys, consultants, accountants, agents and other
individuals, any of whom may be an Employee, and the Committee, the Company, and
its officers and Directors shall be entitled to rely upon the advice, opinions
or valuations of any such individuals. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the
Participants, the Company or Subsidiary, and all other interested individuals.

 

 

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3.2         Authority of the Committee.  Subject to any express limitations set
forth in the Plan, the Committee shall have full and exclusive discretionary
power and authority to take such actions as it deems necessary and advisable
with respect to the administration of the Plan including, but not limited to,
the following:

(a)        To determine from time to time which of the persons eligible under
the Plan shall be granted Awards, when and how each Award shall be granted, what
type or combination of types of Awards shall be granted, the provisions of each
Award granted (which need not be identical), including the time or times when a
person shall be permitted to receive Shares pursuant to an Award and the number
of Shares subject to an Award;

(b)        To construe and interpret the Plan and Awards granted under it, and
to establish, amend, and revoke rules and regulations for its administration.
The Committee, in the exercise of this power, may correct any defect, omission
or inconsistency in the Plan or in an Award Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective;

(c)        To accelerate the vesting of any outstanding Award or to waive any
restrictions applicable to any outstanding Award;

(d)        To approve forms of Award Agreements for use under the Plan;

(e)        To determine Fair Market Value of a Share in accordance with
Section 2.22 of the Plan;

(f)         To amend the Plan or any Award Agreement as provided in the Plan;

(g)        To adopt sub-plans and/or special provisions applicable to stock
awards regulated by the laws of a jurisdiction other than and outside of the
United States. Such sub-plans and/or special provisions may take precedence over
other provisions of the Plan, but unless otherwise superseded by the terms of
such sub-plans and/or special provisions, the provisions of the Plan shall
govern;

(h)         To authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the
Board;

(i)         To determine whether Awards will be settled in shares of common
stock, cash or in any combination thereof;

(j)         To determine whether Awards will provide for Dividend Equivalents;

(k)         To establish a program whereby Participants designated by the
Committee may reduce compensation otherwise payable in cash in exchange for
Awards under the Plan;

(l)         To authorize a program permitting eligible Participants to surrender
outstanding Awards in exchange for newly granted Awards subject to any
applicable shareholder approval requirements set forth in Section 21.1 of the
Plan;

(m)         To impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resales by a
Participant or other subsequent transfers by a Participant of any Shares,
including, without limitation, (i) restrictions under an insider trading policy
and (ii) restrictions as to the use of a specified brokerage firm for such
resales or other transfers; and

(n)        To provide, either at the time an Award is granted or by subsequent
action, that an Award shall contain as a term thereof, a right, either in tandem
with the other rights under the Award or as an alternative thereto, of the
Participant to receive, without payment to the Company, a number of Shares, cash
or a combination thereof, the amount of which is determined by reference to the
value of Shares.

 

 

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3.3         Delegation.  The Committee may delegate to one or more of its
members or to one or more officers of the Company or any Subsidiary or to one or
more agents or advisors such administrative duties or powers as it may deem
advisable, and the Committee or any individuals to whom it has delegated duties
or powers as aforesaid may employ one or more individuals to render advice with
respect to any responsibility the Committee or such individuals may have under
this Plan. To the extent permitted by applicable law, the Committee may, by
resolution, authorize one or more officers of the Company to do one or both of
the following on the same basis as can the Committee: (a) designate Employees to
be recipients of Awards; and (b) determine the size of any such Awards;
provided, however, (i) the Committee shall not delegate such responsibilities to
any such officer for Awards granted to an Employee who is considered an Insider;
(ii) the resolution providing such authorization sets forth the total number of
Awards such officer(s) may grant; and (iii) the officer(s) shall report
periodically to the Committee regarding the nature and scope of the Awards
granted pursuant to the authority delegated.

 

Article 4. Shares Subject to This Plan and Maximum Awards

4.1         Number of Shares Authorized and Available for Awards.  Subject to
adjustment as provided under the Plan, the total number of Shares that are
available for Awards under the Plan shall be equal to 10,815,000 Shares (which
is comprised of the sum of (i) 2,000,000 Shares added to the Plan on the
Amendment Date and (ii) 8,815,000 total Shares available for Awards under the
Plan as of immediately prior to the Amendment Date). Such Shares may be
authorized and unissued Shares or treasury Shares (if applicable) or any
combination of the foregoing, as may be determined from time to time by the
Board or by the Committee.

4.2         Share Usage.  The Committee shall determine the appropriate method
for determining the number of Shares available for grant under the Plan, subject
to the following:

(a)          Any Shares related to an Award granted under this Plan or Prior
Plan that terminates by expiration, forfeiture, cancellation or otherwise
without the issuance of the Shares, are settled in cash in lieu of Shares, or
are exchanged with the Committee’s permission, prior to the issuance of Shares,
for Awards not involving Shares shall be available again for grant under this
Plan.

(b)          Any Shares tendered (by either actual delivery or attestation)
(i) to pay the Option Price of an Option granted under this Plan or Prior Plan
or (ii) to satisfy tax withholding obligations associated with an Award granted
under this Plan or Prior Plan, shall be available again for grant under this
Plan.

(c)          Any Shares that were subject to an SAR granted under this Plan or
Prior Plan that were not issued upon the exercise of such SAR shall be available
again for grant under this Plan.

4.3         Annual Award Limits.  Subject to Section 4.4, the maximum number of
Shares for which Options or SARs may be granted to any Participant in any
calendar year shall be 2,000,000 Shares and the maximum number of Shares that
may be paid to any Participant in any calendar year in the form of Restricted
Stock, Restricted Stock Units, Performance Shares or Other Stock Based Awards,
in each case that are Performance-Based Compensation, shall be 2,000,000 Shares
determined as of the date of payout. The maximum aggregate amount that may be
paid to any Participant in any calendar year under an Award of Performance
Units, Cash-Based Awards or any other Award that is payable in cash, in each
case that are Performance-Based Compensation, shall be $5,000,000, determined as
of the date of payout.

4.4         Adjustments in Authorized Shares.  Adjustment in authorized Shares
available for issuance under the Plan or under an outstanding Award and
adjustments in Annual Award Limits shall be subject to the following provisions:

(a)          In the event of any corporate event or transaction (including, but
not limited to, a change in the Shares of the Company or the capitalization of
the Company), such as a merger, consolidation, reorganization, recapitalization,
separation, partial or complete liquidation, stock dividend, stock split,
reverse stock split, split up, spin-off or other distribution of stock or
property of the Company, combination of Shares, exchange of Shares, dividend in
kind or other like change in capital structure, number of outstanding Shares or
distribution (other than normal cash dividends) to shareholders of the Company,
or any similar corporate event or transaction (“Corporate Transactions”), the
Committee, in order to prevent dilution or enlargement of Participants’ rights
under this Plan, shall substitute or adjust, as applicable, the number and kind
of Shares that may be issued under this Plan or under particular forms of
Awards, the number and kind of Shares subject to outstanding Awards, the Option
Price or Grant Price applicable to outstanding Awards, the Annual Award Limits
and other value determinations applicable to outstanding Awards; provided that
the Committee, in its sole discretion, shall determine the methodology or manner
of making such substitution or adjustment.

 

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(b)          The Committee, in its sole discretion, may also make appropriate
adjustments in the terms of any Awards under this Plan to reflect or related to
such Corporate Transactions and to modify any other terms of outstanding Awards,
including modifications of performance goals and changes in the length of
Performance Periods.

(c)          The determination of the Committee as to the foregoing adjustments,
if any, shall be conclusive and binding on Participants under this Plan.

 

Article 5. Eligibility and Participation

5.1         Eligibility to Receive Awards.  Individuals eligible to participate
in this Plan include all Employees, Directors and Third-Party Service Providers.

5.2         Participation in the Plan.  Subject to the provisions of this Plan,
the Committee may, from time to time, select from all individuals eligible to
participate in the Plan, those individuals to whom Awards shall be granted and
shall determine, in its sole discretion, the nature of any and all terms
permissible by law and the amount of each Award.

 

Article 6. Stock Options

6.1         Grant of Options.  Options may be granted to Participants in such
number, and upon such terms, and at any time and from time to time as shall be
determined by the Committee, in its sole discretion. Each grant of an Option
shall be evidenced by an Award Agreement which shall specify whether the Option
is in the form of a Nonqualified Stock Option or an Incentive Stock Option.

6.2         Option Price.  The Option Price for each grant of an Option shall be
determined by the Committee in its sole discretion and shall be specified in the
Award Agreement evidencing such Option; provided, however, the Option Price must
be at least equal to 100% of the FMV of a Share as of the Option’s Grant Date,
subject to adjustment as provided for under Section 4.4.

6.3          Term of Option.  The term of an Option granted to a Participant
shall be determined by the Committee, in its sole discretion; provided, however,
no Option shall be exercisable later than the tenth anniversary date of
its grant.

6.4          Exercise of Option.  An Option shall be exercisable at such times
and be subject to such restrictions and conditions as the Committee shall in
each instance approve, which terms and restrictions need not be the same for
each grant or for each Participant.

6.5          Payment of Option Price.  An Option shall be exercised by the
delivery of a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by complying with
any alternative procedures that may be authorized by the Committee, setting
forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. A condition of the issuance of the
Shares as to which an Option shall be exercised shall be the payment of the
Option Price. The Option Price of any exercised Option shall be payable to the
Company in accordance with one of the following methods:

(a)          In cash or its equivalent;

(b)          By tendering (either by actual delivery or attestation) previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the Option Price;

(c)          By a cashless (broker-assisted) exercise;

(d)          By any combination of (a), (b) and (c); or

(e)          Any other method approved or accepted by the Committee in its sole
discretion.

Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars or Shares, as
applicable.

 

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6.6          Special Rules Regarding ISOs. Notwithstanding any provision of the
Plan to the contrary, an Option granted in the form of an ISO to a Participant
shall be subject to the following rules:

(a)          Special ISO definitions:

(i)          “Parent Corporation” shall mean as of any applicable date a
corporation in respect of the Company that is a parent corporation within the
meaning of Code Section 424(e).

(ii)          “ISO Subsidiary” shall mean as of any applicable date any
corporation in respect of the Company that is a subsidiary corporation within
the meaning of Code Section 424(f).

(iii)         A “10% Owner” is an individual who owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or its Parent Corporation or any ISO Subsidiary.

(b)          Eligible employees. An ISO may be granted solely to eligible
Employees of the Company, Parent Corporation, or ISO Subsidiary.

(c)          Specified as an ISO. An Award Agreement evidencing the grant of an
ISO shall specify that such grant is intended to be an ISO.

(d)          Option price. The Option Price of an ISO granted shall be
determined by the Committee in its sole discretion and shall be specified in the
Award Agreement; provided, however, the Option Price must be at least equal 100%
of the Fair Market Value of a Share as of the ISO’s Grant Date (in the case of
10% owners, the Option Price may not be not less than 110% of such Fair Market
Value), subject to adjustment provided for under Section 4.4.

(e)          Right to exercise. Any ISO granted to a Participant shall be
exercisable during his or her lifetime solely by such Participant.

(f)          Exercise period. The period during which a Participant may exercise
an ISO shall not exceed ten years (five years in the case of a Participant who
is a 10% owner) from the date on which the ISO was granted.

(g)          Termination of employment. In the event a Participant terminates
employment due to death or Disability, the Participant (or, in the case of
death, the person(s) to whom the Option is transferred by will or the laws of
descent and distribution) shall have the right to exercise the Participant’s ISO
award during the period specified in the applicable Award Agreement solely to
the extent the Participant had the right to exercise the ISO on the date of his
death or Disability; as applicable, provided, however, that such period may not
exceed one year from the date of such termination of employment or if shorter,
the remaining term of the ISO. In the event a Participant terminates employment
for reasons other than death or disability, the Participant shall have the right
to exercise the Participant’s ISO during the period specified in the applicable
Award Agreement solely to the extent the Participant had the right to exercise
the ISO on the date of such termination of employment; provided, however, that
such period may not exceed three months from the date of such termination of
employment or if shorter, the remaining term of the ISO.

(h)          Dollar limitation. To the extent that the aggregate Fair Market
Value of (a) the Shares with respect to which Options designated as Incentive
Stock Options plus (b) the shares of stock of the Company, Parent Corporation
and any ISO Subsidiary with respect to which other Incentive Stock Options are
exercisable for the first time by a holder of an ISO during any calendar year
under all plans of the Company and Subsidiary exceeds $100,000, such Options
shall be treated as Nonqualified Stock Options. For purposes of the preceding
sentence, (a) Options shall be taken into account in the order in which they
were granted, and (b) the Fair Market Value of the Shares shall be determined as
of the time the Option or other incentive stock option is granted.

(i)          Duration of plan. No ISO may be granted more than ten years after
the earlier of (a) adoption of this Plan by the Board and (b) the Effective
Date.

 

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(j)          Notification of disqualifying disposition. If any Participant shall
make any disposition of Shares issued pursuant to the exercise of an ISO, such
Participant shall notify the Company of such disposition within 30 days thereof.
The Company shall use such information to determine whether a disqualifying
disposition as described in Code section 421(b) has occurred.

(k)         Transferability. No ISO may be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution; provided, however, that at the discretion of the
Committee, an ISO may be transferred to a grantor trust under which Participant
making the transfer is the sole beneficiary.

 

Article 7. Stock Appreciation Rights

7.1          Grant of SARs. SARs may be granted to Participants in such number,
and upon such terms, and at any time and from time to time as shall be
determined by the Committee, in its sole discretion. Each grant of SARs shall be
evidenced by an Award Agreement.

7.2          Grant Price. The Grant Price for each grant of an SAR shall be
determined by the Committee and shall be specified in the Award Agreement
evidencing the SAR; provided, however, the Grant Price must be at least equal to
100% of the FMV of a Share as of the Grant Date, subject to adjustment as
provided for under Section 4.4.

7.3          Term of SAR. The term of an SAR granted to a Participant shall be
determined by the Committee, in its sole discretion; provided, however, no SAR
shall be exercisable later than the tenth anniversary date of its grant.

7.4          Exercise of SAR. An SAR shall be exercisable at such times (“SAR
Exercise Period”) and be subject to such restrictions and conditions as the
Committee shall in each instance approve, which terms and restrictions need not
be the same for each grant or for each Participant.

7.5          Notice of Exercise. An SAR shall be exercised by the delivery of a
notice of exercise to the Company or an agent designated by the Company in a
form specified or accepted by the Committee, or by complying with any
alternative procedures that may be authorized by the Committee, setting forth
the number of Shares with respect to which the SAR is to be exercised.

7.6          Settlement of SARs. Upon the exercise of an SAR, pursuant to a
notice of exercise properly completed and submitted to the Company in accordance
with Section 7.5, a Participant shall be entitled to receive payment from the
Company in an amount equal to the product of (a) and (b) below:

(a)          The excess of the Fair Market Value of a Share on the date of
exercise over the Grant Price.

(b)          The number of Shares with respect to which the SAR is exercised.

Payment shall be made in cash, Shares or a combination thereof as provided for
under the applicable Award Agreement.

 

Article 8. Restricted Stock

8.1          Grant of Restricted Stock. Restricted Stock may be granted to
Participants in such number, and upon such terms, and at any time and from time
to time as shall be determined by the Committee, in its sole discretion. Each
grant of Restricted Stock shall be evidenced by an Award Agreement.

8.2          Nature of Restrictions. Each grant of Restricted Stock shall
subject to a Restriction Period that shall lapse upon the satisfaction of such
conditions and restrictions as are determined by the Committee in its sole
discretion and set forth in an applicable Award Agreement. Such conditions or
restrictions may include, without limitation, one or more of the following:

(a)          A requirement that a Participant pay a stipulated purchase price
for each Share of Restricted Stock;

(b)          Restrictions based upon the achievement of specific performance
goals;

(c)          Time-based restrictions on vesting following the attainment of the
performance goals;

 

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(d)          Time-based restrictions; or

(e)          Restrictions under applicable laws and restrictions under the
requirements of any stock exchange or market on which such Shares are listed or
traded.

8.3          Issuance of Shares. To the extent deemed appropriate by the
Committee, the Company may retain the certificates representing Shares of
Restricted Stock in the Company’s possession until such time as all conditions
or restrictions applicable to such Shares have been satisfied or lapse. Shares
of Restricted Stock covered by each Restricted Stock grant shall become freely
transferable by the Participant after all conditions and restrictions applicable
to such Shares have been satisfied or lapsed (including satisfaction of any
applicable tax withholding obligations).

8.4          Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.2, each certificate representing Shares of
Restricted Stock granted pursuant to this Plan may bear a legend such as the
following or as otherwise determined by the Committee in its sole discretion:
The sale or transfer of Shares of stock represented by this certificate, whether
voluntary, involuntary or by operation of law, is subject to certain
restrictions on transfer as set forth in the Walter Management Investment Corp.
2011 Omnibus Incentive Plan, and in the associated Award Agreement. A copy of
this Plan and such Award Agreement may be obtained from Walter Management
Investment Corp.

8.5          Voting Rights. Unless otherwise determined by the Committee and set
forth in a Participant’s applicable Award Agreement, to the extent permitted or
required by law, as determined by the Committee, a Participant holding Shares of
Restricted Stock granted hereunder may be granted the right to exercise full
voting rights with respect to those Shares during the Period of Restriction.

 

Article 9. Restricted Stock Units

9.1          Grant of Restricted Stock Units. Restricted Stock Units may be
granted to Participants in such number, and upon such terms, and at any time and
from time to time as shall be determined by the Committee, in its sole
discretion. A grant of a Restricted Stock Unit or Restricted Stock Units shall
not represent the grant of Shares but shall represent a promise to deliver a
corresponding number of Shares based upon the completion of service, performance
conditions, or such other terms and conditions as specified in the applicable
Award Agreement over the Restriction Period. Each grant of Restricted Stock
Units shall be evidenced by an Award Agreement.

9.2          Nature of Restrictions. Each grant of Restricted Stock Units shall
be subject to a Restriction Period that shall lapse upon the satisfaction of
such conditions and restrictions as are determined by the Committee in its sole
discretion and set forth in an applicable Award Agreement. Such conditions or
restrictions may include, without limitation, one or more of the following:

(a)          A requirement that a Participant pay a stipulated purchase price
for each Restricted Stock Unit;

(b)          Restrictions based upon the achievement of specific performance
goals;

(c)          Time-based restrictions on vesting following the attainment of the
performance goals;

(d)          Time-based restrictions; and/or

(e)          Restrictions under applicable laws or under the requirements of any
stock exchange on which Shares are listed or traded.

9.3          Voting Rights. A Participant shall have no voting rights with
respect to any Restricted Stock Units granted hereunder or the Shares
corresponding to any Restricted Stock Units granted hereunder.

9.4          Settlement and Payment Restricted Stock Units. Unless otherwise
elected by the Participant or otherwise provided for in the Award Agreement,
Restricted Stock Units shall be settled upon the date such Restricted Stock
Units vest. Such settlement may be made in Shares, cash or a combination
thereof, as specified in the Award Agreement.

 

 

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Article 10. Performance Shares

10.1        Grant of Performance Shares. Performance Shares may be granted to
Participants in such number, and upon such terms and at any time and from time
to time as shall be determined by the Committee, in its sole discretion. Each
grant of Performance Shares shall be evidenced by an Award Agreement.

10.2       Value of Performance Shares. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the Grant Date. The
Committee shall set performance goals in its discretion that, depending on the
extent to which they are met over the specified Performance Period, shall
determine the number of Performance Shares that shall be paid to a Participant.

10.3       Earning of Performance Shares. After the applicable Performance
Period has ended, the number of Performance Shares earned by the Participant
over the Performance Period shall be determined as a function of the extent to
which the applicable corresponding performance goals have been achieved. This
determination shall be made solely by the Committee.

10.4       Form and Timing of Payment of Performance Shares. The Committee shall
pay at the close of the applicable Performance Period, or as soon as practicable
thereafter, any earned Performance Shares in the form of cash or in Shares or in
a combination thereof, as specified in a Participant’s applicable Award
Agreement. Any Shares paid to a Participant under this Section 10.4 may be
subject to any restrictions deemed appropriate by the Committee.

 

Article 11. Performance Units

11.1       Grant of Performance Units. Subject to the terms and provisions of
this Plan, Performance Units may be granted to a Participant in such number, and
upon such terms and at any time and from time to time as shall be determined by
the Committee, in its sole discretion. Each grant of Performance Units shall be
evidenced by an Award Agreement.

11.2       Value of Performance Units. Each Performance Unit shall have an
initial notional value equal to a dollar amount determined by the Committee, in
its sole discretion. The Committee shall set performance goals in its discretion
that, depending on the extent to which they are met over the specified
Performance Period, will determine the number of Performance Units that shall be
settled and paid to the Participant.

11.3       Earning of Performance Units. After the applicable Performance Period
has ended, the number of Performance Units earned by the Participant over the
Performance Period shall be determined as a function of the extent to which
the applicable corresponding performance goals have been achieved. This
determination shall be made solely by the Committee.

11.4       Form and Timing of Payment of Performance Units. The Committee shall
pay at the close of the applicable Performance Period, or as soon as practicable
thereafter, any earned Performance Units in the form of cash or in Shares or in
a combination thereof, as specified in a Participant’s applicable Award
Agreement. Any Shares paid to a Participant under this Section 11.4 may be
subject to any restrictions deemed appropriate by the Committee.

 

Article 12. Other Stock-Based Awards and Cash-Based Awards

12.1       Grant of Other Stock-Based Awards and Cash-Based Awards.

(a)          The Committee may grant Other Stock-Based Awards not otherwise
described by the terms of this Plan, including, but not limited to, the grant or
offer for sale of unrestricted Shares and the grant of deferred Shares or
deferred Share units, in such amounts and subject to such terms and conditions,
as the Committee shall determine, in its sole discretion. Such Awards may
involve the transfer of actual Shares to Participants, or payment in cash or
otherwise of amounts based on the value of Shares.

(b)          The Committee, at any time and from time to time, may grant
Cash-Based Awards to a Participant in such amounts and upon such terms as the
Committee shall determine, in its sole discretion.

(c)          Each grant of Other Stock-Based Awards and Cash-Based Awards shall
be evidenced by an Award Agreement.

 

 

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12.2        Value of Other Stock-Based Awards and Cash-Based Awards.

(a)          Each Other Stock-Based Award shall be expressed in terms of Shares
or units based on Shares, as determined by the Committee, in its sole
discretion.

(b)          Each Cash-Based Award shall specify a payment amount or payment
range as determined by the Committee, in its sole discretion. If the Committee
exercises its discretion to establish performance goals, the value of Cash-Based
Awards that shall be paid to the Participant will depend on the extent to which
such performance goals are met.

12.3        Payment of Other Stock-Based Awards and Cash-Based Awards.  Payment,
if any, with respect to Cash-Based Awards and Other Stock-Based Award shall be
made in accordance with the terms of the applicable Award Agreement, in cash,
Shares or a combination of both as determined by the Committee in its sole
discretion.

 

Article 13. Transferability of Awards and Shares

13.1        Transferability of Awards.  Except as provided in Section 13.2,
during a Participant’s lifetime, Options shall be exercisable only by the
Participant. Awards shall not be transferable other than by will or the laws of
descent and distribution or, subject to the consent of the Committee, pursuant
to a domestic relations order entered into by a court of competent jurisdiction;
no Awards shall be subject, in whole or in part, to attachment, execution or
levy of any kind; and any purported transfer in violation of this Section 13.1
shall be null and void. The Committee may establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any amounts
payable or Shares deliverable in the event of, or following, the Participant’s
death may be provided.

13.2        Committee Action.  Except as provided in Section 6.6(k), the
Committee may, in its discretion, determine that notwithstanding Section 13.1,
any or all Awards shall be transferable, without compensation to the transferor,
to and exercisable by such transferees, and subject to such terms and
conditions, as the Committee may deem appropriate; provided, however, no Award
may be transferred for value without shareholder approval.

13.3        Restrictions on Share Transferability.  The Committee may impose
such restrictions on any Shares acquired by a Participant under the Plan as it
may deem advisable, including, without limitation, minimum holding period
requirements, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed or traded or under any blue sky or state securities laws applicable to
such Shares.

 

Article 14. Performance-Based Compensation and Compliance with Code
Section 162(m)

14.1        Compliance with Section 162(m).  The provisions of the Plan are
intended to ensure that all Options and SARs granted hereunder to any
Participant who is or may be a Covered Employee at the time of exercise of such
Option or SAR grant qualify for exemption from the limitation on deductibility
imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(c)
and that such Options and SARs shall therefore be considered Performance-Based
Compensation and this Plan shall be interpreted and operated consistent with
that intention. The Committee may designate any Award (other than an Option or
SAR) as Performance-Based Compensation upon grant, in each case based upon a
determination that (i) the Participant is or may be a Covered Employee with
respect to such Award, and (ii) the Committee wishes such award to qualify for
exemption from the limitation on deductibility imposed by Section 162(m) of the
Code that is set forth in Section 162(m)(4)(c). The Committee shall have the
sole authority to specify which Awards are to be granted in compliance with
Section 162(m) and treated as Performance-Based Compensation.

14.2        Performance Measures.  The performance goals upon which the payment
or vesting of an Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures:

(a)          Allowance for loan losses and provision for loan losses

(b)          Book value;

(c)          Cash flow (including, but not limited to, cash flow from financing
activities, cash flow from investing activities and cash flow from operating
activities);

(d)          Earnings (either in aggregate or on a per-share basis);

 

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(e)         Earnings before or after either, or any combination of, interest,
taxes, depreciation, or amortization (EBITDA);

(f)          Economic value added (net operating profit after tax minus the sum
of capital multiplied by the cost of capital);

(g)         Expenses/costs;

(h)         Gross or operating margins;

(i)          Gross or net revenues;

(j)          Interest income;

(k)         Market share;

(l)          Net interest income;

(m)        Net income;

(n)         Non-interest income (including premium income);

(o)         Operating income/profit;

(p)         Operational performance measures;

(q)         Pre-tax Income;

(r)          Profitability ratios;

(s)         Return measures (including return on assets, equity, investment,
invested capital, share price);

(t)          Share price;

(u)         Strategic business objectives (including objective project
milestones);

(v)         Transactions relating to acquisitions or divestitures; or

(w)        Working capital.

Any Performance Measure(s) may, as the Committee, in its sole discretion deems
appropriate, (i) relate to the performance of the Company or any Subsidiary as a
whole or any business unit or division of the Company or any Subsidiary or any
combination thereof, (ii) relate to the performance of one or more portfolio
types, (iii) be compared to the performance of a group of comparator companies,
or published or special index, (iv) be based on change in the Performance
Measure over a specified period of time and such change may be measured based on
an arithmetic change over the specified period, such as cumulative change or
average change, or percentage change over the specified period such as
cumulative percentage change, average percentage change and compounded
percentage change, (v) relate to or be compared to one or more other Performance
Measures, or (vi) any combination of the foregoing. The Committee also has the
authority to provide for accelerated vesting of any Award based on the
achievement of performance goals pursuant to the Performance Measures specified
in this Article 14.

14.3        Evaluation of Performance. The Committee may provide in any Award
intended to qualify as Performance-Based Compensation that any evaluation of
performance may include or exclude any of the following events that occurs
during a Performance Period: (a) asset write-downs, (b) litigation or claim
judgments or settlements, (c) the effect of changes in tax laws, accounting
principles or other laws or provisions affecting reported financial results,
(d) any reorganization and restructuring programs, (e) Extraordinary Items,
(f) acquisitions or divestitures, and (g) foreign exchange gains and losses. To
the extent such inclusions or exclusions affect Awards to Covered Employees;
they shall be prescribed in a form that meets the requirements of Code
Section 162(m) for deductibility.

 

 

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14.4        Adjustment of Performance-Based Compensation. Awards that are
intended to qualify as Performance-Based Compensation may not be adjusted
upward. The Committee shall retain the discretion to adjust such Awards
downward, either on a formula or discretionary basis or any combination, as the
Committee determines, in its sole discretion.

14.5        Committee Discretion. In the event that applicable tax or securities
laws change to permit Committee discretion to alter the governing Performance
Measures or permit flexibility with respect to the terms of any Award or Awards
to be treated as Performance-Based Compensation without obtaining shareholder
approval of such changes, the Committee shall have sole discretion to make such
changes without obtaining shareholder approval. In addition, in the event that
the Committee determines that it is advisable to grant Awards that shall not
qualify as Performance-Based Compensation, the Committee may make such grants
without satisfying the requirements of Code Section 162(m) and base vesting on
Performance Measures other than those set forth in Section 14.2.

 

Article 15. Termination of Employment; Termination of Directorship and
Termination as a Third-Party Service Provider

Each Award Agreement evidencing the grant of an Award shall provide for the
following:

(a)          The extent to which a Participant shall vest in or forfeit such
Award following the Participant’s Termination of Employment, Termination of
Directorship and Termination as a Third-Party Service Provider, as applicable.

(b)          With respect to an Award in the form of an Option or SAR, the
extent to which a Participant shall have the right to exercise the Option or SAR
following the Participant’s Termination of Employment, Termination of
Directorship and Termination as a Third-Party Service Provider, as applicable.

The foregoing provisions shall be determined in the sole discretion of the
Committee, shall be included in each Award Agreement entered into with each
Participant, need not be uniform among all Award Agreements and may reflect
distinctions based on the reasons for termination. In addition, the Committee
shall determine, in its sole discretion, the circumstances constituting a
Termination as a Third-Party Service Provider and shall set forth those
circumstances in each Award Agreement entered into with each Third-Party Service
Provider.

 

Article 16. Nonemployee Director Awards

16.1        Awards to Nonemployee Directors. The Board or Committee shall
determine and approve all Awards to Nonemployee Directors. The terms and
conditions of any grant of any Award to a Nonemployee Director shall be set
forth in an Award Agreement.

16.2        Awards in Lieu of Fees. The Board or Committee may permit a
Nonemployee Director the opportunity to receive an Award in lieu of payment of
all or a portion of future director fees (including but not limited to cash
retainer fees and meeting fees) or other types Awards pursuant to such terms and
conditions as the Board or Committee may prescribe and set forth in an
applicable sub-plan or Award Agreement.

 

Article 17. Effect of a Change in Control

Notwithstanding any other provision of this Plan to the contrary, the provisions
of this Article 17 shall apply in the event of a Change in Control, unless
otherwise determined by the Committee in its sole discretion, and set forth in
the applicable Award Agreement:

(a)          Outstanding Options and SARs.  Upon a Change in Control, a
Participant’s then-outstanding Options and SARs shall immediately become fully
vested (and, to the extent applicable, all performance conditions shall be
deemed satisfied) and exercisable over the exercise period set forth in the
applicable Award Agreement.

(b)          Awards, other than Options and SARs, Subject to a Service
Condition.  Upon a Change in Control, a Participant’s then-outstanding Awards,
other than Options and SARs, that are not vested and as to which vesting depends
solely on the satisfaction of a service obligation by a Participant to the
Company or any Subsidiary shall become fully vested and shall be settled in
cash, Shares or a combination as provided for under the applicable Award
Agreement as soon as practicable following such Change in Control.

 

 

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(c)          Awards, other than Options and SARs, Subject to a Performance
Condition. Unless otherwise specified in a Participant’s applicable Award
Agreement, upon a Change in Control, a Participant’s then-outstanding Awards,
other than Options and SARs, that are subject to one or more performance
conditions shall immediately vest and all performance conditions shall be deemed
satisfied as if target performance was achieved and shall be settled in cash,
Shares or a combination as provided for under the applicable Award Agreement as
soon as practicable following such Change in Control; notwithstanding that the
applicable performance period, retention period or other restrictions and
conditions have not been completed or satisfied.

 

Article 18. Dividend Equivalents

The Committee may grant dividend equivalents to a Participant based on the
dividends declared on Shares that are subject to any Award granted to the
Participant with such dividend equivalents credited to the Participant as of the
applicable dividend payment dates that occur during a period determined by the
Committee. Such dividend equivalents shall be converted to and paid in cash or
additional Shares or Awards by such formula and at such time and subject to such
limitations as may be determined by the Committee.

 

Article 19. Beneficiary Designation

Each Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of his death before he receives
any or all of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid to or exercised by the
Participant’s executor, administrator or legal representative.

 

Article 20. Rights of Participants

20.1        Employment. Nothing in this Plan or an Award Agreement shall
(a) interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant’s employment with the Company or any
Subsidiary at any time or for any reason not prohibited by law or (b) confer
upon any Participant any right to continue his employment or service as a
Director or Third-Party Service Provider for any specified period of time.
Neither an Award nor any benefits arising under this Plan shall constitute an
employment contract with the Company or any Subsidiary and, accordingly, subject
to Articles 3 and 21, this Plan and the benefits hereunder may be amended or
terminated at any time in the sole and exclusive discretion of the Board without
giving rise to any liability on the part of the Company, any Subsidiary, the
Committee or the Board.

20.2        Participation. No individual shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.

20.3        Rights as a Shareholder. Except as otherwise provided herein, a
Participant shall have none of the rights of a shareholder with respect to
Shares covered by any Award until the Participant becomes the record holder of
such Shares.

 

Article 21. Amendment and Termination

21.1        Amendment and Termination of the Plan and Awards.

(a)          Subject to subparagraphs (b) and (c) of this Section 21.1 and
Section 21.3 of the Plan, the Board may at any time amend or terminate the Plan
or amend or terminate any outstanding Award.

(b)          Except as provided for in Section 4.4, the terms of an outstanding
Award may not be amended, without prior shareholder approval, to:

(i)          reduce the Option Price of an outstanding Option or to reduce the
Grant Price of an outstanding SAR,

(ii)          cancel an outstanding Option or SAR in exchange for other Options
or SARs with an Option Price or Grant Price, as applicable, that is less than
the Option Price of the cancelled Option or the Grant Price of the cancelled
SAR, as applicable, or

 

 

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(iii)          cancel an outstanding Option with an Option Price that is less
than the Fair Market Value of a Share on the date of cancellation or cancel an
outstanding SAR with a Grant Price that is less than the Fair Market Value of a
Share on the date of cancellation in exchange for cash or another Award.

(c)          Notwithstanding the foregoing, no amendment of this Plan shall be
made without shareholder approval if shareholder approval is required pursuant
to rules promulgated by any stock exchange or quotation system on which Shares
are listed or quoted or by applicable U.S. state corporate laws or regulations,
applicable U.S. federal laws or regulations and the applicable laws of any
foreign country or jurisdiction where Awards are, or will be, granted under the
Plan.

21.2        Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Subject to Section 14.4, the Committee may make adjustments
in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.4) affecting the Company or the financial
statements of the Company or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such adjustments
are appropriate in order to prevent unintended dilution or enlargement of the
benefits or potential benefits intended to be made available under this Plan.
The determination of the Committee as to the foregoing adjustments, if any,
shall be conclusive and binding on Participants under this Plan. By accepting an
Award under this Plan, a Participant agrees to any adjustment to the Award made
pursuant to this Section 21.2 without further consideration or action.

21.3        Awards Previously Granted.  Notwithstanding any other provision of
this Plan to the contrary, other than Sections 21.2, 21.4 and 23.14, no
termination or amendment of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding such Award.

21.4        Amendment to Conform to Law.  Notwithstanding any other provision of
this Plan to the contrary, the Committee may amend the Plan or an Award
Agreement, to take effect retroactively or otherwise, as deemed necessary or
advisable for the purpose of conforming the Plan or an Award Agreement to any
law relating to plans of this or similar nature, and to the administrative
regulations and rulings promulgated thereunder. By accepting an Award under this
Plan, a Participant agrees to any amendment made pursuant to this Section 21.4
to the Plan and any Award without further consideration or action.

 

Article 22. Tax Withholding

22.1        Minimum Tax Withholding.  The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
the minimum statutory amount to satisfy applicable federal, state and local tax
withholding requirements, domestic or foreign, with respect to any taxable event
arising as a result of this Plan but in no event shall such deduction or
withholding or remittance exceed the minimum statutory withholding requirements.

22.2        Share Withholding.  With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
upon the settlement of Restricted Stock Units, or upon the achievement of
performance goals related to Performance Shares, or any other taxable event
arising as a result of an Award granted hereunder (collectively and individually
referred to as a “Share Payment”), a Participant may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in whole or
in part, by having the Company withhold from a Share Payment the number of
Shares having a Fair Market Value on the date the withholding is to be
determined equal to the minimum statutory withholding requirement but in no
event shall such withholding exceed the minimum statutory withholding
requirement. All such elections shall be irrevocable, made in writing, and
signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

 

Article 23. General Provisions

23.1        Forfeiture Events.

(a)          In addition to the forfeiture events specified in Section 23.1(b),
the Committee may specify in an Award Agreement that the Participant’s rights,
payments and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting of an Award.

 

 

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(b)          A Participant’s Termination of Employment for Cause shall result in
the forfeiture of the Participant’s outstanding Awards in accordance with the
following:

(i)          Any outstanding and nonvested Options, SARs, Restricted Stock,
RSUs, Performance Shares, Performance Units, Cash-Based Awards and Other
Stock-Based Awards granted to the Participant shall be forfeited as of the date
immediately preceding the Participant’s Termination of Employment; and

(ii)          Any vested and unexercised Options and SARs, vested but not
settled RSUs, earned but not settled Performance Shares or Performance Units,
and earned and/or vested Cash-Based Awards and Other Stock-Based Awards granted
to the Participant shall be forfeited as of the date immediately preceding the
Participant’s Termination of Employment.

23.2        Legend. The certificates for Shares may include any legend that the
Committee deems appropriate to reflect any restrictions on transfer of such
Shares.

23.3        Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

23.4        Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

23.5        Requirements of Law. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

23.6        Delivery of Title. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under this Plan prior to:

(a)          Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and

(b)          Completion of any registration or other qualification of the Shares
under any applicable national or foreign law or ruling of any governmental body
that the Company determines to be necessary or advisable.

23.7        Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

23.8        Investment Representations. The Committee may require any individual
receiving Shares pursuant to an Award under this Plan to represent and warrant
in writing that the individual is acquiring the Shares for investment and
without any present intention to sell or distribute such Shares.

23.9        Employees Based Outside of the United States. Notwithstanding any
provision of this Plan to the contrary, in order to comply with the laws in
other countries in which the Company or any Subsidiaries operate or have
Employees, Directors or Third-Party Service Providers, the Committee, in its
sole discretion, shall have the power and authority to:

(a)          Determine which Subsidiaries shall be covered by this Plan;

(b)          Determine which Employees, Directors or Third-Party Service
Providers outside the United States are eligible to participate in this Plan;

(c)          Modify the terms and conditions of any Award granted to Employees,
Directors or Third-Party Service Providers outside the United States to comply
with applicable foreign laws;

 

 

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(d)          Establish sub-plans and modify exercise procedures and other terms
and procedures, to the extent such actions may be necessary or advisable. Any
sub-plans and modifications to Plan terms and procedures established under this
Section 23.9 by the Committee shall be attached to this Plan document as
appendices; and

(e)          Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approvals.

Notwithstanding the above, the Committee may not take any actions hereunder, and
no Awards shall be granted, that would violate applicable law.

23.10      Uncertificated Shares. To the extent that this Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may be effected on a noncertificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange.

23.11      Unfunded Plan. Participants shall have no right, title or interest
whatsoever in or to any investments that the Company or any Subsidiaries may
make to aid it in meeting its obligations under this Plan. Nothing contained in
this Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company and any Participant, beneficiary, legal representative or any other
individual. To the extent that any individual acquires a right to receive
payments from the Company or any Subsidiary under this Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company or the
Subsidiary, as the case may be. All payments to be made hereunder shall be paid
from the general funds of the Company, or the Subsidiary, as the case may be,
and no special or separate fund shall be established, and no segregation of
assets shall be made to assure payment of such amounts except as expressly set
forth in this Plan.

23.12      No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award. The Committee shall determine
whether cash, Awards or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.

23.13      Retirement and Welfare Plans.  Neither Awards made under this Plan
nor Shares or cash paid pursuant to such Awards may be included as
“compensation” for purposes of computing the benefits payable to any Participant
under the Company’s or any Subsidiary’s retirement plans (both qualified and
nonqualified) or welfare benefit plans unless such other plan expressly provides
that such compensation shall be taken into account in computing a Participant’s
benefit.

23.14      Deferred Compensation.  Unless otherwise indicated in the applicable
Award Agreement, it is not intended that any Award under this Plan, in form
and/or operation, will constitute “deferred compensation” within the meaning of
Code Section 409A and therefore, it is intended that each Award will not be
subject to the requirements applicable to deferred compensation under section
409A of the Code and the regulations thereunder.

(a)          Awards that are not intended to constitute deferred
compensation.  With respect to an Award that is not intended to constitute
deferred compensation within the meaning of Code Section 409A, (i) to the extent
necessary and permitted under Code Section 409A, the Company is authorized to
amend this Plan or applicable Award Agreement or to substitute such Award with
another Award of comparable economic value so that the Award as modified or
substituted and/or the Plan as modified, remains exempt from the requirements
applicable to deferred compensation under Code Section 409A of the Code (ii) the
Committee shall take no action otherwise permitted under the Plan or under an
Award Agreement to the extent such action shall cause such Award to be treated
as deferred compensation within the meaning of Code Section 409A. The Committee,
in its sole discretion, shall determine to what extent if any, this Plan or
applicable Award Agreement shall be required to be so modified or substituted.
Notwithstanding any provision to the contrary, such modification or substitution
shall be made without prior notice to or consent of Participants.

(b)          Awards that constitute deferred compensation.  With respect to an
Award that constitutes deferred compensation within the meaning of Code
Section 409A by form or operation (including, but not limited to, an Award
referenced under paragraph (a) above that the Committee determines is a form of
deferred compensation), (i) to the extent necessary the Company is authorized to
amend this Plan or applicable Award Agreement or to substitute such Award with
another Award of comparable economic value so that the Award as modified or
substituted and/or the Plan as modified, complies with the requirements
applicable to deferred compensation under Code Section 409A and (ii) the
Committee shall take no action otherwise permitted under the Plan or under an
Award Agreement to the extent such action shall cause such Award to no longer
comply with the requirements applicable to deferred compensation under Code
Section 409A. The

 

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Committee, in its sole discretion, shall determine to what extent if any, this
Plan or applicable Award Agreement shall be required to be so modified or
substituted. Notwithstanding any provision to the contrary, such modification or
substitution shall be made without prior notice to or consent of Participants.

(c)          Treatment of specified employees.  If a Participant is a “specified
employee” as defined under Code Section 409A and the Participant’s Award is to
be settled on account of the Participant’s separation from service (for reasons
other than death) and such Award constitutes “deferred compensation” as defined
under Code Section 409A, then any portion of the Participant’s Award that would
otherwise be settled during the six-month period commencing on the Participant’s
separation from service shall be settled as soon as practicable following the
conclusion of the six-month period (or following the Participant’s death if it
occurs during such six-month period).

23.15      Nonexclusivity of this Plan.  The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or Committee to
adopt such other compensation arrangements as it may deem desirable for any
Participant.

23.16      No Constraint on Corporate Action.  Nothing in this Plan shall be
construed to: (i) limit, impair, or otherwise affect the Company’s or a
Subsidiary’s right or power to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell or transfer all or any part of its
business or assets; or, (ii) limit the right or power of the Company or a
Subsidiary to take any action that such entity deems to be necessary or
appropriate.

23.17      Governing Law.  The Plan and each Award Agreement shall be governed
by the laws of the State of Maryland excluding any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of
this Plan to the substantive law of another jurisdiction. Unless otherwise
provided in the Award Agreement, recipients of an Award under this Plan are
deemed to submit to the exclusive jurisdiction and venue of the federal or state
courts of Maryland to resolve any and all issues that may arise out of or relate
to this Plan or any related Award Agreement.

23.18      Delivery and Execution of Electronic Documents.  To the extent
permitted by applicable law, the Company may (i) deliver by email or other
electronic means (including posting on a website maintained by the Company or by
a third party under contract with the Company) all documents relating to the
Plan or any Award thereunder (including without limitation, prospectuses
required by the Commission) and all other documents that the Company is required
to deliver to its security holders (including without limitation, annual reports
and proxy statements) and (ii) permit Participant’s to electronically execute
applicable Plan documents (including, but not limited to, Award Agreements) in a
manner prescribed to the Committee.

23.19      No Representations or Warranties Regarding Tax
Effect.  Notwithstanding any provision of the Plan to the contrary, the Company,
Subsidiaries, the Board and the Committee neither represent nor warrant the tax
treatment under any federal, state, local or foreign laws and regulations
thereunder (individually and collectively referred to as the “Tax Laws”) of any
Award granted or any amounts paid to any Participant under the Plan including,
but not limited to, when and to what extent such Awards or amounts may be
subject to tax, penalties and interest under the Tax Laws.

23.20      Indemnification.  Subject to requirements of Maryland law, each
individual who is or shall have been a member of the Board, or a Committee
appointed by the Board, or an officer of the Company to whom authority was
delegated in accordance with Article 3, shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action taken or
failure to act under this Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his/her own behalf, unless such loss, cost, liability or
expense is a result of his/her own willful misconduct or except as expressly
provided by statute. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such individuals may
be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter
of law or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.

23.21      Successors.  All obligations of the Company under this Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.

 

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