Exhibit 10.1
TIPTREE FINANCIAL INC.
2013 OMNIBUS INCENTIVE PLAN
Tiptree Financial Inc. (the "Company"), a Maryland corporation, hereby
establishes and adopts the following Tiptree Financial Inc. 2013 Omnibus
Incentive Plan (the "Plan").
1.PURPOSE OF THE PLAN
The purpose of the Plan is to assist the Company and its Subsidiaries in
attracting and retaining selected individuals to serve as employees, directors
and consultants of the Company and its Subsidiaries who are expected to
contribute to the Company's success and to achieve long-term objectives which
will inure to the benefit of all stockholders of the Company through the
additional incentives inherent in the Awards hereunder.
2.    DEFINITIONS
2.1.    "162(m) Award" means an Award intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code.
2.2.    "Affiliate" means, as to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The term "controlling" and "controlled"
shall have meanings correlative to the foregoing.
2.3.    "Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Restricted Stock Unit Award, Other Share-Based Award or Performance
Award granted pursuant to the provisions of the Plan.
2.4.    "Award Agreement" shall mean any agreement, contract or other instrument
or document evidencing any Award hereunder, whether in writing or through an
electronic medium.
2.5.    "Board" shall mean the board of directors of the Company.
2.6.    "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.7.    "Committee" shall mean the Compensation, Nominating and Governance
Committee of the Board or a subcommittee thereof formed by the Compensation,
Nominating and Governance Committee to act as the Committee hereunder, or such
other committee to address matters under this Plan as may be constituted by the
Board from time to time. To the extent that the Company grants a 162(m) Award,
the Committee shall consist of no fewer than

 
 
 

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two Directors, each of whom is an "outside director" within the meaning of
Section 162(m) of the Code.
2.8.    "Covered Employee" shall mean an employee of the Company or its
subsidiaries who is a "covered employee" within the meaning of Section 162(m) of
the Code to the extent required by such rules.
2.9.    "Director" shall mean a member of the Board who is not an employee of
the Company or any of its Subsidiaries.
2.10.    "Dividend Equivalents" shall have the meaning set forth in
Section 12.5.
2.11.    "Employee" shall mean any employee of the Company or any Subsidiary and
any prospective employee conditioned upon, and effective not earlier than, such
person becoming an employee of the Company or any Subsidiary. Solely for
purposes of the Plan, an Employee shall also mean any consultant who is a
natural person and who provides services to the Company or any Subsidiary, so
long as such person (i) renders bona fide services that are not in connection
with the offer and sale of the Company's securities in a capital-raising
transaction and (ii) does not directly or indirectly promote or maintain a
market for the Company's securities.
2.12.    "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.13.    "Fair Market Value" shall mean, with respect to any property other than
Shares, the market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee. The Fair
Market Value of Shares as of any date shall be the per Share closing price of
the Shares as reported on the principal securities exchange on which the Shares
are traded, and if the Shares are not listed on a securities exchange, the Fair
Market Value of Shares shall be determined by the Committee in its sole
discretion.
2.14.    "Limitations" shall have the meaning set forth in Section 10.5.
2.15.    "Option" shall mean any right granted to a Participant under the Plan
allowing such Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.
2.16.    "Other Share-Based Award" shall have the meaning set forth in Section
8.1.
2.17.    "Participant" shall mean an Employee or Director who is selected by the
Committee to receive an Award under the Plan.
2.18.    "Payee" shall have the meaning set forth in Section 13.1.
2.19.    "Performance Award" shall mean any Award of Performance Cash or
Performance Shares granted pursuant to Article 9.

 
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2.20.    "Performance Cash" shall mean any cash incentives granted pursuant to
Article 9 which will be paid to the Participant upon the achievement of such
performance goals as the Committee shall establish.
2.21.    "Performance Period" shall mean the period established by the Committee
during which any performance goals specified by the Committee with respect to
such Award are to be measured.
2.22.    "Performance Share" shall mean any grant pursuant to Article 9 of a
unit valued by reference to a designated number of Shares, which value will be
paid to the Participant upon achievement of such performance goals as the
Committee shall establish.
2.23.    "Person" means any individual, corporation, partnership, joint venture,
limited liability company, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
2.24.    "Permitted Assignee" shall have the meaning set forth in Section 12.3.
2.25.    "Restricted Stock" shall mean any Share issued with the restriction
that the holder may not sell, transfer, pledge or assign such Share and with
such other restrictions as the Committee, in its sole discretion, may impose
(including any restriction on the right to vote such Share and the right to
receive any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.
2.26.    "Restricted Stock Award" shall have the meaning set forth in
Section 7.1.
2.27.    "Restricted Stock Unit" means an Award that is valued by reference to a
Share, which value may be paid to the Participant by delivery of such property
as the Committee shall determine, including without limitation, cash or Shares,
or any combination thereof, and that has such restrictions as the Committee, in
its sole discretion, may impose, including without limitation, any restriction
on the right to retain such Awards, to sell, transfer, pledge or assign such
Awards, and/or to receive any Dividend Equivalents with respect to such Awards,
which restrictions may lapse separately or in combination at such time or times,
in installments or otherwise, as the Committee may deem appropriate.
2.28.    "Restricted Stock Unit Award" shall have the meaning set forth in
Section 7.1
2.29.    "Shares" shall mean the shares of the Class A common stock of the
Company, par value $0.01 per share.
2.30.    "Stock Appreciation Right" shall mean the right granted to a
Participant pursuant to Article 6.
2.31.    "Subsidiary" shall mean with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which (i) if a

 
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corporation, at least 25% of the total voting power of shares of stock entitled
(irrespective of whether, at the time, stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a partnership, limited liability company,
association, joint venture or other business entity, at least 25% of the
partnership, joint venture or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof.
2.32.    "Substitute Awards" shall mean Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted, or the right or obligation to make future awards, in each case by a
company acquired by the Company or any Subsidiary or with which the Company or
any Subsidiary combines.
3.    SHARES SUBJECT TO THE PLAN
3.1.    Number of Shares. (%3) Subject to adjustment as provided in
Section 12.2, a total of 2,000,000 Shares shall be authorized for issuance under
the Plan.
(a)    If any Shares subject to an Award are forfeited, expire or otherwise
terminate without issuance of such Shares, or any Award is settled for cash or
otherwise does not result in the issuance of all or a portion of the Shares
subject to such Award (including payment in Shares on exercise of a Stock
Appreciation Right), such Shares shall, to the extent of such forfeiture,
expiration, termination, cash settlement or non-issuance, again be available for
issuance under the Plan.
(b)    In the event that (i) any Option or other Award granted hereunder is
exercised through the tendering of Shares (either actually or by attestation) or
by the withholding of Shares by the Company, or (ii) withholding tax liabilities
arising from such Option or other Award are satisfied by the tendering of Shares
(either actually or by attestation) or by the withholding of Shares by the
Company, then the Shares so tendered or withheld shall be available for issuance
under the Plan.
(c)    Substitute Awards shall not reduce the Shares authorized for grant under
the Plan or authorized for grant to a Participant in any calendar year.
Additionally, in the event that a company acquired by the Company or any
Subsidiary or with which the Company or any Subsidiary combines has shares
available under a pre-existing plan approved by stockholders and not adopted in
contemplation of such acquisition or combination, the shares available for grant
pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration
payable to the holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for grant under the Plan; provided that Awards using such
available shares shall not be made after the date awards or grants could have
been made under

 
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the terms of the pre-existing plan, absent the acquisition or combination, and
shall only be made to individuals who were not Employees or Directors prior to
such acquisition or combination.
3.2.    Character of Shares. Any Shares issued hereunder may consist, in whole
or in part, of authorized and unissued shares, treasury shares or shares
purchased in the open market or otherwise.
4.    ELIGIBILITY AND ADMINISTRATION
4.1.    Eligibility. Any Employee or Director shall be eligible to be selected
as a Participant.
4.2.    Administration. (%3) The Plan shall be administered by the Committee.
The Committee shall have full power and authority, subject to the provisions of
the Plan and subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:
(i) select the Employees and Directors to whom Awards may from time to time be
granted hereunder; (ii) determine the type or types of Awards, not inconsistent
with the provisions of the Plan, to be granted to each Participant hereunder;
(iii) determine the number of Shares or dollar value to be covered by each Award
granted hereunder; (iv) determine the terms and conditions, not inconsistent
with the provisions of the Plan, of any Award granted hereunder; (v) determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property; (vi) determine whether, to what extent, and
under what circumstances cash, Shares, other property and other amounts payable
with respect to an Award made under the Plan shall be deferred either
automatically or at the election of the Participant; (vii) determine whether, to
what extent and under what circumstances any Award shall be canceled or
suspended; (viii) interpret and administer the Plan and any instrument or
agreement entered into under or in connection with the Plan, including any Award
Agreement; (ix) correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent that the
Committee shall deem desirable to carry it into effect; (x) establish such rules
and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; (xi) determine whether any Award, other than
an Option or Stock Appreciation Right, will have Dividend Equivalents; and
(xii) make any other determination and take any other action that the Committee
deems necessary or desirable for administration of the Plan.
(a)    Decisions of the Committee shall be final, conclusive and binding on all
persons or entities, including the Company, any Participant, and any Subsidiary.
(b)    To the extent not inconsistent with applicable law, or the rules and
regulations of the principal securities exchange on which the Shares are traded,
the Committee may delegate to (i) a committee of one or more directors of the
Company any of the authority of the Committee under the Plan, including the
right to grant, cancel or suspend Awards and (ii) to the extent permitted by
law, one or more executive officers or a committee of executive officers the
right to grant Awards to Employees who are not Directors or executive officers
of the Company.

 
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5.    OPTIONS
5.1.    Grant of Options. Options may be granted hereunder to Participants
either alone or in addition to other Awards granted under the Plan. Any Option
shall be subject to the terms and conditions of this Article and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable.
5.2.    Award Agreements. All Options granted pursuant to this Article shall be
evidenced by an Award Agreement in such form and containing such terms and
conditions as the Committee shall determine which are not inconsistent with the
provisions of the Plan. The terms of Options need not be the same with respect
to each Participant. Granting an Option pursuant to the Plan shall impose no
obligation on the recipient to exercise such Option. Any individual who is
granted an Option pursuant to this Article may hold more than one Option granted
pursuant to the Plan at the same time.
5.3.    Option Price. Other than in connection with Substitute Awards, the
option price per each Share purchasable under any Option granted pursuant to
this Article shall not be less than 100% of the Fair Market Value of one Share
on the date of grant of such Option; provided that the option price of an
incentive stock option granted to an employee who, at the time of grant, owns
stock possessing more than ten (10) percent of the total combined voting power
of all classes of stock of the Company (a "Ten Percent Shareholder") shall be no
less than 110% of the Fair Market Value of one Share on the date of grant of
such Option.
5.4.    Option Term. The term of each Option shall be fixed by the Committee in
its sole discretion; provided that no Option shall be exercisable after the
expiration of ten (10) years from the date the Option is granted; provided,
further that no incentive stock option granted to a Ten Percent Shareholder
shall be exercisable after five (5) years from the date the Option is granted.
5.5.    Exercise of Options. (%3) Options shall be subject to such vesting
conditions as may be imposed by the Committee. Vested Options granted under the
Plan shall be exercised by the Participant or by a Permitted Assignee thereof
(or by the Participant's executors, administrators, guardian or legal
representative, as may be provided in an Award Agreement) as to all or part of
the Shares covered thereby, by giving notice of exercise to the Company or its
designated agent, specifying the number of Shares to be purchased. The notice of
exercise shall be in such form, made in such manner, and in compliance with such
other requirements consistent with the provisions of the Plan as the Committee
may prescribe from time to time.
(a)    Unless otherwise provided in an Award Agreement, full payment of such
purchase price shall be made at the time of exercise and shall be made (i) in
cash or cash equivalents (including certified check or bank check or wire
transfer of immediately available funds), (ii) by tendering previously acquired
Shares (either actually or by attestation, valued at their then Fair Market
Value), (iii) with the consent of the Committee, by delivery of other
consideration having a Fair Market Value on the exercise date equal to the total
purchase price, (iv) with the consent of the Committee, by withholding Shares
otherwise issuable in connection with the exercise of the Option, (v) through
any other method specified in an Award Agreement,

 
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or (vi) any combination of any of the foregoing. The notice of exercise,
accompanied by such payment, shall be delivered to the Company at its principal
business office or such other office as the Committee may from time to time
direct, and shall be in such form, containing such further provisions consistent
with the provisions of the Plan, as the Committee may from time to time
prescribe. In no event may any Option granted hereunder be exercised for a
fraction of a Share. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date of such issuance.
(b)    The Award Agreement for an Option shall set forth the extent to which it
may be exercised following termination of the Participant's employment with or
provision of services to the Company (including service as a director of the
Company) and its Subsidiaries.
5.6.    Form of Settlement. In its sole discretion, the Committee may provide
that the Shares to be issued upon an Option's exercise shall be in the form of
Restricted Stock or other similar securities.
5.7.    Incentive Stock Options. The Committee may grant Options intended to
qualify as "incentive stock options" as defined in Section 422 of the Code, to
any employee of the Company or any subsidiary (as defined in Section 422 of the
Code), subject to the requirements of Section 422 of the Code. The aggregate
Fair Market Value (determined as of the date an Option is granted) of the Shares
for which incentive stock options granted to any employee under this Plan may
first become exercisable in any calendar year shall not exceed $100,000. Solely
for purposes of determining whether Shares are available for the grant of
"incentive stock options" under the Plan, the maximum aggregate number of Shares
that may be issued pursuant to "incentive stock options" granted under the Plan
shall be 1,000,000 Shares, subject to adjustment provided in Section 12.2.
6.    STOCK APPRECIATION RIGHTS
6.1.    Grant and Exercise. The Committee may provide Stock Appreciation Rights
(a) in conjunction with all or part of any Option granted under the Plan or at
any subsequent time during the term of such Option, (b) in conjunction with all
or part of any Award (other than an Option) granted under the Plan or at any
subsequent time during the term of such Award, or (c) without regard to any
Option or other Award, in each case upon such terms and conditions as the
Committee may establish in its sole discretion.
6.2.    Terms and Conditions. Stock Appreciation Rights shall be subject to such
terms and conditions, not inconsistent with the provisions of the Plan, as shall
be determined from time to time by the Committee, including the following:
(a)    Upon the exercise of a Stock Appreciation Right, the holder shall have
the right to receive the excess of (i) the Fair Market Value of one Share on the
date of exercise over (ii) the grant price of the Stock Appreciation Right on
the date of grant, which, except in the case of Substitute Awards or in
connection with an adjustment provided in Section 12.2, shall not be less than
the Fair Market Value of one Share on such date of grant of the right.

 
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(b)    The Committee shall determine in its sole discretion whether upon the
exercise of a Stock Appreciation Right payment shall be made in cash, in whole
Shares or other property, or any combination thereof.
(c)    The provisions of Stock Appreciation Rights need not be the same with
respect to each recipient.
(d)    Stock Appreciation Rights shall be subject to such vesting conditions as
may be imposed by the Committee. The Committee may impose such other conditions
or restrictions on the terms of exercise of any Stock Appreciation Right, as it
shall deem appropriate. The Award Agreement for the Stock Appreciation Right
shall set forth the extent to which it may be exercised following termination of
the Participant's employment with or provision of services to the Company
(including service as a director of the Company) and its Subsidiaries.
(e)    A Stock Appreciation Right shall have (i) a grant price not less than
Fair Market Value on the date of grant (subject to the requirements of
Section 409A of the Code with respect to a Stock Appreciation Right granted in
conjunction with, but subsequent to, an Option), and (ii) a term not greater
than ten (10) years.
(f)    The Committee may impose such terms and conditions on Stock Appreciation
Rights granted in conjunction with any Award (other than an Option) as the
Committee shall determine in its sole discretion.
7.    RESTRICTED STOCK AND RESTRICTED STOCK UNITS
7.1.    Grants. Awards of Restricted Stock and Restricted Stock Units may be
issued hereunder to Participants either alone or in addition to other Awards
granted under the Plan (a "Restricted Stock Award" or "Restricted Stock Unit
Award" respectively), and such Restricted Stock Awards and Restricted Stock Unit
Awards shall also be available as a form of payment of Performance Awards and
other earned cash-based incentive compensation. A Restricted Stock Award or
Restricted Stock Unit Award shall be subject to vesting restrictions imposed by
the Committee covering a period of time specified by the Committee, unless the
Committee applies Article 10 to the Award as provided in Section 10.1. The
Committee has absolute discretion to determine whether any consideration (other
than services) is to be received by the Company or any Subsidiary as a condition
precedent to the issuance of Restricted Stock or Restricted Stock Units.
7.2.    Award Agreements. The terms of any Restricted Stock Award or Restricted
Stock Unit Award granted under the Plan shall be set forth in an Award Agreement
which shall contain provisions determined by the Committee and not inconsistent
with the Plan. The terms of Restricted Stock Awards and Restricted Stock Unit
Awards need not be the same with respect to each Participant.
7.3.    Rights of Holders of Restricted Stock and Restricted Stock Units. Unless
otherwise provided in the Award Agreement, beginning on the date of grant of the
Restricted

 
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Stock Award and subject to execution of the Award Agreement, the Participant
shall become a stockholder of the Company with respect to all Shares subject to
the Award Agreement and shall have all of the rights of a stockholder, including
the right to vote such Shares and the right to receive distributions made with
respect to such Shares. A Participant receiving a Restricted Stock Unit Award
shall not possess any rights of a stockholder with respect to such Award. Except
as otherwise provided in an Award Agreement any Shares or any other property
(including cash) distributed as a dividend or otherwise with respect to any
Restricted Stock Award as to which the restrictions have not yet lapsed shall be
subject to the same restrictions as such Restricted Stock Award. Notwithstanding
the provisions of this Section, cash dividends with respect to any Restricted
Stock Award and any other property distributed as a dividend or otherwise with
respect to any Restricted Stock Award or the number of Shares covered by a
Restricted Stock Unit Award shall either (i) not be paid or credited or (ii) be
accumulated, shall be subject to restrictions and risk of forfeiture to the same
extent as the Restricted Stock or Restricted Stock Units with respect to which
such cash, Shares or other property has been distributed and shall be paid at
the time such restrictions and risk of forfeiture lapse.
7.4.    Effect of Termination of Employment. The Award Agreement for Restricted
Stock Award or Restricted Stock Unit Award shall set forth the extent to which
the Participant shall have the right to retain Restricted Stock or Restricted
Stock Units following termination of the Participant's employment with or
provision of services to the Company (including service as a director of the
Company) and its Subsidiaries.
7.5.    Issuance of Shares. Any Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of a stock certificate or certificates,
which certificate or certificates shall be held by the Company. Such certificate
or certificates shall be registered in the name of the Participant and shall
bear an appropriate legend referring to the restrictions applicable to such
Restricted Stock.
8.    OTHER SHARE-BASED AWARDS
8.1.    Grants. Other Awards of Shares and other Awards that are valued in whole
or in part by reference to, or are otherwise based on, Shares or other property
("Other Share-Based Awards") may be granted hereunder to Participants either
alone or in addition to other Awards granted under the Plan. Other Share-Based
Awards shall also be available as a form of payment of other Awards granted
under the Plan and other earned cash-based compensation. Other Share-Based
Awards shall be subject to vesting restrictions imposed by the Committee
covering a period of time specified by the Committee, unless the Committee
applies Article 10 to the Award as provided in Section 10.1.
8.2.    Award Agreements. The terms of Other Share-Based Award granted under the
Plan shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan. The terms of
such Awards need not be the same with respect to each Participant.
Notwithstanding the provisions of this Section, Dividend Equivalents and cash
and any property distributed as a dividend or otherwise with respect to the
number of Shares covered by a Other Share-Based Award shall be subject to
restrictions and risk

 
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of forfeiture to the same extent as the Shares covered by a Other Share-Based
Award with respect to which such cash, Shares or other property has been
distributed.
8.3.    Effect of Termination of Employment. The Award Agreement for an Other
Share-Based Award shall set forth the extent to the Award will be retained
following termination of the Participant's employment with or provision of
services to the Company (including service as a director of the Company) and its
Subsidiaries.
8.4.    Payment. Except as may be provided in an Award Agreement, Other
Share-Based Awards may be paid in cash, Shares, other property, or any
combination thereof, in the sole discretion of the Committee. Other Share-Based
Awards may be paid in a lump sum or in installments or, in accordance with
procedures established by the Committee, on a deferred basis subject to the
requirements of Section 409A of the Code.
9.    PERFORMANCE AWARDS
9.1.    Grants. Performance Awards in the form of Performance Cash or
Performance Shares, as determined by the Committee in its sole discretion, may
be granted hereunder to Participants, for no consideration or for such minimum
consideration as may be required by applicable law, either alone or in addition
to other Awards granted under the Plan. The performance goals to be achieved for
each Performance Period shall be conclusively determined by the Committee and
may be based upon criteria set forth in Section 10.2.
9.2.    Award Agreements. The terms of any Performance Award granted under the
Plan shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan, including
whether such Awards shall have Dividend Equivalents. The terms of Performance
Awards need not be the same with respect to each Participant.
9.3.    Terms and Conditions. The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award. The amount of the
Award to be distributed shall be conclusively determined by the Committee.
9.4.    Effect of Termination of Employment. The Award Agreement for Performance
Awards shall set forth the extent to which the Participant shall have the right
to retain Performance Awards following termination of the Participant's
employment with or provision of services to the Company and its Subsidiaries.
9.5.    Payment. Except as provided in Article 11 or as may be provided in an
Award Agreement, Performance Awards will be paid only after the end of the
relevant Performance Period. Performance Awards may be paid in cash, Shares,
other property, or any combination thereof, in the sole discretion of the
Committee. Performance Awards may be paid in a lump sum or in installments
following the close of the Performance Period or, in accordance with procedures
established by the Committee, on a deferred basis subject to the requirements of
Section 409A of the Code.

 
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10.    CODE SECTION 162(m) PROVISIONS
10.1.    Covered Employees. Notwithstanding any other provision of the Plan, if
the Committee determines at the time a Restricted Stock Award, a Restricted
Stock Unit Award, a Performance Award or an Other Share-Based Award is granted
to a Participant who is, or is likely to be, as of the end of the tax year in
which the Company would claim a tax deduction in connection with such Award, a
Covered Employee and the Committee determines that such Award should qualify as
a 162(m) Award, then the Committee may provide that this Article 10 is
applicable to such Award.
10.2.    Performance Criteria. If the Committee determines that a Restricted
Stock Award, a Restricted Stock Unit, a Performance Award or an Other
Share-Based Award is intended to be subject to this Article 10, the lapsing of
restrictions thereon and the distribution of cash, Shares or other property
pursuant thereto, as applicable, shall be subject to the achievement of one or
more objective performance goals established by the Committee, which shall be
based on the attainment of specified levels of one or any combination of the
following: net sales; booking value of contract awards; year-end backlog; days
sales outstanding; revenue; revenue growth or product revenue growth; operating
income (before or after taxes); pre- or after-tax income (before or after
allocation of corporate overhead and bonus); earnings per share; net income
(before or after taxes); return on equity; total shareholder return; return on
assets or net assets; appreciation in and/or maintenance of the price of the
Shares or any other publicly-traded securities of the Company; market share;
gross profits; earnings (including earnings before taxes, earnings before
interest and taxes or earnings before interest, taxes, depreciation and
amortization); economic value-added models or equivalent metrics; comparisons
with various stock market indices; reductions in costs; cash flow or cash flow
per share (before or after dividends); return on capital (including return on
total capital or return on invested capital); cash flow return on investment;
improvement in or attainment of expense levels or working capital levels;
operating margins, gross margins or cash margin; year-end cash; debt reductions;
stockholder equity; market share; regulatory achievements; and implementation,
completion or attainment of measurable objectives with respect to research,
development, products or projects, production volume levels, acquisitions and
divestitures and recruiting and maintaining personnel. Such performance goals
also may be based solely by reference to the Company's performance or the
performance of a Subsidiary, division, business segment or business unit of the
Company, or based upon the relative performance of other companies or upon
comparisons of any of the indicators of performance relative to other companies.
The Committee may also exclude charges related to an event or occurrence which
the Committee determines should appropriately be excluded, including
(a) restructurings, discontinued operations, extraordinary items, and other
unusual or non-recurring charges, (b) an event either not directly related to
the operations of the Company or not within the reasonable control of the
Company's management, or (c) the cumulative effects of tax or accounting changes
in accordance with U.S. generally accepted accounting principles. Such
performance goals shall be set by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Section
162(m) of the Code, and the regulations thereunder.

 
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10.3.    Adjustments. Notwithstanding any provision of the Plan (other than
Article 11), with respect to any Restricted Stock Award, Restricted Stock Unit
Award, Performance Award or Other Share-Based Award that is subject to this
Section 10, the Committee may adjust downwards, but not upwards, the amount
payable pursuant to such Award, and the Committee may not waive the achievement
of the applicable performance goals, except in the case of the death or
disability of the Participant or as otherwise determined by the Committee in
special circumstances.
10.4.    Restrictions. The Committee shall have the power to impose such other
restrictions on Awards subject to this Article as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section 162(m) of the
Code.
10.5.    Limitations on Grants to Individual Participants. Subject to adjustment
as provided in Section 12.2, no Participant may be granted (i) Options or Stock
Appreciation Rights during any 12-month period with respect to more than 500,000
Shares or (ii) Restricted Stock Awards, Restricted Stock Unit Awards,
Performance Awards and/or Other Share-Based Awards in any 12-month period that
are intended to comply with the performance-based exception under Code Section
162(m) and are denominated in Shares with respect to more than 500,000 Shares
(the "Limitations"). In addition to the foregoing, the maximum dollar value that
may be earned by any Participant in any 12-month period with respect to
Performance Awards that are intended to comply with the performance-based
exception under Code Section 162(m) and are denominated in cash is $5,000,000.
If an Award is cancelled, the cancelled Award shall continue to be counted
toward the applicable Limitations.
11.    CHANGE IN CONTROL PROVISIONS
11.1.    Treatment of Awards. (%3) Unless otherwise provided in an Award
Agreement, in the event of a Change in Control of the Company in which the
successor company assumes or replaces an Option, Stock Appreciation Right,
Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Other
Share-Based Award, (or in which the Company is the ultimate parent corporation
and continues the Award), if a Participant's employment with such successor
company (or a subsidiary thereof) terminates (other than a termination by the
Company for cause (as defined in an Award Agreement) within 24 months following
such Change in Control (or such other period set forth in the Award Agreement,
including prior thereto if applicable): (i) Options and Stock Appreciation
Rights outstanding as of the date of such termination of employment will
immediately vest, become fully exercisable, and may thereafter be exercised for
24 months, (ii) restrictions, limitations and other conditions on Restricted
Stock and Restricted Stock Units shall lapse and the Restricted Stock and
Restricted Stock Units shall become free of all restrictions, limitations and
conditions and become fully vested, (iii) all Performance Awards shall be
considered to be earned and payable (pro rata based on the portion of
Performance Period completed as of the date of the Change in Control), and any
other restriction shall lapse and such Performance Awards shall be immediately
settled or distributed, and (iv) the restrictions, limitations and other
conditions applicable to any Other Share-Based Awards shall lapse, and such
Other Share-Based Awards shall become free of all

 
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restrictions, limitations and conditions and become fully vested and
transferable to the full extent of the original grant. For the purposes of this
Section 12.1, an Option, Stock Appreciation Right, Restricted Stock Award,
Restricted Stock Unit Award, Performance Award or Other Share-Based Award shall
be considered assumed or replaced if following the Change in Control the assumed
or replacement award confers the right to purchase or receive, for each Share
subject to the Option, Stock Appreciation Right, Restricted Stock Award,
Restricted Stock Unit Award, Performance Award or Other Share-Based Award
immediately prior to the Change in Control, the consideration (whether stock,
cash or other securities or property) received in the transaction constituting a
Change in Control by holders of Shares for each Share held on the effective date
of such transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares).
(a)    Unless otherwise provided in an Award Agreement, in the event of any
Change in Control of the Company, to the extent the successor company does not
assume or replace an Option, Stock Appreciation Right, Restricted Stock Award,
Restricted Stock Unit Award, Performance Award or Other Share-Based Award (or in
which the Company is the ultimate parent corporation and does not continue the
Award): (i) those Options and Stock Appreciation Rights outstanding as of the
date of the Change in Control that are not assumed or replaced shall immediately
vest and become fully exercisable, (ii) restrictions, limitations and other
conditions applicable to Restricted Stock and Restricted Stock Units that are
not assumed or replaced shall lapse and the Restricted Stock and Restricted
Stock Units shall become free of all restrictions, limitations and conditions
and become fully vested, (iii) all Performance Awards shall be considered to be
earned and payable (pro rata based on the portion of Performance Period
completed as of the date of the Change in Control), and any other restriction
shall lapse and such Performance Awards shall be immediately settled or
distributed, and (iv) the restrictions, limitations and other conditions
applicable to any Other Share-Based Awards shall lapse, and such Other
Share-Based Awards shall become free of all restrictions, limitations and
conditions and become fully vested and transferable to the full extent of the
original grant.
(b)    Notwithstanding the foregoing, the Committee, in its discretion, may
determine that, upon the occurrence of a Change in Control of the Company, each
Option and Stock Appreciation Right outstanding shall terminate within a
specified number of days after notice to the Participant, and/or that each
Option and Stock Appreciation Right shall be cancelled and in consideration for
such cancellation each Participant shall receive, with respect to each Share
subject to such Option or Stock Appreciation Right, an amount equal to the
excess, if any, of the Fair Market Value of such Share immediately prior to the
occurrence of such Change in Control over the exercise price per share of such
Option and/or Stock Appreciation Right; such amount to be payable in cash, in
one or more kinds of stock or property (including the stock or property, if any,
payable in the transaction) or in a combination thereof, as the Committee, in
its discretion, shall determine; provided, that if the exercise price per share
of such Option and/or Stock Appreciation Right equals or exceeds the Fair Market
Value of such Share immediately prior to the occurrence of such Change in
Control, then such Option and/or Stock Appreciation Right may be cancelled
without the payment of consideration.

 
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11.2.    Change in Control. For purposes of the Plan, Change in Control means
the occurrence of any of the following events: (i) sale of all or substantially
all of the assets of the Company to any Person or group of Persons which is not
Tiptree Financial Partners L.P. or its Affiliate; (ii) any Person or group of
Persons (other than a group consisting solely of Tiptree Financial Partners L.P.
or its Affiliates) is or shall become the "beneficial owner" (as defined in Rule
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more
than 50% of the voting stock of the Company then outstanding or (iii) a merger
or consolidation pursuant to which any Person or group of Persons (other than a
group consisting solely of Tiptree Financial Partners L.P. or its Affiliates)
becomes the "beneficial owner" (as defined in clause (ii) above) of more than
50% of the voting stock of the Company or the surviving or resulting entity
immediately following the consummation of such transaction.
12.    GENERALLY APPLICABLE PROVISIONS
12.1.    Amendment and Termination of the Plan. The Board may, from time to
time, alter, amend, suspend or terminate the Plan as it shall deem advisable,
subject to any requirement for stockholder approval imposed by applicable law,
including the rules and regulations of the principal securities market on which
the Shares are traded; and further provided that the Board may not, without the
approval of the Company's stockholders, amend the Plan to (a) increase the
number of Shares that may be the subject of Awards under the Plan (except for
adjustments pursuant to Section 12.2), (b) expand the types of awards available
under the Plan, (c) materially expand the class of persons eligible to
participate in the Plan, (d) amend any provision of Section 5.3 or Section
6.2(f) to eliminate the requirements relating to minimum exercise price, minimum
grant price and stockholder approval or (e) increase the maximum permissible
term of any Option specified by Section 5.4 or the maximum permissible term of a
Stock Appreciation Right specified by Section 6.2(d), or (f) amend any provision
of Section 10.5. Unless required by applicable law, rule or regulation, no
amendments to, or suspension or termination of, the Plan shall impair the rights
of a Participant in any material respect under any Award previously granted
without such Participant's consent.
12.2.    Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other
property, other than a regular cash dividend), stock split, reverse stock split,
spin-off or similar transaction or other change in corporate structure affecting
the Shares or the value thereof, such adjustments and other substitutions shall
be made to the Plan and to Awards as the Committee deems equitable or
appropriate to prevent dilution or enlargement of the rights of Participants
under the Plan, taking into consideration the accounting and tax consequences,
including such adjustments in the aggregate number, class and kind of securities
that may be delivered under the Plan, in the aggregate or to any one
Participant, the Limitations, the maximum number of Shares that may be issued as
incentive stock options and, in the number, class, kind and option or exercise
price of securities subject to outstanding Awards granted under the Plan
(including, if the Committee deems appropriate, the substitution of similar
options to purchase the shares of, or other awards denominated in the shares of,
another company) as the Committee may determine to be appropriate provided,
however, that the number of Shares subject to any Award shall always be a whole
number.

 
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12.3.    Transferability of Awards. Except as provided below, no Award and no
Shares subject to Awards described in Article 8 that have not been issued or as
to which any applicable restriction, performance or deferral period has not
lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered,
other than by will or the laws of descent and distribution, and such Award may
be exercised during the life of the Participant only by the Participant or the
Participant's guardian or legal representative. To the extent and under such
terms and conditions as determined by the Committee, a Participant may assign or
transfer an Award without consideration (each transferee thereof, a "Permitted
Assignee") to (i) the Participant's spouse, children or grandchildren (including
any adopted and step children or grandchildren), parents, grandparents or
siblings, (ii) to a trust for the benefit of one or more of the Participant or
the persons referred to in clause (i), (iii) to a partnership, limited liability
company or corporation in which the participant or the Persons referred to in
clause (i) are the only partners, members or shareholders or (iv) for charitable
donations; provided that such Permitted Assignee shall be bound by and subject
to all of the terms and conditions of the Plan and the Award Agreement relating
to the transferred Award and shall execute an agreement satisfactory to the
Company evidencing such obligations; and provided further that such Participant
shall remain bound by the terms and conditions of the Plan. The Company shall
cooperate with any Permitted Assignee and the Company's transfer agent in
effectuating any transfer permitted under this Section.
12.4.    Termination of Employment. The Committee shall determine and set forth
in each Award Agreement whether any Awards granted in such Award Agreement will
continue to be exercisable, and the terms of such exercise, on and after the
date that a Participant ceases to be employed by or to provide services to the
Company or any Subsidiary (including as a Director), whether by reason of death,
disability, voluntary or involuntary termination of employment or services, or
otherwise. The date of termination of a Participant's employment or services
will be determined by the Committee, which determination will be final.
12.5.    Deferral; Dividend Equivalents. The Committee shall be authorized to
establish procedures pursuant to which the payment of any Award may be deferred.
Subject to the provisions of the Plan and any Award Agreement, the recipient of
an Award (including any deferred Award), other than an Option or Stock
Appreciation Right, may, if so determined by the Committee, be entitled to
receive, currently or on a deferred basis amounts equivalent to cash, stock or
other property dividends on Shares ("Dividend Equivalents") with respect to the
number of Shares covered by the Award, as determined by the Committee, in its
sole discretion. The Committee may provide the Dividend Equivalents (if any)
shall be deemed to have been reinvested in additional Shares or otherwise
reinvested and may provide that such amounts and Dividend Equivalents are
subject to the same vesting or performance conditions as the underlying Award.
Notwithstanding the foregoing, Dividend Equivalents credited in connection with
an Award that vests based on the achievement of performance goals shall be
subject to restrictions and risk of forfeiture to the same extent as the Award
with respect to which such cash, stock or other property has been distributed.
13.    MISCELLANEOUS

 
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13.1.    Tax Withholding. The Company shall have the right to make all payments
or distributions pursuant to the Plan to a Participant (or a Permitted Assignee
thereof) (any such person, a "Payee") net of any applicable federal, state and
local taxes required to be paid or withheld as a result of (a) the grant of any
Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the
delivery of Shares or cash, (d) the lapse of any restrictions in connection with
any Award or (e) any other event occurring pursuant to the Plan. The Company or
any Subsidiary shall have the right to withhold from wages or other amounts
otherwise payable to such Payee such withholding taxes as may be required by
law, or to otherwise require the Payee to pay such withholding taxes. If the
Payee shall fail to make such tax payments as are required, the Company or its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to such Payee or to take
such other action as may be necessary to satisfy such withholding obligations.
The Committee shall be authorized to establish procedures for election by
Participants to satisfy such obligation for the payment of such taxes by
tendering previously acquired Shares (either actually or by attestation, valued
at their then Fair Market Value), or by directing the Company to retain Shares
(up to the Participant's minimum required tax withholding rate or such other
rate that will not trigger a negative accounting impact) otherwise deliverable
in connection with the Award.
13.2.    Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor
the grant of an Award hereunder shall confer upon any Employee or Director the
right to continue in the employment or service of the Company or any Subsidiary
or affect any right that the Company or any Subsidiary may have to terminate the
employment or service of (or to demote or to exclude from future Awards under
the Plan) any such Employee or Director at any time for any reason. Except as
specifically provided by the Committee, the Company shall not be liable for the
loss of existing or potential profit from an Award granted in the event of
termination of an employment or other relationship. No Employee or Participant
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Employees or Participants under the
Plan.
13.3.    Substitute Awards. Notwithstanding any other provision of the Plan, the
terms of Substitute Awards may vary from the terms set forth in the Plan to the
extent the Committee deems appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.
13.4.    Forfeiture Events. (%3) 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 or performance conditions of an Award. Such events may include, but
shall not be limited to, termination of employment for cause, termination of the
Participant's provision of services to the Company and/or a Subsidiary,
violation of material Company, and/or Subsidiary policies, breach of
noncompetition, non-solicitation, confidentiality, or other restrictive
covenants that may apply to the Participant, or other conduct by the Participant
that is detrimental to the business or reputation of the Company, and/or its
Subsidiaries.

 
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(a)    If the Company is required to file an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, if the Participant
knowingly or recklessly engaged in the misconduct, or knowingly or recklessly
failed to prevent or report the misconduct, or if the Participant is one of the
individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the
amount of any payment in settlement of an Award earned or accrued for such
period as determined by the Committee following the first public issuance or
filing with the United States Securities and Exchange Commission (whichever just
occurred) of the financial document reflecting such material noncompliance.
13.5.    Stop Transfer Orders. All certificates for Shares delivered under the
Plan pursuant to any Award shall be subject to such stop-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Shares are then listed, and any applicable
federal or state securities law, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such
restrictions.
13.6.    Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services performed or to be performed for the Company or any
Subsidiary, division or business unit of the Company. Any income or gain
realized pursuant to Awards under the Plan constitutes a special incentive
payment to the Participant and shall not be taken into account, to the extent
permissible under applicable law, as compensation for purposes of any of the
employee benefit plans of the Company or any Subsidiary except as may be
determined by the Committee or by the Board or board of directors of the
applicable Subsidiary.
13.7.    Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
13.8.    Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction or by reason of a change in law or regulation, such provision shall
(a) be deemed limited to the extent that such court of competent jurisdiction
deems it lawful, valid and/or enforceable and as so limited shall remain in full
force and effect, and (b) not affect any other provision of the Plan or part
thereof, each of which shall remain in full force and effect. If the making of
any payment or the provision of any other benefit required under the Plan shall
be held unlawful or otherwise invalid or unenforceable by a court of competent
jurisdiction, such unlawfulness, invalidity or unenforceability shall not
prevent any other payment or benefit from being made or provided under the Plan,
and if the making of any payment in full or the provision of any other benefit
required under the Plan in full would be unlawful or otherwise invalid or
unenforceable, then such unlawfulness, invalidity or unenforceability shall not
prevent such payment or benefit from being made or provided in part, to the
extent that it would not be unlawful, invalid or

 
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unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under the Plan.
13.9.    Construction. As used in the Plan, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
13.10.    Unfunded Status of the Plan. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant by the Company, nothing contained herein shall give any
such Participant any rights that are greater than those of a general unsecured
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver the Shares or payments in lieu of or with respect to Awards
hereunder; provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
13.11.    Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of New York, without
reference to principles of conflict of laws, and construed accordingly.
13.12.    Effective Date of Plan; Termination of Plan. The Plan shall be
effective on the date of the approval of the Plan by the Board. Awards may be
granted under the Plan at any time and from time to time on or prior to the
tenth anniversary of the effective date of the Plan, on which date the Plan will
expire except as to Awards then outstanding under the Plan. Such outstanding
Awards shall remain in effect until they have been exercised or terminated, or
have expired.
13.13.    Compliance with Section 409A of the Code. This Plan is intended to
comply and shall be administered in a manner that is intended to comply with
Section 409A of the Code and shall be construed and interpreted in accordance
with such intent. To the extent that an Award or the payment, settlement or
deferral thereof is subject to Section 409A of the Code, the Award shall be
granted, paid, settled or deferred in a manner that will comply with
Section 409A of the Code, including regulations or other guidance issued with
respect thereto, except as otherwise determined by the Committee. Any provision
of this Plan that would cause the grant of an Award or the payment, settlement
or deferral thereof to fail to satisfy Section 409A of the Code shall be amended
to comply with Section 409A of the Code on a timely basis, which may be made on
a retroactive basis, in accordance with regulations and other guidance issued
under Section 409A of the Code.
13.14.    No Registration Rights; No Right to Settle in Cash. The Company has no
obligation to register with any governmental body or organization any of (a) the
offer or issuance of any Award, (b) any Shares issuable upon the exercise of any
Award, or (c) the sale of any Shares issued upon exercise of any Award,
regardless of whether the Company in fact undertakes to register any of the
foregoing. In particular, in the event that any of (x) any offer or issuance of
any Award, (y) any Shares issuable upon exercise of any Award, or (z) the sale
of any Shares

 
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issued upon exercise of any Award are not registered with any governmental body
or organization, the Company will not under any circumstance be required to
settle its obligations, if any, under this Plan in cash.
13.15.    Captions. The captions in the Plan are for convenience of reference
only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.

 
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