Exhibit 10.3
 
JAVELIN MORTGAGE INVESTMENT CORP.
 
2012 STOCK INCENTIVE PLAN
 
1.      ESTABLISHMENT, EFFECTIVE DATE AND TERM
 
JAVELIN Mortgage Investment Corp., a Maryland corporation hereby establishes the
JAVELIN Mortgage Investment Corp. 2012 Stock Incentive Plan.  The Effective Date
of the Plan shall be the later of: (i) the date the Plan was approved by the
Board, and (ii) the date the Plan was approved by shareholders of JAVELIN in
accordance with the laws of the State of Maryland.
 
2.      PURPOSE
 
The purpose of the Plan is to enable JAVELIN to attract, retain, reward and
motivate Eligible Individuals by providing them with an opportunity to acquire
or increase a proprietary interest in JAVELIN and to incentivize them to expend
maximum effort for the growth and success of the Company, so as to strengthen
the mutuality of the interests between the Eligible Individuals and the
shareholders of JAVELIN.
 
3.      ELIGIBILITY
 
Awards may be granted under the Plan to any Eligible Individual, as determined
by the Committee from time to time, on the basis of their importance to the
business of the Company pursuant to the terms of the Plan.
 
4.      ADMINISTRATION
 
(a)           Committee.  The Plan shall be administered by the Committee, which
shall have the full power and authority to take all actions, and to make all
determinations not inconsistent with the specific terms and provisions of the
Plan deemed by the Committee to be necessary or appropriate to the
administration of the Plan, any Award granted or any Award Agreement entered
into hereunder.  The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award Agreement in the manner
and to the extent it shall deem expedient to carry the Plan into effect as it
may determine in its sole discretion.  The decisions by the Committee shall be
final, conclusive and binding with respect to the interpretation and
administration of the Plan, any Award or any Award Agreement entered into under
the Plan.
 
(b)           Delegation to Officers or Employees.  The Committee may designate
officers or employees of the Company to assist the Committee in the
administration of the Plan.  The Committee may delegate authority to officers or
employees of the Company to grant Awards and execute Award Agreements or other
documents on behalf of the Committee in connection with the administration of
the Plan, subject to whatever limitations or restrictions the Committee may
impose and in accordance with applicable law.
 
 
 

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(c)           Designation of Advisors.  The Committee may designate professional
advisors to assist the Committee in the administration of the Plan.  The
Committee may employ such legal counsel, consultants, and agents as it may deem
desirable for the administration of the Plan and may rely upon any advice and
any computation received from any such counsel, consultant, or agent.  The
Company shall pay all expenses and costs incurred by the Committee for the
engagement of any such counsel, consultant, or agent.
 
(d)           Participants Outside the U.S.  In order to  conform with the
provisions of local laws and regulations in foreign countries in which the
Company operates, the Committee shall have the sole discretion to (i) modify the
terms and conditions of the Awards granted under the Plan to Eligible
Individuals located outside the United States; (ii) establish subplans with such
modifications as may be necessary or advisable under the circumstances present
by local laws and regulations; and (iii) take any action which it deems
advisable to comply with or otherwise reflect any necessary governmental
regulatory procedures, or to obtain any exemptions or approvals necessary with
respect to the Plan or any subplan established hereunder.
 
(e)           Liability and Indemnification.  No Covered Individual shall be
liable for any action or determination made in good faith with respect to the
Plan, any Award granted hereunder or any Award Agreement entered into
hereunder.  The Company shall, to the maximum extent permitted by applicable law
and the Articles of Incorporation and Bylaws of JAVELIN, indemnify and hold
harmless each Covered Individual against any cost or expense (including
reasonable attorney fees reasonably acceptable to the Company) or liability
(including any amount paid in settlement of a claim with the approval of the
Company), and amounts advanced to such Covered Individual necessary to pay the
foregoing at the earliest time and to the fullest extent permitted, arising out
of any act or omission to act in connection with the Plan, any Award granted
hereunder or any Award Agreement entered into hereunder.  Such indemnification
shall be in addition to any rights of indemnification such individuals may have
under applicable law or under the Articles of Incorporation or Bylaws of
JAVELIN.  Notwithstanding anything else herein, this indemnification will not
apply to the actions or determinations made by a Covered Individual with regard
to Awards granted to such Covered Individual under the Plan or arising out of
such Covered Individual's own fraud or bad faith.
 
5.      SHARES OF COMMON STOCK SUBJECT TO PLAN
 
(a)           Shares Available for Awards.  The Common Stock that may be issued
pursuant to Awards granted under the Plan shall be treasury shares or authorized
but unissued shares of the Common Stock.  The total number of shares of Common
Stock that may be issued pursuant to Awards granted under the Plan shall be
equal to 3% of the issued and outstanding shares of Common Stock (on a
fully-diluted basis) at the time of the grant of the Award (other than shares of
Common Stock issued or subject to Awards made pursuant to the Plan)..
 
(b)           Certain Limitations on Specific Types of Awards.  The granting of
Awards under this Plan shall be subject to the following limitations:
 
(i)           With respect to the shares of Common Stock reserved pursuant to
this Section, one hundred percent (100%) of such shares may be subject to grants
of Incentive Stock Options;
 
 
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(ii)           With respect to the shares of Common Stock reserved pursuant to
this Section, a maximum of one hundred percent (100%) of such shares may be
issued in connection with Awards, other than Stock Options and Stock
Appreciation Rights, that are settled in Common Stock;
 
(iii)           With respect to the shares of Common Stock reserved pursuant to
this Section, a maximum of one million (1,000,000) of such shares may be subject
to grants of Options or Stock Appreciation Rights to any one Eligible Individual
during any one fiscal year;
 
(iv)           With respect to the shares of Common Stock reserved pursuant to
this Section, a maximum of one million (1,000,000) of such shares may be subject
to grants of Performance Shares, Restricted Stock, and Awards of Common Stock to
any one Eligible Individual during any one fiscal year; and
 
(v)            The maximum value at Grant Date of grants of Performance Units
which may be granted to any one Eligible Individual during any one fiscal year
shall be one million dollars ($1,000,000).
 
(c)           Reduction of Shares Available for Awards.  Upon the granting of an
Award, the number of shares of Common Stock available under this Section hereof
for the granting of further Awards shall be reduced as follows:
 
(i)            In connection with the granting of an Option or Stock
Appreciation Right, the number of shares of Common Stock shall be reduced by the
number of shares of Common Stock subject to the Option or Stock Appreciation
Right;
 
(ii)            In connection with the granting of an Award that is settled in
Common Stock, other than the granting of an Option or Stock Appreciation Right,
the number of shares of Common Stock shall be reduced by the number of shares of
Common Stock subject to the Award; and
 
(iii)           Awards settled in cash shall not count against the total number
of shares of Common Stock available to be granted pursuant to the Plan.
 
(d)           Cancelled, Forfeited, or Surrendered Awards.  Notwithstanding
anything to the contrary in this Plan, if any Award is cancelled,  forfeited or
terminated for any reason prior to exercise or becoming vested in full, the
shares of Common Stock that were subject to such Award shall, to the extent
cancelled, forfeited or terminated, immediately become available for future
Awards granted under the Plan as if said Award had never been granted; provided,
however, that any shares of Common Stock subject to an Award, other than a Stock
Appreciation Right,  which is cancelled, forfeited or terminated in order to pay
the Exercise Price, purchase price or any taxes or tax withholdings on an Award
shall not be available for future Awards granted under the Plan.  Any Common
Stock subject to a Stock Appreciation Right which is not issued upon settling
such Stock Appreciation Right shall be available for future Awards granted under
the Plan.
 
 
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(e)           Recapitalization.  If the outstanding shares of Common Stock are
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of JAVELIN by reason of any recapitalization,
reclassification, reorganization, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution payable in
capital stock of JAVELIN or other increase or decrease in such shares effected
without receipt of consideration by JAVELIN occurring after the Effective Date,
an appropriate and proportionate adjustment shall be made by the Committee to
(i) the aggregate number and kind of shares of Common Stock available under the
Plan, (ii) the aggregate limit of the number of shares of Common Stock that may
be granted pursuant to an Incentive Stock Option, (iii) the aggregate limit of
the number of shares of Common Stock that may be issued in connection with
Awards, other than Stock Options and Stock Appreciation Rights, that are settled
in Common Stock, (iv) the limits on the number of shares of Common Stock that
may be granted to an Eligible Employee in any one fiscal year, (v) the
calculation of the reduction or increase of shares of Common Stock available
under the Plan, (vi) the number and kind of shares of Common Stock issuable upon
exercise (or vesting) of outstanding Awards granted under the Plan; and/or (vii)
the Exercise Price of outstanding Options granted under the Plan.  No fractional
shares of Common Stock or units of other securities shall be issued pursuant to
any such adjustment under this Section 5(e), and any fractions resulting from
any such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share or unit.  Any adjustments made under this Section 5(e) with
respect to any Incentive Stock Options must be made in accordance with Code
Section 424.
 
6.      OPTIONS
 
(a)           Grant of Options. Subject to the terms and conditions of the Plan,
the Committee may grant to such Eligible Individuals as the Committee may
determine, Options to purchase such number of shares of Common Stock and on such
terms and conditions as the Committee shall determine in its sole and absolute
discretion. Each grant of an Option shall satisfy the requirements set forth in
this Section.
 
(b)           Type of Options. Each Option granted under the Plan may be
designated by the Committee, in its sole discretion, as either (i) an Incentive
Stock Option, or (ii) a Non-Qualified Stock Option.  Options designated as
Incentive Stock Options that fail to continue to meet the requirements of Code
Section 422 shall be re-designated as Non-Qualified Stock Options automatically
on the date of such failure to continue to meet such requirements without
further action by the Committee.  In the absence of any designation, Options
granted under the Plan will be deemed to be Non-Qualified Stock Options.
 
(c)           Exercise Price.  Subject to the limitations set forth in the Plan
relating to Incentive Stock Options, the Exercise Price of an Option shall be
fixed by the Committee and stated in the respective Award Agreement, provided
that the Exercise Price of the shares of Common Stock subject to such Option may
not be less than Fair Market Value of such Common Stock on the Grant Date, or if
greater, the par value of the Common Stock.
 
 
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(d)           Limitation on Repricing.  Unless such action is approved by
JAVELIN's shareholders in accordance with applicable law: (i) no outstanding
Option granted under the Plan may be amended to provide an Exercise Price that
is lower than the then-current Exercise Price of such outstanding Option (other
than adjustments to the Exercise Price pursuant to Sections 5(e) and 11); (ii)
the Committee may not cancel any outstanding Option and grant in substitution
therefore new Awards under the Plan covering the same or a different number of
shares of Common Stock and having an Exercise Price lower than the then-current
Exercise Price of the cancelled Option (other than adjustments to the Exercise
Price pursuant to Sections 5(e) and 11); and (iii) the Committee may not
authorize the repurchase of an outstanding Option which has an Exercise Price
that is higher than the then-current fair market value of the Common Stock
(other than adjustments to the Exercise Price pursuant to Sections 5(e) and 11).
 
(e)           Limitation on Option Period.  Subject to the limitations set forth
in the Plan relating to Incentive Stock Options and unless otherwise provided by
the Committee, Options granted under the Plan and all rights to purchase Common
Stock thereunder shall terminate no later than the tenth anniversary of the
Grant Date of such Options, or on such earlier date as may be stated in the
Award Agreement relating to such Option.  In the case of Options expiring prior
to the tenth anniversary of the Grant Date, the Committee may in its discretion,
at any time prior to the expiration or termination of said Options, extend the
term of any such Options for such additional period as it may determine, but in
no event beyond the tenth anniversary of the Grant Date thereof.
 
(f)           Limitations on Incentive Stock Options.  Notwithstanding any other
provisions of the Plan, the following provisions shall apply with respect to
Incentive Stock Options granted pursuant to the Plan.
 
(i)           Limitation on Grants.  Incentive Stock Options may only be granted
to Section 424 Employees.  The aggregate Fair Market Value (determined at the
time such Incentive Stock Option is granted) of the shares of Common Stock for
which any individual may have Incentive Stock Options which first become vested
and exercisable in any calendar year (under all incentive stock option plans of
the Company) shall not exceed $100,000.  Options granted to such individual in
excess of the $100,000 limitation, and any Options issued subsequently which
first become vested and exercisable in the same calendar year, shall
automatically be treated as Non-Qualified Stock Options.
 
(ii)           Minimum Exercise Price.  In no event may the Exercise Price of a
share of Common Stock subject an Incentive Stock Option be less than 100% of the
Fair Market Value of such share of Common Stock on the Grant Date.
 
(iii)           Ten Percent Shareholder.  Notwithstanding any other provision of
the Plan to the contrary, in the case of Incentive Stock Options granted to a
Section 424 Employee who, at the time the Option is granted, owns (after
application of the rules set forth in Code Section 424(d)) stock possessing more
than ten percent of the total combined voting power of all classes of stock of
JAVELIN, such Incentive Stock Options (i) must have an Exercise Price per share
of Common Stock that is at least 110% of the Fair Market Value as of the Grant
Date of a share of Common Stock, and (ii) must not be exercisable after the
fifth anniversary of the Grant Date.
 
 
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(g)           Vesting Schedule and Conditions.  No Options may be exercised
prior to the satisfaction of the conditions and vesting schedule provided for in
the Award Agreement relating thereto or in the Plan.
 
(h)           Exercise.  When the conditions to the exercise of an Option have
been satisfied, the Participant may exercise the Option only in accordance with
the following provisions.  The Participant shall deliver to JAVELIN a written
notice stating that the Participant is exercising the Option and specifying the
number of shares of Common Stock which are to be purchased pursuant to the
Option, and such notice shall be accompanied by payment in full of the Exercise
Price of the shares for which the Option is being exercised, by one or more of
the methods provided for in the Plan.  Unless otherwise provided by the
Committee, said notice must be delivered to JAVELIN at its principal office and
addressed to the attention of Chief Financial Officer.  An attempt to exercise
any Option granted hereunder other than as set forth in the Plan shall be
invalid and of no force and effect.
 
(i)            Payment.  Payment of the Exercise Price for the shares of Common
Stock purchased pursuant to the exercise of an Option shall be made by one of
the following methods:
 
(i)            by cash, certified or cashier’s check, bank draft or money order;
 
(ii)           through the delivery to JAVELIN of shares of Common Stock which
have been previously owned by the Participant for the requisite period necessary
to avoid a charge to JAVELIN's earnings for financial reporting purposes; such
shares shall be valued, for purposes of determining the extent to which the
Exercise Price has been paid thereby, at their Fair Market Value on the date of
exercise; without limiting the foregoing, the Committee may require the
Participant to furnish an opinion of counsel acceptable to the Committee to the
effect that such delivery would not result in JAVELIN incurring any liability
under Section 16(b) of the Exchange Act;
 
(iii)           through a "cashless exercise sale and remittance procedure"
pursuant to which the Participant shall concurrently provide irrevocable
instructions (A) to a brokerage firm approved by the Committee to effect the
immediate sale of the purchased shares and remit to JAVELIN, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all applicable
federal, state and local income, employment, excise, foreign and other taxes
required to be withheld by the Company by reason of such exercise and (B) to
JAVELIN to deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale; or
 
(iv)           by any other method which the Committee, in its sole and absolute
discretion and to the extent permitted by applicable law, may permit.
 
 
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(j)           Termination of Employment, Disability or Death.  Unless otherwise
provided in an Award Agreement, upon the termination of the employment or other
service of a Participant with Company for any reason, all of the Participant's
outstanding Options (whether vested or unvested) shall be subject to the rules
of this paragraph.  Upon such termination, the Participant's unvested Options
shall expire.  Notwithstanding anything in this Plan to the contrary, the
Committee may provide, in its sole and absolute discretion, that following the
termination of employment or other service of a Participant with the Company for
any reason (i) any unvested Options held by the Participant that vest solely
upon a future service requirement shall vest in whole or in part, at any time
subsequent to such termination of employment or other service, and or (ii) a
Participant or the Participant's estate, devisee or heir at law (whichever is
applicable), may exercise an Option, in whole or in part, at any time subsequent
to such termination of employment or other service and prior to the termination
of the Option pursuant to its terms.  Unless otherwise determined by the
Committee, temporary absence from employment because of illness, vacation,
approved leaves of absence or military service shall not constitute a
termination of employment or other service.
 
(i)           Termination for Reason Other Than Cause, Disability or Death.  If
a Participant's termination of employment or other service is for any reason
other than death, Disability, Cause or a voluntary termination within ninety
(90) days after occurrence of an event which would be grounds for termination of
employment or other service by the Company for Cause, any Option held by such
Participant, may be exercised, to the extent exercisable at termination, by the
Participant at any time within a period not to exceed ninety (90) days from the
date of such termination, but in no event after the termination of the Option
pursuant to its terms.
 
(ii)           Disability.  If a Participant's termination of employment or
other service with the Company is by reason of a Disability of such Participant,
the Participant shall have the right at any time within a period not to exceed
one (1) year after such termination, but in no event after the termination of
the Option pursuant to its terms, to exercise, in whole or in part, any vested
portion of the Option held by such Participant at the date of such termination;
provided, however, that if the Participant dies within such period, any vested
Option held by such Participant upon death shall be exercisable by the
Participant's estate, devisee or heir at law (whichever is applicable) for a
period not to exceed one (1) year after the Participant's death, but in no event
after the termination of the Option pursuant to its terms.
 
(iii)           Death.  If a Participant dies while in the employment or other
service of the Company, the Participant's estate or the devisee named in the
Participant's valid last will and testament or the Participant's heir at law who
inherits the Option has the right, at any time within a period not to exceed one
(1) year after the date of such Participant's death, but in no event after the
termination of the Option pursuant to its terms, to exercise, in whole or in
part, any portion of the vested Option held by such Participant at the date of
such Participant's death.
 
(iv)           Termination for Cause.  In the event the termination is for Cause
or is a voluntary termination within ninety (90) days after occurrence of an
event which would be grounds for termination of employment or other service by
the Company for Cause (without regard to any notice or cure period requirement),
any Option held by the Participant at the time of such termination shall be
deemed to have terminated and expired upon the date of such termination.
 
 
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7.             STOCK APPRECIATION RIGHTS
 
(a)            Grant of Stock Appreciation Rights.  Subject to the terms and
conditions of the Plan, the Committee may grant to such Eligible Individuals as
the Committee may determine, Stock Appreciation Rights, in such amounts and on
such terms and conditions as the Committee shall determine in its sole and
absolute discretion.  Each grant of a Stock Appreciation Right shall satisfy the
requirements as set forth in this Section.
 
(b)           Terms and Conditions of Stock Appreciation Rights.  Unless
otherwise provided in an Award Agreement, the terms and conditions (including,
without limitation, the limitations on the Exercise Price, exercise period,
repricing and termination) of the Stock Appreciation Right shall be
substantially identical (to the extent possible taking into account the
differences related to the character of the Stock Appreciation Right) to the
terms and conditions that would have been applicable under Section 6 above were
the grant of the Stock Appreciation Rights a grant of an Option.
 
(c)            Exercise of Stock Appreciation Rights.  Stock Appreciation Rights
shall be exercised by a Participant only by written notice delivered to the
Chief Financial Officer of JAVELIN, specifying the number of shares of Common
Stock with respect to which the Stock Appreciation Right is being exercised.
 
(d)            Payment of Stock Appreciation Right.  Unless otherwise provided
in an Award Agreement, upon exercise of a Stock Appreciation Right, the
Participant or Participant's estate, devisee or heir at law (whichever is
applicable) shall be entitled to receive payment, in cash, in shares of Common
Stock, or in a combination thereof, as determined by the Committee in its sole
and absolute discretion.  The amount of such payment shall be determined by
multiplying the excess, if any, of the Fair Market Value of a share of Common
Stock on the date of exercise over the Fair Market Value of a share of Common
Stock on the Grant Date, by the number of shares of Common Stock with respect to
which the Stock Appreciation Rights are then being exercised.  Notwithstanding
the foregoing, the Committee may limit in any manner the amount payable with
respect to a Stock Appreciation Right by including such limitation in the Award
Agreement.
 
8.      RESTRICTED STOCK
 
(a)           Grant of Restricted Stock.  Subject to the terms and conditions of
the Plan, the Committee may grant to such Eligible Individuals as the Committee
may determine, Restricted Stock, in such amounts and on such terms and
conditions as the Committee shall determine in its sole and absolute
discretion.  Each grant of Restricted Stock shall satisfy the requirements as
set forth in this Section.
 
(b)           Restrictions.  The Committee shall impose such restrictions on any
Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation; time based vesting restrictions, or the
attainment of Performance Goals. Shares of Restricted Stock subject to the
attainment of Performance Goals will be released from restrictions only after
the attainment of such Performance Goals has been certified by the Committee in
accordance with Section 9(d).
 
 
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(c)           Certificates and Certificate Legend.  With respect to a grant of
Restricted Stock, JAVELIN may issue a certificate evidencing such Restricted
Stock to the Participant or issue and hold such shares of Restricted Stock for
the benefit of the Participant until the applicable restrictions
expire.  JAVELIN may legend the certificate representing Restricted Stock to
give appropriate notice of such restrictions.  In addition to any such legends,
each certificate representing shares of Restricted Stock granted pursuant to the
Plan shall bear the following legend:
 
"The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, are subject
to certain terms, conditions, and restrictions on transfer as set forth in The
JAVELIN Mortgage Investment Corp. 2012 Stock Incentive Plan (the "Plan"), and in
an Agreement entered into by and between the registered owner of such shares and
the JAVELIN Mortgage Investment Corp. (the "Company"), dated _____________ (the
"Award Agreement").  A copy of the Plan and the Award Agreement may be obtained
from the Secretary of the Company."
 
(d)           Removal of Restrictions.  Except as otherwise provided in the
Plan, shares of Restricted Stock shall become freely transferable by the
Participant upon the lapse of the applicable restrictions.  Once the shares
of  Restricted Stock are released from the restrictions, the Participant shall
be entitled to have the legend required by paragraph (c) above removed from the
share certificate evidencing such Restricted Stock and the Company shall pay or
distribute to the Participant all dividends and distributions, if any, held in
escrow by the Company with respect to such Restricted Stock.
 
(e)           Shareholder Rights.  Unless otherwise provided in an Award
Agreement, until the expiration of all applicable restrictions, (i) the
Restricted Stock shall be treated as outstanding, (ii) the Participant holding
shares of Restricted Stock may exercise full voting rights with respect to such
shares, and (iii) the Participant holding shares of Restricted Stock shall be
entitled to receive all dividends and other distributions paid with respect to
such shares while they are so held.  If any such dividends or distributions are
paid in shares of Common Stock, such shares shall be subject to the same
restrictions on transferability and forfeitability as the shares of Restricted
Stock with respect to which they were paid.  Notwithstanding anything to the
contrary, at the discretion of the Committee, all such dividends and
distributions may be held in escrow by the Company (subject to the same
restrictions on forfeitability) until all restrictions on the respective
Restricted Stock have lapsed.
 
(f)           Termination of Service.  Unless otherwise provided in a Award
Agreement, if a Participant’s employment or other service with the Company
terminates for any reason, all unvested shares of Restricted Stock held by the
Participant and any dividends or distributions held in escrow by JAVELIN with
respect to such Restricted Stock shall be forfeited immediately and returned to
the Company.  Notwithstanding this paragraph, all grants of Restricted Stock
that vest solely upon the attainment of Performance Goals shall be treated
pursuant to the terms and conditions that would have been applicable under
Section 9(e) as if such grants of Restricted Stock were Awards of Performance
Shares.  Notwithstanding anything in this Plan to the contrary, the Committee
may provide, in its sole and absolute discretion, that following the termination
of employment or other service of a Participant with the Company for any reason,
any unvested shares of Restricted Stock held by the Participant that vest solely
upon a future service requirement shall vest in whole or in part, at any time
subsequent to such termination of employment or other service.
 
 
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9.             PERFORMANCE SHARES AND PERFORMANCE UNITS
 
(a)           Grant of Performance Shares and Performance Units.  Subject to the
terms and conditions of the Plan, the Committee may grant to such Eligible
Individuals as the Committee may determine, Performance Shares and Performance
Units, in such amounts and on such terms and conditions as the Committee shall
determine in its sole and absolute discretion.  Each grant of a Performance
Share or a Performance Unit shall satisfy the requirements as set forth in this
Section.
 
(b)           Performance Goals.  Performance Goals will be based on one or more
of the following criteria, as determined by the Committee in its absolute and
sole discretion: (i) the attainment of certain target levels of, or a specified
increase in, JAVELIN's enterprise value or value creation targets; (ii) the
attainment of certain target levels of, or a percentage increase in, JAVELIN's
after-tax or pre-tax profits including, without limitation, that attributable to
JAVELIN's continuing and/or other operations; (iii) the attainment of certain
target levels of, or a specified increase relating to, JAVELIN's operational
cash flow or  working capital, or a component thereof; (iv) the attainment of
certain target levels of, or a specified decrease relating to, JAVELIN's
operational costs, or a component thereof (v) the attainment of a certain level
of reduction of, or other specified objectives with regard to limiting the level
of increase in all or a portion of bank debt or other of JAVELIN's long-term or
short-term public or private debt or other similar financial obligations of
JAVELIN, which may be calculated net of cash balances and/or other offsets and
adjustments as may be established by the Committee; (vi) the attainment of a
specified percentage increase in earnings per share or earnings per share from
JAVELIN's continuing operations; (vii) the attainment of certain target levels
of, or a specified percentage increase in, JAVELIN's net sales, revenues, net
income or earnings before income tax or other exclusions; (viii) the attainment
of certain target levels of, or a specified increase in, JAVELIN's return on
capital employed or return on invested capital; (ix) the attainment of certain
target levels of, or a percentage increase in, JAVELIN's after-tax or pre-tax
return on shareholder equity; (x) the attainment of certain target levels in the
fair market value of JAVELIN's Common Stock; (xi) the growth in the value of an
investment in the Common Stock assuming the reinvestment of dividends; (xii)
successful  mergers, acquisitions of other companies or assets and any cost
savings or synergies associated therewith and/or (xiii) the attainment of
certain target levels of, or a specified increase in, EBITDA (earnings before
income tax, depreciation and amortization).  In addition, Performance Goals may
be based upon the attainment by a subsidiary, division or other operational unit
of JAVELIN of specified levels of performance under one or more of the measures
described above.  Further, the Performance Goals may be based upon the
attainment by JAVELIN (or a subsidiary, division, facility or other operational
unit of JAVELIN) of specified levels of performance under one or more of the
foregoing measures relative to the performance of other corporations.  With
respect to Awards intended to qualify as performance-based compensation under
Section 162(m) of the Code, to the extent permitted under Section 162(m) of the
Code (including, without limitation, compliance with any requirements for
shareholder approval), the Committee may, in its sole and absolute discretion:
(i) designate additional business criteria upon which the Performance Goals may
be based; (ii) modify, amend or adjust the business criteria described herein;
or (iii) incorporate in the Performance Goals provisions regarding changes in
accounting methods, corporate transactions (including, without limitation,
dispositions or acquisitions) and similar events or circumstances. Performance
Goals may include a threshold level of performance below which no Award will be
earned, levels of performance at which an Award will become partially earned and
a level at which an Award will be fully earned.
 
 
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(c)           Terms and Conditions of Performance Shares and Performance
Units.  The applicable Award Agreement shall set forth (i) the number of
Performance Shares or the dollar value of Performance Units granted to the
Participant; (ii) the Performance Period and Performance Goals with respect to
each such Award; (iii) the threshold, target and maximum shares of Common Stock
or dollar values of each Performance Share or Performance Unit and corresponding
Performance Goals, and (iv) any other terms and conditions as the Committee
determines in its sole and absolute discretion.  The Committee shall establish,
in its sole and absolute discretion, the Performance Goals for the applicable
Performance Period for each Performance Share or Performance Unit granted
hereunder.  Performance Goals for different Participants and for different
grants of Performance Shares and Performance Units need not be
identical.  Unless otherwise provided in an Award Agreement, the Participants'
rights as a shareholder in Performance Shares shall be substantially identical
to the terms and conditions that would have been applicable under Section 8
above if the Performance Shares were Restricted Stock.  Unless otherwise
provided in an Award Agreement, a holder of Performance Units is not entitled to
the rights of a holder of our Common Stock.  No payments shall be made with
respect to unvested Performance Shares and Performance Units.
 
(d)           Determination and Payment of Performance Units or Performance
Shares Earned.  As soon as practicable after the end of a Performance Period,
the Committee shall determine the extent to which Performance Shares or
Performance Units have been earned on the basis of the Company’s actual
performance in relation to the established Performance Goals as set forth in the
applicable Award Agreement and shall certify these results in writing.  On the
last day of the second month following the end of the calendar year in which the
Committee has certified the results in writing, the amounts payable or
distributable with respect to Performance Shares or Performance Units shall be
paid or distributed to the Participant or the Participant’s estate, devisee or
heir at law (whichever is applicable).  Unless otherwise provided in an Award
Agreement, the Committee shall determine in its sole and absolute discretion
whether payment with respect to the Performance Share or Performance Unit shall
be made in cash, in shares of Common Stock, or in a combination thereof.  For
purposes of making payment or a distribution with respect to a Performance Share
or Performance Unit, the cash equivalent of a share of Common Stock shall be
determined by the Fair Market Value of the Common Stock on the day the Committee
designates the Performance Shares or Performance  Units to be payable.
 
(e)           Termination of Employment.  Unless otherwise provided in an Award
Agreement, if a Participant's employment or other service with the Company
terminates for any reason, all of the Participant's outstanding Performance
Shares and Performance Units shall be subject to the rules of this Section.
 
 
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(i)           Termination for Reason Other Than Death or Disability.  If a
Participant's employment or other service with the Company terminates prior to
the expiration of a Performance Period with respect to any Performance Units or
Performance Shares held by such Participant for any reason other than death or
Disability, the outstanding Performance Units or Performance Shares held by such
Participant for which the Performance Period has not yet expired shall terminate
upon such termination and the Participant shall have no further rights pursuant
to such Performance Units or Performance Shares.
 
(ii)           Termination of Employment for Death or Disability.  If a
Participant's employment or other service with the Company terminates by reason
of the Participant's death or Disability prior to the end of a Performance
Period, the Participant, or the Participant's estate, devisee or heir at law
(whichever is applicable) shall be entitled to a payment of the Participant's
outstanding Performance Units and Performance Share at the end of the applicable
Performance Period, pursuant to the terms of the Plan and the Participant’s
Award Agreement; provided, however, that the Participant shall be deemed to have
earned only that proportion (to the nearest whole unit or share) of the
Performance Units or Performance Shares granted to the Participant under such
Award as the number of full months of the Performance Period which have elapsed
since the first day of the Performance Period for which the Award was granted to
the end of the month in which the Participant’s termination of employment or
other service, bears to the total number of months in the Performance Period,
subject to the attainment of the Performance Goals associated with the Award as
certified by the Committee. The right to receive any remaining Performance Units
or Performance Shares shall be canceled and forfeited.
 
10.         OTHER AWARDS
 
Awards of shares of Common Stock, phantom stock, restricted stock units and
other awards that are valued in whole or in part by reference to, or otherwise
based on, Common Stock, may also be made, from time to time, to Eligible
Individuals as may be selected by the Committee.  Such Common Stock may be
issued in satisfaction of awards granted under any other plan sponsored by the
Company or compensation payable to an Eligible Individual.  In addition, such
awards may be made alone or in addition to or in connection with any other Award
granted hereunder.  The Committee may determine the terms and conditions of any
such award.  Each such award shall be evidenced by an Award Agreement between
the Eligible Individual and the Company which shall specify the number of shares
of Common Stock subject to the award, any consideration therefore, any vesting
or performance requirements and such other terms and conditions as the Committee
shall determine in its sole and absolute discretion.
 
11.         CHANGE IN CONTROL
 
Unless otherwise provided in an Award Agreement, upon the occurrence of a Change
in Control of JAVELIN, the Committee may in its sole and absolute discretion,
provide on a case by case basis that (i) some or all outstanding Awards may
become immediately exercisable or vested, without regard to any limitation
imposed pursuant to this Plan, (ii) that all Awards shall terminate, provided
that Participants shall have the right, immediately prior to the occurrence of
such Change in Control and during such reasonable period as the Committee in its
sole discretion shall determine and designate, to exercise any vested Award in
whole or in part, (iii) that all Awards shall terminate, provided that
Participants shall be entitled to a cash payment equal to the Change in Control
Price with respect to shares subject to the vested portion of the Award net of
the Exercise Price thereof (if applicable), (iv)  provide that, in connection
with a liquidation or dissolution of JAVELIN, Awards shall convert into the
right to receive liquidation proceeds net of the Exercise Price (if applicable)
and (v) any combination of the foregoing.  In the event that the Committee does
not terminate or convert an Award upon a Change in Control of JAVELIN, then the
Award shall be assumed, or substantially equivalent Awards shall be substituted,
by the acquiring, or succeeding corporation (or an affiliate thereof).
 
 
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12.         CHANGE IN STATUS OF PARENT OR SUBSIDIARY
 
Unless otherwise provided in an Award Agreement or otherwise determined by the
Committee, in the event that an entity or business unit which was previously a
part of the Company is no longer a part of the Company, as determined by the
Committee in its sole discretion, the Committee may, in its sole and absolute
discretion: (i) provide on a case by case basis that some or all outstanding
Awards held by a Participant employed by or performing service for such entity
or business unit may become immediately exercisable or vested, without regard to
any limitation imposed pursuant to this Plan; (ii) provide on a case by case
basis that some or all outstanding Awards held by a Participant employed by or
performing service for such entity or business unit may remain outstanding, may
continue to vest, and/or may remain exercisable for a period not exceeding one
(1) year, subject to the terms of the Award Agreement and this Plan; and/or (ii)
treat the employment or other services of a Participant employed by such entity
or business unit as terminated if such Participant is not employed by JAVELIN or
any entity that is a part of the Company immediately after such event.
 
13.     REQUIREMENTS OF LAW
 
(a)           Violations of Law.  The Company shall not be required to sell or
issue any shares of Common Stock under any Award if the sale or issuance of such
shares would constitute a violation by the individual exercising the Award, the
Participant or the Company of any provisions of any law or regulation of any
governmental authority, including without limitation any provisions of the
Sarbanes-Oxley Act, and any other federal or state securities laws or
regulations.  Any determination in this connection by the Committee shall be
final, binding, and conclusive.  The Company shall not be obligated to take any
affirmative action in order to cause the exercise of an Award, the issuance of
shares pursuant thereto or the grant of an Award to comply with any law or
regulation of any governmental authority.
 
(b)           Registration.  At the time of any exercise or receipt of any
Award, the Company may, if it shall determine it necessary or desirable for any
reason, require the Participant (or Participant’s heirs, legatees or legal
representative, as the case may be), as a condition to the exercise or grant
thereof, to deliver to the Company a written representation of present intention
to hold the shares for their own account as an investment and not with a view
to, or for sale in connection with, the distribution of such shares, except in
compliance with applicable federal and state securities laws with respect
thereto.  In the event such representation is required to be delivered, an
appropriate legend may be placed upon each certificate delivered to the
Participant (or Participant’s heirs, legatees or legal representative, as the
case may be) upon the Participant's exercise of part or all of the Award or
receipt of an Award and a stop transfer order may be placed with the transfer
agent.  Each Award shall also be subject to the requirement that, if at any time
the Company determines, in its discretion, that the listing, registration or
qualification of the shares subject to the Award upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of or in connection
with, the issuance or purchase of the shares thereunder, the Award may not be
exercised in whole or in part and the restrictions on an Award may not be
removed unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company in its sole discretion.  The Participant shall provide the Company
with any certificates, representations and information that the Company requests
and shall otherwise cooperate with the Company in obtaining any listing,
registration, qualification, consent or approval that the Company deems
necessary or appropriate.  The Company shall not be obligated to take any
affirmative action in order to cause the exercisability or vesting of an Award,
to cause the exercise of an Award or the issuance of shares pursuant thereto, or
to cause the grant of Award to comply with any law or regulation of any
governmental authority.
 
 
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(c)           Withholding.  The Committee may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of the minimum
amount of  taxes that the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with the grant or exercise of an Award, or the removal of
restrictions on an Award including, but not limited to: (i) the withholding of
delivery of shares of Common Stock until the holder reimburses the Company for
the amount the Company is required to withhold with respect to such taxes; (ii)
the canceling of any number of shares of Common Stock issuable in an amount
sufficient to reimburse the Company for the amount it is required to so
withhold; (iii) withholding the amount due from any such person's wages or
compensation due to such person; or (iv)  requiring the Participant to pay the
Company cash in the amount the Company is required to withhold with respect to
such taxes.
 
(d)           Governing Law.  The Plan shall be governed by, and construed and
enforced in accordance with, the laws of the State of Maryland.
 
14.     GENERAL PROVISIONS
 
(a)           Award Agreements.  All Awards granted pursuant to the Plan shall
be evidenced by an Award Agreement.  Each Award Agreement shall specify the
terms and conditions of the Award granted and shall contain any additional
provisions as the Committee shall deem appropriate, in its sole and absolute
discretion (including, to the extent that the Committee deems appropriate,
provisions relating to confidentiality, non-competition, non-solicitation and
similar matters).  The terms of each Award Agreement need not be identical for
Eligible Individuals provided that all Award Agreements comply with the terms of
the Plan.
 
(b)           Purchase Price.  To the extent the purchase price of any Award
granted hereunder is less than par value of a share of Common Stock and such
purchase price is not permitted by applicable law, the per share purchase price
shall be deemed to be equal to the par value of a share of Common Stock.
 
 
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(c)           Dividends and Dividend Equivalents.  Except as provided by the
Committee in its sole and absolute discretion or as otherwise provided in
Section 5(e) and subject to Section 8(e) and 9(c) of the Plan, a Participant
shall not be entitled to receive, currently or on a deferred basis, cash or
stock dividends, Dividend Equivalents, or cash payments in amounts equivalent to
cash or stock dividends on shares of Commons Stock covered by an Award which has
not vested or an Option.  The Committee in its absolute and sole discretion may
credit a Participant's Award with Dividend Equivalents with respect to any
Awards.  To the extent that dividends and distributions relating to an Award are
held in escrow by the Company, or Dividend Equivalents are credited to an Award,
a Participant shall not be entitled to any interest on any such amounts.  The
Committee may not grant Dividend Equivalents to an Award subject to
performance-based vesting to the extent that the grant of such Dividend
Equivalents would limit the Company’s deduction of the compensation payable
under such Award for federal tax purposes pursuant to Code Section 162(m).
 
(d)           Deferral of Awards.  The Committee may from time to time establish
procedures pursuant to which a Participant may elect to defer, until a time or
times later than the vesting of an Award, receipt of all or a portion of the
shares of Common Stock or cash subject to such Award and to receive Common Stock
or cash at such later time or times, all on such terms and conditions as the
Committee shall determine.  The Committee shall not permit the deferral of an
Award unless counsel for JAVELIN determines that such action will not result in
adverse tax consequences to a Participant under Section 409A of the Code.  If
any such deferrals are permitted, then notwithstanding anything to the contrary
herein, a Participant who elects to defer receipt of Common Stock shall not have
any rights as a shareholder with respect to deferred shares of Common Stock
unless and until shares of Common Stock are actually delivered to the
Participant with respect thereto, except to the extent otherwise determined by
the Committee.
 
(e)           Prospective Employees.  Notwithstanding anything to the contrary,
any Award granted to a Prospective Employee shall not become vested prior to the
date the Prospective Employee first becomes an employee of the Company.
 
(f)           Issuance of Certificates; Shareholder Rights.  JAVELIN shall
deliver to the Participant a certificate evidencing the Participant's ownership
of shares of Common Stock issued pursuant to the exercise of an Award as soon as
administratively practicable after satisfaction of all conditions relating to
the issuance of such shares.  A Participant shall not have any of the rights of
a shareholder with respect to such Common Stock prior to satisfaction of all
conditions relating to the issuance of such Common Stock, and, except as
expressly provided in the Plan, no adjustment shall be made for dividends,
distributions or other rights of any kind for which the record date is prior to
the date on which all such conditions have been satisfied.
 
(g)           Transferability of Awards.  A Participant may not Transfer an
Award other than by will or the laws of descent and distribution.  Awards may be
exercised during the Participant's lifetime only by the Participant.  No Award
shall be liable for or subject to the debts, contracts, or liabilities of any
Participant, nor shall any Award be subject to legal process or attachment for
or against such person.  Any purported Transfer of an Award in contravention of
the provisions of the Plan shall have no force or effect and shall be null and
void, and the purported transferee of such Award shall not acquire any rights
with respect to such Award.  Notwithstanding anything to the contrary, the
Committee may in its sole and absolute discretion permit the Transfer of an
Award to a Participant's "family member" as such term is defined in the Form 8-A
Registration Statement under the Securities Act of 1933, as amended, under such
terms and conditions as specified by the Committee.  In such case, such Award
shall be exercisable only by the transferee approved of by the Committee.  To
the extent that the Committee permits the Transfer of an Incentive Stock Option
to a "family member", so that such Option fails to continue to satisfy the
requirements of an incentive stock option under the Code such Option shall
automatically be re-designated as a Non-Qualified Stock Option.
 
 
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(h)           Buyout and Settlement Provisions.  Except as prohibited in Section
6(e) of the Plan, the Committee may at any time on behalf of JAVELIN offer to
buy out any Awards previously granted based on such terms and conditions as the
Committee shall determine which shall be communicated to the Participants at the
time such offer is made.
 
(i)           Use of Proceeds.  The proceeds received by JAVELIN from the sale
of Common Stock pursuant to Awards granted under the Plan shall constitute
general funds of JAVELIN.
 
(j)           Modification or Substitution of an Award.  Subject to the terms
and conditions of the Plan, the Committee may modify outstanding
Awards.  Notwithstanding the following, no modification of an Award shall
adversely affect any rights or obligations of the Participant under the
applicable Award Agreement without the Participant's consent.  The Committee in
its sole and absolute discretion may rescind, modify, or waive any vesting
requirements or other conditions applicable to an Award.  Notwithstanding the
foregoing, without the approval of the shareholders of JAVELIN in accordance
with applicable law, an Award may not be modified to reduce the exercise price
thereof nor may an Award at a lower price be substituted for a surrender of an
Award, provided that the foregoing shall not apply to adjustments or
substitutions in accordance with Section 5 or Section 12.
 
(k)           Amendment and Termination of Plan.  The Board may, at any time and
from time to time, amend, suspend or terminate the Plan as to any shares of
Common Stock as to which Awards have not been granted; provided, however, that
the approval of the shareholders of JAVELIN in accordance with applicable law
and the Articles of Incorporation and Bylaws of JAVELIN shall be required for
any amendment: (i) that changes the class of individuals eligible to receive
Awards under the Plan: (ii) that increases the maximum number of shares of
Common Stock in the aggregate that may be subject to Awards that are granted
under the Plan (except as permitted under Section 5 or Section 12 hereof): (iii)
the approval of which is necessary to comply with federal or state law
(including without limitation Section 162(m) of the Code and Rule 16b-3 under
the Exchange Act) or with the rules of any stock exchange or automated quotation
system on which the Common Stock may be listed or traded; or (iv) that proposed
to eliminate a requirement provided herein that the shareholders of JAVELIN must
approve an action to be undertaken under the Plan.  Except as permitted under
Section 5 or Section 12 hereof, no amendment, suspension or termination of the
Plan shall, without the consent of the holder of an Award, alter or impair
rights or obligations under any Award theretofore granted under the
Plan.  Awards granted prior to the termination of the Plan may extend beyond the
date the Plan is terminated and shall continue subject to the terms of the Plan
as in effect on the date the Plan is terminated.
 
 
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(l)           Section 409A of the Code. The Plan is intended not to provide for
deferral of compensation for purposes of Section 409A of the Code, by means of
complying with Section 1.409A-1(b)(4) and/or Section 1.409A-1(b)(5) of the final
Treasury regulations issued under Section 409A of the Code. The provisions of
the Plan shall be interpreted in a manner that satisfies the requirements of
Section 1.409A-1(b)(4) and/or Section 1.409A-1(b)(5) of the final Treasury
regulations issued under Section 409A of the Code and the Plan shall be operated
accordingly.  If any provision of the Plan or any term or condition of any Award
would otherwise frustrate or conflict with this intent, the provision, term or
condition will be interpreted and deemed amended so as to avoid this conflict.
 
In the event that following the application of the immediately preceding
paragraph, any Award is subject to Section 409A of the Code, the provisions of
Section 409A of the Code and the regulations issued thereunder are incorporated
herein by reference to the extent necessary for any Award that is subject
Section 409A of the Code to comply therewith. In such event, the provisions of
the Plan shall be interpreted in a manner that satisfies the requirements of
Section 409A of the Code and the related regulations, and the Plan shall be
operated accordingly.  If any provision of the Plan or any term or condition of
any Award would otherwise frustrate or conflict with this intent, the provision,
term or condition will be interpreted and deemed amended so as to avoid this
conflict.
 
Notwithstanding any other provisions of the Plan, the Company does not guarantee
to any Participant or any other person that any Award intended to be exempt from
Section 409A of the Code shall be so exempt, nor that any Award intended to
comply with Section 409A of the Code shall so comply, nor will the Company
indemnify, defend or hold harmless any individual with respect to the tax
consequences of any such failure.
 
(m)           Notification of 83(b) Election.  If in connection with the grant
of any Award, any Participant makes an election permitted under Code Section
83(b), such Participant must notify the Company in writing of such election
within ten (10) days of filing such election with the Internal Revenue Service.
 
(n)           Detrimental Activity.  All Awards shall be subject to cancellation
by the Committee in accordance with the terms of this Section 14(n) if the
Participant engages in any Detrimental Activity.  To the extent that a
Participant engages in any Detrimental Activity at any time prior to, or during
the one year period after, any exercise or vesting of an Award but prior to a
Change in Control, the Company shall, upon the recommendation of the Committee,
in its sole and absolute discretion, be entitled to (i) immediately terminate
and cancel any Awards held by the Participant that have not yet been exercised,
and/or (ii) with respect to Awards of the Participant that have been previously
exercised, recover from the Participant at any time within two (2) years after
such exercise but prior to a Change in Control (and the Participant shall be
obligated to pay over to the Company with respect to any such Award previously
held by such Participant): (A) with respect to any Options exercised, an amount
equal to the excess of the Fair Market Value of the Common Stock for which any
Option was exercised over the Exercise Price paid (regardless of the form by
which payment was made) with respect to such Option; (B) with respect to any
Award other than an Option, any shares of Common Stock granted and vested
pursuant to such Award, and if such shares are not still owned by the
Participant, the Fair Market Value of such shares on the date they were issued,
or if later, the date all vesting restrictions were satisfied; and (C) any cash
or other property (other than Common Stock) received by the Participant from the
Company pursuant to an Award.  Without limiting the generality of the foregoing,
in the event that a Participant engages in any Detrimental Activity at any time
prior to any exercise of an Award and the Company exercises its remedies
pursuant to this Section 14(n) following the exercise of such Award, such
exercise shall be treated as having been null and void, provided that the
Company will nevertheless be entitled to recover the amounts referenced above.
 
 
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(o)           Disclaimer of Rights.  No provision in the Plan, any Award granted
hereunder, or any Award Agreement entered into pursuant to the Plan shall be
construed to confer upon any individual the right to remain in the employ of or
other service with the Company or to interfere in any way with the right and
authority of the Company either to increase or decrease the compensation of any
individual, including any holder of an Award, at any time, or to terminate any
employment or other relationship between any individual and the Company.  The
grant of an Award pursuant to the Plan shall not affect or limit in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.
 
(p)           Unfunded Status of Plan.  The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation.  With respect to any
payments as to which a Participant has a fixed and vested interest but which are
not yet made to such Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general
creditor of the Company.
 
(q)           Nonexclusivity of Plan.  The adoption of the Plan shall not be
construed as creating any limitations upon the right and authority of the Board
to adopt such other incentive compensation arrangements (which arrangements may
be applicable either generally to a class or classes of individuals or
specifically to a particular individual or individuals) as the Board in its sole
and absolute discretion determines desirable.
 
(r)           Other Benefits.  No Award payment under the Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or any agreement between a Participant and the Company, nor affect any
benefits under any other benefit plan of the Company now or subsequently in
effect under which benefits are based upon a Participant's level of
compensation.
 
(s)           Headings.  The section headings in the Plan are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.
 
(t)           Pronouns.  The use of any gender in the Plan shall be deemed to
include all genders, and the use of the singular shall be deemed to include the
plural and vice versa, wherever it appears appropriate from the context.
 
(u)           Successors and Assigns.  The Plan shall be binding on all
successors of the Company and all successors and permitted assigns of a
Participant, including, but not limited to, a Participant's estate, devisee, or
heir at law.
 
 
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(v)           Severability.  If any provision of the Plan or any Award Agreement
shall be determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
 
(w)           Notices.  Unless otherwise provided by the Committee, any
communication or notice required or permitted to be given under the Plan shall
be in writing, and mailed by registered or certified mail or delivered by hand,
to JAVELIN, to its principal place of business, attention: Chief Financial
Officer, JAVELIN Mortgage Investment Corp., and if to the holder of an Award, to
the address as appearing on the records of the Company.
 
 
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APPENDIX A
 
DEFINITIONS
 
"JAVELIN" means JAVELIN Mortgage Investment Corp., a Maryland Corporation,
including any successor thereto by merger, consolidation, acquisition or
otherwise.
 
"Award" means any Common Stock, Option, Performance Share, Performance Unit,
Restricted Stock, Stock Appreciation Right or any other award granted pursuant
to the Plan.
 
"Award Agreement" means a written agreement entered into by JAVELIN and a
Participant setting forth the terms and conditions of the grant of an Award to
such Participant.
 
"Board" means the board of directors of JAVELIN.
 
"Cause" means, with respect to a termination of employment or other service with
the Company, a termination of employment or other service due to a Participant's
dishonesty, fraud, insubordination, willful misconduct, refusal to perform
services (for any reason other than illness or incapacity) or materially
unsatisfactory performance of the Participant's duties for the Company;
provided, however, that if the Participant and the Company have entered into an
employment agreement or consulting agreement which defines the term Cause, the
term Cause shall be defined in accordance with such agreement with respect to
any Award granted to the Participant on or after the effective date of the
respective employment or consulting agreement.  The Committee shall determine in
its sole and absolute discretion whether Cause exists for purposes of the Plan.
 
"Change in Control" shall be deemed to occur upon:
 
(a)           any "person" as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than JAVELIN, any trustee or other fiduciary holding
securities under any employee benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of JAVELIN in substantially the same
proportions as their ownership of common stock of JAVELIN), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of JAVELIN representing thirty percent (30%) or
more of the combined voting power of JAVELIN's then outstanding securities;
 
(b)           during any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement with
the Company to effect a transaction described in paragraph (a), (c), or (d) of
this Section) whose election by the Board or nomination for election by
JAVELIN's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of the Board;
 
 
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(c)           a merger, consolidation, reorganization, or other business
combination of JAVELIN with any other entity, other than a merger or
consolidation which would result in the voting securities of JAVELIN outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of JAVELIN or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of JAVELIN (or similar transaction) in
which no person acquires thirty percent (30%) or more of the combined voting
power of JAVELIN's then outstanding securities shall not constitute a Change in
Control; or
 
(d)           the shareholders of JAVELIN approve a plan of complete liquidation
of JAVELIN or the consummation of the sale or disposition by JAVELIN of all or
substantially all of JAVELIN's assets other than (x) the sale or disposition of
all or substantially all of the assets of JAVELIN to a person or persons who
beneficially own, directly or indirectly, at least fifty percent (50%) or more
of the combined voting power of the outstanding voting securities of JAVELIN at
the time of the sale or (y) pursuant to a spin-off type transaction, directly or
indirectly, of such assets to the shareholders of JAVELIN.
 
However, to the extent that Section 409A of the Code would cause an adverse tax
consequence to a Participant using the above definition, the term "Change in
Control" shall have the meaning ascribed to the phrase "Change in the Ownership
or Effective Control of a Corporation or in the Ownership of a Substantial
Portion of the Assets of a Corporation" under Treasury Department Regulation
1.409A-3(i)(5), as revised from time to time, and in the event that such
regulations are withdrawn or such phrase (or a substantially similar phrase)
ceases to be defined, as determined by the Committee.
 
"Change in Control Price" means the price per share of Common Stock paid in any
transaction related to a Change in Control of JAVELIN.
 
"Code" means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
 
"Committee" means a committee or sub-committee of the Board consisting of two or
more members of the Board, none of whom shall be an officer or other salaried
employee of the Company, and each of whom shall qualify in all respects as a
"non-employee director" as defined in Rule 16b-3 under the Exchange Act, and as
an "outside director" for purposes of Code Section 162(m).  If no Committee
exists, the functions of the Committee will be exercised by the Board; provided,
however, that a Committee shall be created prior to the grant of Awards to a
Covered Employee and that grants of Awards to a Covered Employee shall be made
only by such Committee.  Notwithstanding the foregoing, with respect to the
grant of Awards to non-employee directors, the Committee shall be the Board.
 
"Common Stock" means the common stock, par value $0.001 per share, of JAVELIN.
 
"Company" means JAVELIN, the subsidiaries of JAVELIN, and all other entities
whose financial statements are required to be consolidated with the financial
statements of JAVELIN pursuant to United States generally accepted accounting
principles, and any other entity determined to be an affiliate of JAVELIN as
determined by the Committee in its sole and absolute discretion.
 
 
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"Covered Employee" means "covered employee" as defined in Code Section
162(m)(3).
 
"Covered Individual" means any current or former member of the Committee, any
current or former officer or director of the Company, or any individual
designated pursuant to Section 4(c).
 
"Detrimental Activity" means any of the following: (i) the disclosure to anyone
outside the Company, or the use in other than the Company's business, without
written authorization from the Company, of any confidential information or
proprietary information, relating to the business of the Company, acquired by a
Participant prior to a termination of the Participant's employment or service
with the Company; (ii) activity while employed or providing services that is
classified by the Company as a basis for a termination for Cause; (iii) the
Participant's Disparagement, or inducement of others to do so, of the Company or
its past or present officers, directors, employees or services; or (iv) any
other conduct or act determined by the Committee, in its sole discretion, to be
injurious, detrimental or prejudicial to the interests of the Company.  For
purposes of subparagraph (i) above, the Chief Executive Officer and the General
Counsel of the Company shall each have authority to provide the Participant with
written authorization to engage in the activities contemplated thereby and no
other person shall have authority to provide the Participant with such
authorization.
 
"Disability" means a "permanent and total disability" within the meaning of Code
Section 22(e)(3); provided, however, that if a Participant and the Company have
entered into an employment or consulting agreement which defines the term
Disability for purposes of such agreement, Disability shall be defined pursuant
to the definition in such agreement with respect to any Award granted to the
Participant on or after the effective date of the respective employment or
consulting agreement.  The Committee shall determine in its sole and absolute
discretion whether a Disability exists for purposes of the Plan.
 
"Disparagement" means making any comments or statements to the press, the
Company's employees, clients or any other individuals or entities with whom the
Company has a business relationship, which could adversely affect in any manner:
(i) the conduct of the business of the Company (including, without limitation,
any products or business plans or prospects), or (ii) the business reputation of
the Company or any of its products, or its past or present officers, directors
or employees.
 
"Dividend Equivalents" means an amount equal to the cash dividends paid by the
Company upon one share of Common Stock subject to an Award granted to a
Participant under the Plan.
 
"Effective Date" shall mean the later of: (i) the date the Plan was approved by
the Board, and (ii) the date the Plan was approved by shareholders of JAVELIN in
accordance with the laws of the State of Maryland.
 
"Eligible Individual" means any employee, officer, director (employee or
non-employee director) or consultant of the Company and any Prospective Employee
to whom Awards are granted in connection with an offer of future employment with
the Company, provided, however,  that for purposes of granting Options and Stock
Appreciation Rights there shall be excluded from the definition of Eligible
Individual any individual performing services for the Company, who does not
perform services for JAVELIN or any other entity with respect which Common Stock
is "service recipient stock" as such term is defined for purposes of the
Treasury regulations promulgated under Section 409A of the Code.
 
 
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
 
"Exercise Price" means the purchase price per share of each share of Common
Stock subject to an Award.
 
"Fair Market Value" means, unless otherwise required by the Code, as of any
date, the last sales price reported for the Common Stock on the day immediately
prior to such date (i) as reported by the national securities exchange in the
United States on which it is then traded, or (ii) if not traded on any such
national securities exchange, as quoted on an automated quotation system
sponsored by the National Association of Securities Dealers, Inc., or if the
Common Stock shall not have been reported or quoted on such date, on the first
day prior thereto on which the Common Stock was reported or quoted; provided,
however, that the Committee may modify the definition of Fair Market Value to
reflect any changes in the trading practices of any exchange or automated system
sponsored by the National Association of Securities Dealers, Inc. on which the
Common Stock is listed or traded.  If the Common Stock is not readily traded on
a national securities exchange or any system sponsored by the National
Association of Securities Dealers, Inc., the Fair Market Value shall be
determined in good faith by the Committee.
 
"Grant Date" means the date on which the Committee approves the grant of an
Award or such later date as is specified by the Committee and set forth in the
applicable Award Agreement.
 
"Incentive Stock Option" means an "incentive stock option" within the meaning of
Code Section 422.
 
"Non-Qualified Stock Option" means an Option which is not an Incentive Stock
Option.
 
"Option" means an option to purchase Common Stock granted pursuant to Sections 6
of the Plan.
 
"Participant" means any Eligible Individual who holds an Award under the Plan
and any of such individual's successors or permitted assigns.
 
"Performance Goals" means the specified performance goals which have been
established by the Committee in connection with an Award.
 
"Performance Period" means the period during which Performance Goals must be
achieved in connection with an Award granted under the Plan.
 
"Performance Share" means a right to receive a fixed number of shares of Common
Stock, or the cash equivalent, which is contingent on the achievement of certain
Performance Goals during a Performance Period.
 
 
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"Performance Unit" means a right to receive a designated dollar value, or shares
of Common Stock of the equivalent value, which is contingent on the achievement
of Performance Goals during a Performance Period.
 
"Person" shall mean any person, corporation, partnership, joint venture or other
entity or any group (as such term is defined for purposes of Section 13(d) of
the Exchange Act), other than a parent or subsidiary of JAVELIN.
 
"Plan" means this JAVELIN Mortgage Investment Corp. 2012 Stock Incentive Plan.
 
"Prospective Employee" means any individual who has committed to become an
employee of the Company within sixty (60) days from the date an Award is granted
to such individual, provided, however,  that for purposes of granting Options
and Stock Appreciation Rights there shall be excluded for the definition of
Prospective Employee any individual who does commit to perform services for
JAVELIN or any other entity with respect which Common Stock is "service
recipient stock" as such term is defined for purposes of the Treasury
regulations promulgated under Section 409A of the Code.
 
"Restricted Stock" means Common Stock subject to certain restrictions, as
determined by the Committee, and granted pursuant to Section 8 hereunder.
 
"Section 424 Employee" means an employee of JAVELIN or any "subsidiary
corporation" or "parent corporation" as such terms are defined in and in
accordance with Code Section 424.  The term "Section 424 Employee" also includes
employees of a corporation issuing or assuming any Options in a transaction to
which Code Section 424(a) applies.
 
"Stock Appreciation Right" means the right to receive all or some portion of the
increase in value of a fixed number of shares of Common Stock granted pursuant
to Section 7 hereunder.
 
"Transfer" means, as a noun, any direct or indirect, voluntary or involuntary,
exchange, sale, bequeath, pledge, mortgage, hypothecation, encumbrance,
distribution, transfer, gift, assignment or other disposition or attempted
disposition of, and, as a verb, directly or indirectly, voluntarily or
involuntarily, to exchange, sell, bequeath, pledge, mortgage, hypothecate,
encumber, distribute, transfer, give, assign or in any other manner whatsoever
dispose or attempt to dispose of.

 
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