Exhibit 10.6

 

IMPAC MORTGAGE HOLDINGS, INC.

OMNIBUS INCENTIVE PLAN

 

NON-EMPLOYEE DIRECTOR

DEFERRED STOCK UNIT AWARD PROGRAM

Effective December 1, 2010

 

ARTICLE I

 

THE PROGRAM

 

1.1.  Deferred Unit Program.  Impac Mortgage Holdings, Inc. hereby adopts the
Non-Employee Director Deferred Stock Unit Award Program, subject to and in
compliance with the terms of the Impac Mortgage Holdings, Inc. Omnibus Incentive
Plan.  The Program is intended to provide for certain Awards to members of the
Board of Directors of the Company who are neither officers nor employees of the
Company or any of its subsidiaries.  Awards will consist of grants of Deferred
Stock Units subject to the vesting and settlement provisions set forth herein.

 

1.2.  Effective Date and Term.  This Program was approved by the Board and the
initial grants under the Program are hereby made as of December 1, 2010 (the
“Effective Date”).  The Program shall remain in effect during the term of the
Plan, unless amended or terminated by action of the Board.

 

ARTICLE II

 

DEFINITIONS

 

As used herein, the following terms have the meanings hereinafter set forth
unless the context clearly indicates to the contrary.  Capitalized terms not
defined herein shall have the meanings ascribed to such terms in the Plan.

 

(a)           “Award” shall mean an award to an Eligible Director of Deferred
Stock Units under Article IV of the Plan.

 

(b)           “Award Agreement” shall mean a written agreement between the
Company and an Eligible Director or a written acknowledgment from the Company to
an Eligible Director specifically setting forth the terms and conditions of an
Award granted under the Plan.

 

(c)           “Date of Grant” shall mean the date the Board approves an Award of
Deferred Stock Units or, if later, the date designated by the Board for such
Award to be granted.

 

--------------------------------------------------------------------------------

 

(d)           “Deferred Stock Unit Award” shall mean an award of Stock Units,
subject to certain forfeiture provisions, granted to an Eligible Director
pursuant to Section 4.1 of the Plan.

 

(e)           “Effective Date” for the Plan shall have the meaning set forth in
Section 1.2.

 

(f)            “Eligible Director” shall mean any director of the Company who is
not an employee of the Company or any of its subsidiaries.

 

(g)           “Plan” shall mean the Impac Mortgage Holdings, Inc. Omnibus
Incentive Plan, the terms of which are incorporated herein, as amended from time
to time.

 

(h)           “Program” shall mean the Non-Employee Director Deferred Stock Unit
Award Program, the terms of which are set forth herein, as amended from time to
time.

 

(i)            “Separation from Service” shall mean any termination of a
director’s Board service with the Company.  The occurrence of a Separation from
Service is determined by the Board under the facts and circumstances and in
accordance with Section 409A of the Code.

 

(j)            “Stock Account” means the bookkeeping account established by the
Company in respect to each director pursuant to Section 4.2 and to which shall
be credited Stock Units representing the director’s Deferred Stock Unit Awards
pursuant to the Plan.

 

(k)           “Stock Unit” shall mean a hypothetical share of Stock which shall
have a value on any date equal to the Fair Market Value of one share of Common
Stock on that date.

 

ARTICLE III

 

ADMINISTRATION

 

The Board shall have the power and authority to grant Awards, determine the
terms of any Award, including the Eligible Directors receiving such Awards and
the number of Stock Units granted under such Award, and shall make all other
determinations with respect to the Program.  The Board’s determinations under
the Program shall be final and binding on all parties.

 

ARTICLE IV

 

DEFERRED STOCK UNITS

 

4.1.          Grants of Deferred Stock Units.  The Board may grant to any
Eligible Director an Award of Deferred Stock Units consisting of a specified
number of Stock Units and subject to the terms and conditions set forth herein. 
Subject to Section 4.4 of this Program, each Deferred Stock Unit Grant shall
vest in three (3) substantially equal annual installments, commencing with the
first anniversary of the Date of Grant with respect to such Award, subject to
the Eligible Director’s continued service on the Board through such anniversary
date and any additional conditions imposed by the Board and set forth in an
Award Agreement.  Upon vesting,

 

2

--------------------------------------------------------------------------------

 

such Stock Units shall continue to be held in the director’s Stock Account until
payment becomes due in accordance with Section 4.6.  In the event of an Eligible
Director’s Separation from Service as a member of the Board for any reason prior
to vesting of all of an Award, all Stock Units that remain unvested under such
Award as of the date of such Separation from Service shall terminate and be
forfeited and shall be subtracted from such director’s Stock Account.

 

4.2.          Stock Accounts.  A Stock Account shall be established for each
Eligible Director.  Deferred Stock Unit Grants shall be credited as Stock Units
directly to the Stock Account as of the Date of Grant.  An Eligible Director’s
Stock Account shall also be credited with dividends and other distributions
pursuant to Section 4.3.  Fractional shares shall be credited to a director’s
Stock Account cumulatively but the balance of shares of Stock Units in a
director’s Stock Account shall be rounded to the next highest whole share for
any payment to such director pursuant to Section 4.6.

 

4.3           Dividends Equivalents on Stock Units.  Dividends and other
distributions on Stock Units credited to an Eligible Director’s Stock Account
shall be deemed to have been paid as if such Stock Units were actual shares of
Common Stock issued and outstanding as of the respective record or distribution
dates.  No interest shall be credited on such amounts.  Such dividends and
distributions shall be converted into Stock Units and credited to the Eligible
Director’s Stock Account as of the respective record or distribution dates.  The
conversion of such dividends and distributions into Stock Units shall be based
on the Fair Market Value of the Common Stock as of the date of conversion.

 

4.4           Acceleration of Vesting.  Notwithstanding anything contained in
this Article IV to the contrary, the Board may, in its sole discretion, waive
the vesting and forfeiture conditions set forth in Section 4.1 and any Award
Agreement under appropriate circumstances (including the death, disability or
retirement of an Eligible Director or a material change in circumstances arising
after the date of an Award) and subject to such terms and conditions (including
forfeiture of a proportionate number of shares issuable upon settlement of the
Deferred Stock Units constituting an Award) as the Board shall deem
appropriate.  In addition, notwithstanding anything contained in this Article IV
or an individual Award Agreement to the contrary, in the event a Change in
Control of the Company, all outstanding Deferred Stock Unit Awards shall be
deemed fully vested.

 

4.5           Shareholder Rights and Statement of Accounts.  Until settlement of
an Award of Deferred Stock Units under Section 4.6 hereof, no shares of Common
Stock shall be issued in respect of such Awards and no Eligible Director shall
have any rights as a shareholder of the Company with respect to the shares of
Common Stock covered by such Award of Deferred Stock Units.  A statement will be
sent to each Eligible Director as to the balance of his or her Stock Account at
least once each calendar year.

 

4.6           Payment of Accounts.  Subject to Section 4.7, an Eligible Director
shall receive a distribution of his or her Stock Account within thirty (30) days
after the date of his or her Separation from Service as a director.  Such
distribution shall consist of one share of Common Stock for each Stock Unit
credited to such director’s Stock Account as of the date of

 

3

--------------------------------------------------------------------------------

 

distribution.  Any shares of Common Stock issued with respect to a distribution
of an Eligible Director’s Stock Account shall be deemed issued under the Plan
and shall be counted against the number of shares of Common Stock reserved for
issuance under Section 4.01 of the Plan.

 

4.7           Accelerated Payment.  Payment of a director’s Stock Account may be
accelerated if at any time the Plan fails to meet the requirements of
Section 409A of the Code and regulations and other guidance promulgated
thereunder; provided, however, that any such payment shall not exceed the amount
required to be included in income as a result of the failure to comply with the
requirements of Section 409A of the Code and the regulations and other guidance.

 

4.8           Designation of Beneficiary; Payments to a Deceased Director’s
Estate.  An Eligible Director may designate a beneficiary on a form approved by
the Board.  In the event of a director’s death before the balance of his or her
Stock Account is fully paid to the director, payment of the balance of the
director’s Stock Account shall then be made to his or her designated beneficiary
or, if no valid designation has been made, to his or her estate in the time and
manner selected by the Board.  The Board may take into account the application
of any duly appointed administrator or executor of an Eligible Director’s estate
and direct that the balance of the director’s Stock Account be paid to his or
her estate in the manner requested by such application.

 

4.9           Limitation on Transfer.  No Stock Units or an Eligible Director’s
rights with respect to any Stock Units may be assigned or transferred other than
by will or the laws of descent and distribution, and during the lifetime of an
Eligible Director, only the Eligible Director personally (or the Eligible
Director’s personal representative) may exercise rights under the Program.

 

ARTICLE V

 

TERMINATION, AMENDMENT AND MODIFICATION OF THE PROGRAM

 

The Board, in its sole discretion, may at any time terminate the Program and
may, at any time, and from time to time and in any respect, amend or modify the
Plan.  The Board may amend the terms of any Award granted under the Program;
provided, however, that no such amendment may be made by the Board that, in any
material respect, impairs the rights of a participant without the participant’s
consent.

 

Upon termination of the Program, amounts accrued and vested in a director’s
Stock Account as of the date of termination of the Program shall be held,
administered and distributed in accordance with the terms and conditions of the
Program and the individual Award Agreements as in effect on the date of
termination of the Program, except that:

 

(a)           Amounts credited to the director’s Stock Account under the Plan
may be distributed prior to the time required under Article IV if all
nonqualified deferred compensation arrangements sponsored by the Company and any
company required to be aggregated with the Company under Section 414(b) and
(c) of the Code that are treated, together with Awards under

 

4

--------------------------------------------------------------------------------

 

the Program, as one arrangement under Section 409A of the Code, are terminated,
subject to the following requirements: (i) no payments other than payments that
would be payable under the terms of the Program and such other arrangements if
the termination had not occurred are made within 12 months of the termination of
the Program and such other arrangements, (ii) all payments under the Program and
such other arrangements are made within 24 months of the date of such
termination, and (iii) neither the Company nor any company required to be
aggregated with the Company under Section 414(b) or (c) of the Code adopts a new
arrangement that would, with the Program or any such other terminated
arrangement, be treated as a single arrangement under Section 409A of the Code,
at any time within three (3) years following the date of termination of the
Program and such other arrangements.

 

(b)           The Program may be terminated at any time within 12 months of a
dissolution of the Company taxed under Section 331 of the Code, or with the
approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), in
which case the amounts deferred under the Program shall be distributed and
included in a director’s gross income in the latest of (i) the calendar year in
which the termination occurs, or (ii) the first calendar year in which the
payment is administratively practicable.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.1           Plan Binding on Successors.  The Program shall be binding upon the
successors and assigns of the Company.

 

6.2  Issuance of Shares.  The Company shall not be required to issue or deliver
any shares of Common Stock upon expiration of the deferral period applicable to
any Deferred Stock Units unless, in the opinion of counsel to the Company, there
has been compliance with all applicable legal requirements.  The Company’s
obligation to deliver shares of Common Stock with respect to any Award under
this Program may be conditioned upon the receipt by the Company of a
representation as to the investment intention of the recipient in such form as
the Company shall determine to be necessary or advisable solely to comply with
the provisions of the Securities Act of 1933, as amended, or any other federal,
state or local securities laws.  All certificates for shares of Common Stock
delivered under the Plan shall be subject to such stop transfer orders and other
restrictions as the Company may deem advisable under the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, any federal, state or local
securities laws and applicable corporate law, and the Company may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.

 

6.3           Director’s Rights Unsecured.  The Program is unfunded.  The right
of any Eligible Director to receive payments of Common Stock under the
provisions of the Program shall be an unsecured claim against the general assets
of the Company.

 

6.4           Taxes.  The Company shall have the right to deduct from all
payments hereunder any taxes required by law to be withheld from such payments. 
The recipients of such

 

5

--------------------------------------------------------------------------------

 

payments shall bear all taxes on amounts paid under the Program and with respect
to any Awards granted hereunder.

 

6.5           Governing Law.  The Program and each Award Agreement shall be
governed by the laws of the State of California and construed in accordance
therewith.

 

6.6           Application of Plan Provisions.  In addition to the specific
provisions of the Plan referred to herein, Awards of Deferred Stock Units shall
be subject to all applicable provisions of Article XI of the Plan.

 

6

--------------------------------------------------------------------------------