EXHIBIT 10.5

 

WALKER & DUNLOP, INC.

 

2010 EQUITY INCENTIVE PLAN

 

NON-QUALIFIED OPTION AGREEMENT

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants an
option to purchase shares of its common stock, par value $0.01 (the “Option”),
to the optionee named below, subject to the vesting and other conditions set
forth below.  Additional terms and conditions of the grant are set forth on this
cover sheet and in the attachment (collectively, the “Agreement”), in the
Company’s 2010 Equity Incentive Plan (as amended from time to time, the “Plan”),
and in any employment agreement between you and the Company or any Affiliate.

 

Grant Date:                                      , 201

 

Name of Optionee:

 

Optionee’s Social Security Number:             -        -

 

Number of Shares Covered by Option:

 

Option Price per Share:  $          .       (At least 100% of Fair Market Value)

 

[Vesting Schedule—The Non-Qualified Options shall vest in equal installments on
each vesting date set forth below; provide, however, that any fractional shares
shall be rounded down to the nearest whole option in the first two (2) years:]

 

By your signature below, you agree to all of the terms and conditions described
herein, in the attached Agreement, in the Plan, a copy of which is also
attached, and in any employment agreement between you and the Company or any
Affiliate.  You acknowledge that you have carefully reviewed the Plan, and agree
that the Plan will control in the event any provision of this cover sheet or
Agreement should appear to be inconsistent.

 

 

Optionee:

 

 

Date:

 

 

(Signature)

 

 

 

 

 

 

 

 

Company:

 

 

Date:

 

 

(Signature)

 

 

 

Title:

 

 

 

 

 

Attachment

 

This is not a stock certificate or a negotiable instrument.

 

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WALKER & DUNLOP, INC.

 

2010 EQUITY INCENTIVE PLAN

 

NON-QUALIFIED OPTION AGREEMENT

 

Non-qualified Option

 

This Agreement evidences an award of an Option exercisable for that number of
shares of Stock set forth on the cover sheet and subject to the vesting and
other conditions set forth herein, in the Plan and on the cover sheet. This
option is not intended to be an incentive option under Section 422 of the
Internal Revenue Code and will be interpreted accordingly.

 

 

 

Transfer of Option

 

During your lifetime, only you (or, in the event of your legal incapacity or
incompetency, your guardian or legal representative) may exercise the Option.
Other than by will or the laws of descent and distribution the Option may not be
sold, assigned, transferred, pledged, hypothecated or otherwise encumbered,
whether by operation of law or otherwise, nor may the Option be made subject to
execution, attachment or similar process.

 

 

 

 

 

If you attempt to do any of these things, this Option will immediately become
forfeited.

 

 

 

 

 

Notwithstanding these restrictions on transfer, the Compensation Committee may
authorize, in its sole discretion, the transfer of a vested Option (in whole or
in part) to a member of your immediate family or a trust for the benefit of your
immediate family.

 

 

 

Vesting

 

Your Option shall vest in accordance with the vesting schedule shown on the
cover sheet so long as you continue in Service on the vesting dates set forth on
the cover sheet and is exercisable only as to its vested portion.

 

 

 

 

 

No additional shares of Stock will vest after your Service has terminated for
any reason.

 

 

 

Change in Control

 

Notwithstanding the vesting schedule set forth above, upon the consummation of a
Change in Control, this option will become 100% vested (i) if it is not assumed,
or equivalent options are not substituted for the options, by the Company or its
successor, or (ii) if assumed or substituted for, upon your Involuntary
Termination within the twelve (12) month period (or for the period of time or
lack of a period of time otherwise set forth in any employment agreement between
you and the Company or any Affiliate), following the consummation of the Change
in Control.

 

 

“Involuntary Termination” means termination of your Service by reason of
(i) your involuntary dismissal by the Company or its successor for reasons other
than Cause; or (ii) your voluntary resignation for Good Reason (and without
Cause) as defined in any applicable employment or severance agreement, plan, or
arrangement between you and the Company, or if none, then following (x) the
assignment of substantial duties or responsibilities inconsistent with your
position at the Company, or any other action by the Company which results in a
substantial diminution of your duties or responsibilities other than any such
reduction which is remedied by the Company within thirty (30) days of receipt of
written notice from you; (y) a requirement that you work principally from a
location that is twenty (20) miles further from your residence than the
Company’s principal place of business on the date of this Agreement; or (z) a
substantial reduction in your aggregate base salary and other compensation taken
as a whole, excluding any reductions caused by the failure to achieve
performance targets. To qualify as an “Involuntary Termination” you must provide
notice to the Company of any of the foregoing occurrences within ninety (90)
days of the initial occurrence and the Company shall have thirty (30) days to
remedy such occurrence. You must terminate your employment at a time agreed
reasonably with the Company, but in any event within one hundred twenty (120)
days from the initial occurrence of any of the foregoing events.

 

 

 

Forfeiture of Unvested Options / Term

 

Unless the termination of your Service triggers accelerated vesting or other
treatment of your Option pursuant to the terms of this Agreement, the Plan, or
any other written agreement between the Company or an Affiliate, as applicable,
and you, you will automatically forfeit to the Company those portions of the
Option that have not yet vested in the event your Service terminates for any
reason.

 

 

 

 

 

Your option will expire in any event at the close of business at Company
headquarters on the day before the tenth (10) anniversary of the Grant Date, as
shown on the cover sheet. Your option will expire earlier if your Service
terminates, as described below.

 

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Expiration of Vested Options After Service Terminates

 

If your Service terminates for any reason, other than death, Disability or
Cause, then the vested portion of your Option will expire at the close of
business at Company headquarters on the ninetieth (90) day after your
termination date.

 

 

 

 

 

If your Service terminates because of your death or Disability, or if you die
during the ninety (90) day period after your termination for any reason (other
than Cause), then the vested portion of your Option will expire at the close of
business at Company headquarters on the date twelve (12) months after the date
of your death or termination for Disability. During that twelve (12) month
period, your estate or heirs may exercise the vested portion of your Option.

If your Service is terminated for Cause, then you shall immediately forfeit all
rights to your entire Option and the Option shall immediately expire.

 

 

 

Forfeiture of Rights

 

If you should take actions in violation or breach of or in conflict with any
non-competition agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate or any confidentiality obligation
with respect to the Company or any Affiliate or otherwise in competition with
the Company or any Affiliate, the Company has the right to cause an immediate
forfeiture of your rights to this Option and the Option shall immediately
expire.

 

 

 

 

 

In addition, if you have exercised any Options during the two year period prior
to your actions, you will owe the Company a cash payment (or forfeiture of
shares of Stock) in an amount determined as follows: (1) for any shares of Stock
that you have sold prior to receiving notice from the Company, the amount will
be the proceeds received from the sale(s), less the option exercise price, and
(2) for any shares of Stock that you still own, the amount will be the number of
shares of Stock owned times the Fair Market Value of the shares of Stock on the
date you receive notice from the Company, less the option exercise price
(provided, that the Company may require you to satisfy your payment obligations
hereunder either by forfeiting and returning to the Company the shares or any
other shares of Stock or making a cash payment or a combination of these methods
as determined by the Company in its sole discretion).

 

 

 

Leaves of Absence

 

For purposes of this Agreement, your Service does not terminate when you go on a
bona fide leave of absence that was approved by your employer (Walker & Dunlop,
LLC or any Affiliate of the Company that directly employs you) in writing if the
terms of the leave provide for continued Service crediting, or when continued
Service crediting is required by applicable law.  Your Service terminates in any
event when the approved leave ends unless you immediately return to active
employee work.

 

 

 

 

 

Your employer may determine, in its discretion, which leaves count for this
purpose, and when your Service terminates for all purposes under the Plan in
accordance with the provisions of the Plan. Notwithstanding the foregoing, the
Company may determine, in its discretion, that a leave counts for this purpose
even if your employer does not agree.

 

 

 

Notice of Exercise

 

The Option may be exercised, in whole or in part, to purchase a whole number of
vested shares of Stock of not less than one hundred (100) shares, unless the
number of vested shares purchased is the total number available for purchase
under the option, by following the procedures set forth in the Plan and in this
Agreement.

 

 

 

 

 

When you wish to exercise this Option, you must exercise in a manner required or
permitted by the Company.

 

 

 

 

 

If someone else wants to exercise this Option after your death, that person must
prove to the Company’s satisfaction that he or she is entitled to do so.

 

 

 

Form of Payment

 

When you exercise your Option, you must include payment of the option price
indicated on the cover sheet for the shares you are purchasing. Payment may be
made in one (or a combination) of the following forms:

·        Cash, your personal check, a cashier’s check, a money order or another
cash equivalent acceptable to the Company.

·        Shares of Stock which are owned by you and which are surrendered to the
Company, including through the withholding of shares otherwise issuable upon
exercise. The Fair Market Value of the shares as of the effective date of the
option exercise will be applied to the option price.

·        By delivery (on a form prescribed by the Company) of an irrevocable
direction to a licensed securities

 

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broker acceptable to the Company to sell Stock and to deliver all or part of the
sale proceeds to the Company in payment of the aggregate option price and any
withholding taxes.

Evidence of Issuance

 

The issuance of the shares upon exercise of this Option shall be evidenced in
such a manner as the Company, in its discretion, will deem appropriate,
including, without limitation, book-entry, registration or issuance of one or
more share certificates.

 

 

 

Withholding Taxes

 

You agree as a condition of this grant that you will make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the Option exercise or sale of Stock acquired under this Option. In the event
that the Company or an Affiliate, as applicable, determines that any federal,
state, local or foreign tax or withholding payment is required relating to the
exercise of this Option or sale of Stock arising from this Option, the Company
or an Affiliate, as applicable shall have the right to require such payments
from you, or withhold such amounts from other payments due to you from the
Company or an Affiliate, as applicable (including withholding the delivery of
vested shares of Stock otherwise deliverable under this Agreement).

 

 

 

Notice and Non-Solicitation

 

You agree as a condition of this grant that in the event you decide to leave the
Company for any reason, you will provide the Company with thirty (30) days’
prior notice of your departure (during which period, in the Company’s sole
discretion, you may be placed on paid leave) and you will not commence
employment with anyone else during that period. For a period of ninety (90) days
following the termination of your employment for any reason, you will not
directly or indirectly solicit any employees of the Company for employment, or
encourage any employee to leave the Company.

Retention Rights

 

This Agreement and this Option do not give you the right to be retained by the
Company or an Affiliate in any capacity. Unless otherwise specified in an
employment or other written agreement between the Company or an Affiliate, as
applicable, and you, the Company or an Affiliate, as applicable, reserves the
right to terminate your Service at any time and for any reason.

 

 

 

Stockholder Rights

 

You, or your estate or heirs, have no rights as a shareholder of the Company
until the Stock has been issued upon exercise of your Option and either a
certificate evidencing your Stock has been issued or an appropriate entry has
been made on the Company’s books. No adjustments are made for dividends,
distributions or other rights if the applicable record date occurs before your
certificate is issued (or an appropriate book entry is made), except as
described in the Plan.

 

 

 

 

 

Your Option shall be subject to the terms of any applicable agreement of merger,
liquidation or reorganization in the event the Company is subject to such
corporate activity.

 

 

 

Clawback

 

This Award is subject to mandatory repayment by you to the Company to the extent
you are or in the future become subject to any Company “clawback” or recoupment
policy that requires the repayment by you to the Company of compensation paid by
the Company to you in the event that you fail to comply with, or violate, the
terms or requirements of such policy.

 

 

 

 

 

If the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, and you are subject
to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or
you knowingly engaged in the misconduct, were grossly negligent in engaging in
the misconduct, knowingly failed to prevent the misconduct or were grossly
negligent in failing to prevent the misconduct, you shall reimburse the Company
the amount of any payment in settlement of this Award earned or accrued during
the twelve (12) month period following the first public issuance or filing with
the United States Securities and Exchange Commission (whichever first occurred)
of the financial document that contained such material noncompliance.

 

 

 

 

 

[Notwithstanding any other provision of the Plan or any provision of this
Agreement, if the Company is required to prepare an accounting restatement, then
you shall forfeit any cash or Stock received in connection with this Award (or
an amount equal to the fair market value of such Stock on the date of delivery
if you no longer hold the shares of Stock) if pursuant to the terms of this
Agreement, the amount of the Award earned or the vesting in the Award was
explicitly based on the achievement of pre-established performance goals set
forth in this Agreement (including earnings, gains, or other criteria) that are
later determined, as a result of the accounting restatement, not to have been
achieved.] [Include if any performance goals are included in award]

 

 

 

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of
Maryland, other than any

 

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conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive law of
another jurisdiction.

The Plan

 

The text of the Plan is incorporated in this Agreement by reference.

 

 

 

 

 

Certain capitalized terms used in this Agreement are defined in the Plan, and
have the meaning set forth in the Plan.

 

 

 

 

 

This Agreement, the Plan and any employment agreement with the Company or any
Affiliate constitute the entire understanding between you and the Company
regarding this Option. Any prior agreements, commitments or negotiations
concerning this grant are superseded; except that any written consulting,
confidentiality, non-competition, non-solicitation and/or severance agreement
between you and the Company or an Affiliate, as applicable, shall supersede this
Agreement with respect to its subject matter.

 

 

 

Data Privacy

 

In order to administer the Plan, the Company may process personal data about
you. Such data includes, but is not limited to, information provided in this
Agreement and any changes thereto, other appropriate personal and financial data
about you such as your contact information, payroll information and any other
information that might be deemed appropriate by the Company to facilitate the
administration of the Plan. By accepting this grant, you give explicit consent
to the Company to process any such personal data.

Code Section 409A

 

It is intended that this Award comply with Section 409A of the Internal Revenue
Code (“Section 409A”) or an exemption to Section 409A. To the extent that the
Company determines that you would be subject to the additional 20% tax imposed
on certain non-qualified deferred compensation plans pursuant to Section 409A as
a result of any provision of this Agreement, such provision shall be deemed
amended to the minimum extent necessary to avoid application of such additional
tax. The nature of any such amendment shall be determined by the Company. For
purposes of this Award, a termination of Service only occurs upon an event that
would be a Separation from Service within the meaning of Section 409A. To the
extent that the Company determines that you would be subject to the additional
20% tax imposed on certain non-qualified deferred compensation plans pursuant to
Section 409A as a result of any provision of this Agreement, such provision
shall be deemed amended to the minimum extent necessary to avoid application of
such additional tax. The nature of any such amendment shall be determined by the
Company. For purposes of this Award, a termination of employment only occurs
upon an event that would be a Separation from Service within the meaning of
Section 409A.

 

By signing this Agreement, you agree to all of the terms and conditions
described above, in the Plan, and in any applicable employment agreement with
the Company or any Affiliate. In the event that any term of this Agreement
conflicts with the terms of an employment or other compensatory agreement
between you and the Company, the terms of such employment or compensatory
agreement shall supersede the conflicting terms herein.

 

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