Exhibit
10.31


 


CAPMARK FINANCIAL GROUP
INC.


DISCRETIONARY
BONUS PLAN


 


CAPMARK FINANCIAL
GROUP INC. (the “Company”) hereby establishes this DISCRETIONARY BONUS PLAN
(the “Bonus Plan”) in accordance with the terms provided herein.


 


Section 1.  Discretionary
Bonus Pool Purpose.  The Company’s
main purposes in providing the discretionary pool described within the Bonus
Plan (the “Discretionary Bonus Pool”) include: (i) linking employee
compensation to the Company’s annual and long-term goals and general success, (ii) aligning
individual and Business Unit performance with the Company’s business plans,
strategic initiatives and corporate policies (including but not limited to compliance
with the Company’s ethics policies and applicable laws), (iii) promoting cooperation
among and between the Company’s Business Units and (iv) providing an
incentive compensation program that is competitive with market practices and
opportunities with respect to the Company’s employees.


 


Section 2.  Effective
Date.  This Bonus Plan shall first be
effective for the Bonus Plan Year ending December 31, 2007.  The Bonus Plan will remain in effect from
year to year (each calendar year shall be referred to herein as a “Bonus Plan
Year”) until formally amended or terminated in accordance with Section 10.


 


Section 3.  Eligibility.  Each individual employed by the Company or
one of its subsidiaries (collectively, “Capmark”) on a full-time basis as of September 1
of the Bonus Plan Year, who is a Capmark employee in good standing as of December 31
of that Bonus Plan Year and is employed by Capmark at the time that
Discretionary Bonus Pool payments are made shall be eligible to participate in
the Bonus Plan.  In addition, the Company’s
Executive Vice President & Chief Administrative Officer (the “CAO”)
may qualify any other employee of Capmark to be eligible for participation in
the Bonus Plan.  Such qualified
eligibility, if any, shall be set forth in writing by the CAO.  Notwithstanding anything to the contrary, the
CEO and/or the CAO may in their sole discretion require any or all participants
in the Bonus Plan to enter into a written agreement as a condition to receiving
a Discretionary Bonus Pool payment, which agreement may include, inter alia, certain performance obligations, a deferred
payment or vesting schedule, reimbursement or so-called “claw-back” provisions
in favor of Capmark and such other terms and conditions as determined by the
CEO and/or the CAO in their sole discretion.


 


Section 4.  Administration,
Recommendations and Determinations.  Under
the direction of the Company’s Chief Executive Officer (the “CEO”), the CAO shall
administer the Discretionary Bonus Pool in accordance with guidance provided by
the Executive Development and Compensation Committee of the Board of Directors
(the “Committee”), including the process outlined in this Section 4 and Section 6
below and the calculations described in Section 5.  The Committee shall at all times retain the authority
and discretion to reduce, increase, or eliminate the Discretionary Bonus Pool, and/or
substitute any form of payment or award (e.g., common stock, restricted stock
units, or other securities) pursuant to the Bonus Plan without regard to any
particular factors specified herein.  The
CAO shall interpret the Bonus Plan and make all determinations required to be
made hereunder in his/her discretion; all such determinations shall be final,
binding and conclusive, subject to any determination by the Committee.  In the event of a conflict between a CAO
determination and a Committee determination, the latter shall be controlling.


 


(a)           As soon as
practicable in the beginning of each Bonus Plan Year, the Committee shall
review and approve (i) the Bonus Plan, (ii) the methodology for calculating
the aggregate dollar value of the Discretionary Bonus Pool, and (iii) the
projected aggregate 


 

















 


payout under the Bonus Plan.  At
such time, the Committee shall establish for the Bonus Plan Year preliminary
targets for both the percentage of the projected Net Income (defined below) to
be used in calculating the Discretionary Bonus Pool (the “Committee-Approved
Percentage”) and the dollar value of the Discretionary Bonus Pool.


 


(b)           As soon as
practicable after the end of each Bonus Plan Year, the CEO and the CAO shall
present to the Committee their recommendations with respect to the applicable
Discretionary Bonus Pool, including their calculations and rationale for such
recommendations.  Taking into account the
joint recommendation of the CEO and the CAO, the Committee shall determine in
its sole discretion the final Committee-Approved Percentage and the actual
dollar value of the Discretionary Bonus Pool for such Bonus Plan Year.


 


Section 5.  Calculations
and Definitions.  The Discretionary
Bonus Pool shall equal (1) the product of (i) the Committee-Approved
Percentage multiplied by (ii) the sum of 
(A) Adjusted Pre-Tax Net Income plus (B) Total Compensation
Expense, minus (2) Fixed Compensation. 
Capitalized terms used in this Section 5 not previously defined
herein are defined below.  In algebraic terms:


 


(Committee-Approved
Percentage) x ((Adjusted Pre-Tax Net Income) + (Total Compensation Expense)) –


 


Fixed
Compensation = Discretionary Bonus Pool


 


For purposes of calculating the Discretionary Bonus
Pool, the following terms shall have the meanings as set forth herein.  For purposes of the defined terms used
herein, each reference to an item of revenue or expense shall be deemed to
refer to the consolidated amount of such revenue or expense, as the case may
be, of the Company and its subsidiaries for the applicable Bonus Plan Year.


 


Adjusted Pre-Tax Net Income shall mean an amount equal to Total
Revenue minus Total Expenses before income tax provisions.


 


Total Revenue shall mean an amount equal to the adjusted
revenue ; provided, however that revenue from extraordinary items, as
determined by the Company’s Chief Financial Officer (the “CFO”) and approved by
the CEO in their discretion will not be included in determining Total Revenue.


 


Total Expenses shall mean an amount equal to the adjusted
expenses, including expense accruals, for the Bonus Plan Year; provided,
however, that  the Company’s extraordinary
expenses as determined by the CFO and approved by the CEO in their discretion will
not be included in determining Total Expenses.


 


Total Compensation
Expense shall
mean an amount equal to the sum of (i) Fixed Compensation and (ii) the
Discretionary Accrual for the Bonus Plan Year.


 


Discretionary
Accrual shall
mean the projected discretionary bonus expense.


 


Fixed
Compensation
shall mean an amount equal to sum of the following expenses (i) the aggregate
base salary for all employees, (ii) all commission-related compensation
and (iii) the aggregate cost of all employee benefits plans and programs.


 


Section 6.  Allocation
of the Discretionary Bonus  Pool. 
The CEO will allocate a portion of the Discretionary Bonus Pool to each
member of the Executive Committee (the “Executive”), creating a sub-pool for
distribution by the Executive to eligible employees within his or her respective
business unit (the “Allocation”).  The
CEO will determine such Allocations taking 


 


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into account in
his sole discretion the following considerations: (i) the portion of the
Company’s net income and return on equity attributable to each business unit, (ii) cost-saving,
performance-enhancing contributions to the Company attributable to business
units not expected to generate revenue, (iii) regulatory and risk-related
factors, (iv) comparative data and other information about the markets in
which the Company operates as applicable to each business unit and (v) such
other facts and circumstances as the CEO determines to be relevant in his sole
discretion.  It is understood that
precise, reliable and objective information with respect to all of the
foregoing considerations will not always be available for any given Bonus Plan
Year and that the relative significance and weight of such considerations can
and will vary from time to time and for each business unit.  In addition, the CEO will recommend to the
Committee that a portion of the Discretionary Bonus Pool be paid to each
Executive.  Taking into account such
recommendations, the Committee will determine in its sole discretion the
portion of the Discretionary Bonus Pool to be paid to each Executive.


 


Section 7.  Individual
 Bonus Awards.  Each Executive will allocate his or her
Allocation among all employees in his or her business unit (other than the
Executive) who are eligible to participate in the Bonus Plan (each such amount,
hereinafter referred to as an “Individual Bonus Award”).  Individual Bonus Awards shall be subject to
review and approval by the CAO and the CEO.   
Unless otherwise authorized by the Committee and directed by the CEO,
once approved in accordance with the Bonus Plan, all Individual Bonus Awards
and discretionary bonuses for each of the Executives shall be paid in cash
within seventy five (75) days following the end of a Bonus Plan Year.  Notwithstanding anything to the contrary: (i) no
Individual Bonus Award or any other payment pursuant to the Bonus Plan shall be,
or deemed to be, earned by any individual prior to the time it is actually paid
to such individual, (ii) no Executive or other employee of Capmark shall
have any vested interest or entitlement to any payment or award of any portion
of the Discretionary Bonus Pool prior to actual payment thereof and (iii) no
Executive or other employee shall have any right to receive information
concerning the deliberations of Capmark, including but not limited to deliberations
involving the Committee, the CEO, the CAO or the CFO, with respect to Bonus
Plan and the Discretionary Bonus Pool (including but not limited to the
Allocations and the Individual Bonus Awards).


 


Section 8.  Impact
on Benefit Plans.  Payments under the
Bonus Plan shall not be considered as earnings for purposes of the Company’s
qualified retirement plans or any such retirement or benefit plan unless
specifically provided for and defined under such plans.


 


Section 9.  Termination.  No Individual Bonus Award or any other
payment pursuant to the Bonus Plan shall be paid to any Executive or other employee
who becomes separated from service with the Company prior to actual payment thereof.  Nothing in the Bonus Plan shall confer any
right to any Executive or other employee to receive any payment under the Bonus
Plan or otherwise, or to continue to be employed by the Company.


 


Section 10.  Amendment
or Termination of this Bonus Plan. 
The Company shall have the right to amend or terminate the Bonus Plan at
any time by written action approved by the Committee.


 


Section 11.  Governing Law.  This Bonus Plan shall be governed by and
interpreted in accordance with the internal laws of the State of Pennsylvania,
without regard to its conflicts of law provisions.


 


Each of the
undersigned has approved this Bonus Plan as of the 31st day of
December, 2007.


 


(Signature page follows)


 


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  William F.
  Aldinger

  	
   

  	
  Linda A. Pickles

  
	
  Chief Executive
  Officer

  	
   

  	
  Executive Vice President &

  
	
   

  	
   

  	
  Chief
  Administrative Officer

  



 


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