Exhibit 10.31
NORTHSTAR REALTY FINANCE CORP.
EXECUTIVE INCENTIVE BONUS PLAN
1.
PURPOSE
This Executive Incentive Bonus Plan (the "Plan") is intended to provide an
incentive for superior work and to motivate executives and employees of
NorthStar Realty Finance Corp. (the "Company") toward even higher achievement
and business results, to tie their goals and interests to those of the Company
and its stockholders and to enable the Company to attract and retain highly
qualified executives and employees.
The Plan is for the benefit of Participants
(as defined below).
2.
DEFINITIONS
For purposes of this Plan:
(A)
"AFFO" MEANS FFO, PLUS OR MINUS, AS APPLICABLE, EACH OF THE
FOLLOWING: (I) NORMALIZED RECURRING EXPENDITURES THAT ARE CAPITALIZED BY THE
COMPANY AND THEN AMORTIZED, BUT WHICH ARE NECESSARY TO MAINTAIN THE COMPANY'S
PROPERTIES AND REVENUE STREAM, SUCH AS LEASING COMMISSIONS AND TENANT
IMPROVEMENT ALLOWANCES; (II) AN ADJUSTMENT TO REVERSE THE EFFECTS OF THE
STRAIGHT-LINING OF RENTS AND FAIR VALUE LEASE REVENUE UNDER SFAS 141; (III) THE
AMORTIZATION OR ACCRUAL OF VARIOUS DEFERRED COSTS INCLUDING INTANGIBLE ASSETS
AND EQUITY BASED COMPENSATION; (IV) AN ADJUSTMENT TO REVERSE THE EFFECTS OF
NON-CASH UNREALIZED GAINS/LOSSES; (V) AN ADJUSTMENT TO REVERSE THE EFFECTS OF
DPOS; AND (VI) ANY ITEM(S) THAT MANAGEMENT AND THE AUDIT COMMITTEE OF THE BOARD
OR MANAGEMENT AND THE COMMITTEE DETERMINE ARE ONE-TIME ITEMS FOR EARNINGS
REPORTING PURPOSES.
(B)
"ANNUAL BONUS" MEANS A BONUS DETERMINED AND PAID PURSUANT TO
SECTION 5.
(C)
"ANNUAL BONUS POOL PERCENTAGE" MEANS A PERCENTAGE OF THE BONUS
POOL AWARDED TO A PARTICIPANT AND PAYABLE IN THE FORM OF AN ANNUAL BONUS UNDER
THE PLAN.
(D)
"BALANCE SHEET LIQUIDITY" MEANS, AS OF A PARTICULAR DATE OF
DETERMINATION, ALL CASH AND CASH EQUIVALENTS OF THE COMPANY AND ANY SUBSIDIARY
OF THE COMPANY.
(E)
"BENEFICIAL OWNER" SHALL HAVE THE MEANING SET FORTH IN RULE 13D-3
UNDER THE EXCHANGE ACT.
(F)
"BOARD" MEANS THE BOARD OF DIRECTORS OF THE COMPANY.
(G)
"BONUS" MEANS ANY ANNUAL BONUS, DEFERRED BONUS OR LONG-TERM BONUS.
(H)
"BONUS AWARD NOTICE" MEANS A NOTICE OR AGREEMENT PROVIDED TO A
PARTICIPANT THAT SETS FORTH THE TERMS, CONDITIONS AND LIMITATIONS OF THE
PARTICIPANT'S BONUS(ES) AND BONUS POOL PERCENTAGE(S).
(I)
"BONUS POOL" MEANS FOR EACH PLAN YEAR, AN AMOUNT EQUAL TO THE SUM
OF (1) 1.75 PERCENT OF THE NORTHSTAR ADJUSTED EQUITY CAPITAL FOR SUCH PLAN YEAR
(DETERMINED BASED ON THE AVERAGE OF THE NORTHSTAR ADJUSTED EQUITY CAPITAL AS OF
THE FIRST AND LAST DAY OF SUCH PLAN YEAR) AND (2) 25 PERCENT OF THE COMPANY'S
EQUITY ADJUSTED AFFO FOR SUCH PLAN YEAR (DETERMINED AS OF THE LAST DAY OF SUCH
PLAN YEAR) ABOVE A NINE PERCENT ANNUAL RETURN ON NORTHSTAR ADJUSTED EQUITY
CAPITAL HURDLE.
(J)
"BONUS POOL PERCENTAGE" MEANS AN ANNUAL BONUS POOL PERCENTAGE, A
DEFERRED BONUS POOL PERCENTAGE OR A LONG-TERM BONUS POOL PERCENTAGE.
PARTICIPANTS MAY BE ALLOCATED BY THE COMMITTEE AN ANNUAL BONUS POOL PERCENTAGE,
A DEFERRED BONUS POOL PERCENTAGE, A LONG-TERM BONUS POOL PERCENTAGE OR ANY
COMBINATION THEREOF.
THE INITIAL ALLOCATION OF BONUS POOL PERCENTAGES AMONG
PARTICIPANTS APPLICABLE TO