Document:

EXHIBIT 10.7

 

 

BIMINI
MORTGAGE MANAGEMENT, INC. 2004

PERFORMANCE
BONUS PLAN

 

 

 

1.                                      Purpose of the Plan

                The Plan is intended to advance
the interests of the Company by providing an opportunity to selected employees
of the Company to earn bonuses, and to encourage and motivate them to achieve
superior operating results for Bimini Mortgage Management, Inc.  The Plan is effective as of August 13, 2004
and is an amendment and complete restatement of a predecessor hereto adopted by
the Committee (as defined below) on May 4, 2004.

2.                                      Definitions

As used in this Plan, the following definitions
apply:

“Annual Supplemental Bonus” means the bonus
described in Section 4(b).

“Board” means the Board of Directors of Bimini
Mortgage Management, Inc.

“Bonus” means a Formula Bonus, an Annual
Supplemental Bonus or any bonus described in Section 3(c).

“Committee” means the Compensation Committee of the
Board.

“Company” means Bimini Mortgage Management, Inc.,
and its subsidiaries.

“Formula Bonus” means the bonus described in Section
4(a).

“Key Employee” means an officer or other employee of
the Company whose position and responsibilities, in the judgment of the
Committee, enable the employee to have a significant impact on the operating
results of the Company.

“Performance Period” means each applicable fiscal
year of the Company.

“Plan” means this Bimini Mortgage Management, Inc.
2004 Performance Bonus Plan, as the same may be amended from time to time.

“Termination of Service” means a Key Employee’s termination of
employment or other service, as applicable, with the Company.  Cessation of service as an officer,
employee, director or consultant shall not be treated as a Termination of
Service if the Key Employee continues without interruption to serve thereafter
in another one (or more) of such other capacities.

3.             Bonuses —
In General

                (a)  There are two types of bonuses provided for
hereunder: (i) a Formula Bonus and (ii) an Annual Supplemental Bonus.

(b) Eligibility
from among Key Employees shall be determined by the Committee.  The Formula Bonus shall be determined based
on a formula, as described in Section 4(a). 
The Committee may determine the Annual Supplemental Bonus a Key Employee
will receive with regard to a Performance Period or other period. Subject to
the provisions of the Plan, the Committee shall (i) determine and designate
from time to time those Key Employees to whom Bonuses are to be granted; (ii)
determine,

 

 

consistently
with the Plan, the amount of the Bonus to be granted to any Key Employee for
any Performance Period; (iii) determine, consistently with the Plan, the terms
and conditions of each Bonus; and (iv) determine, consistently with the Plan,
whether the stock (or stock-based grants) will vest upon the occurrence of a
change in control (as may be defined for purposes of the applicable grant) and
in the case of terminations of employment by the Company without cause (as may
be defined for purposes of the applicable grant) or by the Key Employee for
such good reason as may be specified by the Committee. Bonuses may be so
awarded by the Committee prior to the commencement of any Performance Period or
at the end of or after such Performance Period.

                (c)           The Committee may grant discretionary
bonuses within the parameters of the Plan based on Company performance
otherwise than as specified in Section 3(a) on account of a registration
statement on Form S-11 having been declared effective and on account of the
completion of a capital raising event.

4.             Amount of
Awards

                (a)           Unless otherwise
provided for by the Committee, the Formula Bonus is determined pursuant to a
formula, determined as follows: if the Company’s funds from operations
during the applicable quarterly period exceed the product of (i) 25% (except
for purposes of the last sentence of this Section 4(a)) of (A) the annualized
10-year U.S. Treasury rate for the applicable quarterly period, as determined
by the Committee in accordance with such rules as it may prescribe, plus (B)
2.25%, and (ii) the weighted average net book value of the Company (any such excess,
the “Excess FFO”), then the Formula Bonus shall be calculated and paid
quarterly, as follows:

 

(i)       15% of the Excess FFO as to
the initial $1.0 billion of invested assets;

(ii)    10% of the Excess FFO as to
the invested assets over $1 billion, but under $2 billion; and

(iii)                               5% of the
Excess FFO as to the invested assets over $2 billion.

The foregoing pool shall be allocated amongst Key
Employees as determined by the Committee. 
Formula Bonuses shall never cause general and administrative (G&A)
expenses to exceed 18 basis points of 
assets, as determined by the Committee. 
Notwithstanding the foregoing provisions of this Section 4(a), at the
end of each fiscal year, a hypothetical Formula Bonus shall be determined based
on the foregoing formula, and performance, on a full-year basis (and, for the
avoidance of doubt, without regard to the 25% reduction in clause (i) of the
first sentence of this Section 4(a)) and the final quarterly Formula Bonus for
the year shall be increased or decreased (but not to below zero) so that the
aggregate of the four quarterly Formula Bonuses for the year conforms to such
hypothetical Formula Bonus, as determined by the Committee.

(b)           The
Committee shall decide whether to grant an Annual Supplemental Bonus, in
addition to the Formula Bonus, based on the performance of the Company as
compared with its peer group and other material factors not otherwise taken
into account for purposes of the Formula Bonus, considering, without
limitation, the Key Employee’s aggregate Formula Bonus and other compensation
that would be payable in the aggregate in the absence of the Annual
Supplemental Bonus.  Subject to the
other terms of the Plan, no Annual Supplemental Bonus shall exceed 100% of the
Key Employee’s aggregate salary for the year. 
Notwithstanding the foregoing, for any employee with an employment
agreement that contemplates bonus payments, the Committee may provide in its
discretion that Annual Supplemental Bonuses in excess of 100% of the Key
Employee’s aggregate salary for the year may be paid.  Further, without limitation by the Plan, any capital-raising
bonus expressly provided for in an employment agreement shall be payable,
without duplication, in accordance with the applicable employment agreement, in
addition to the Bonuses hereunder.

 

2

 

                (c)           The Committee may provide for partial Bonus payments at
target and other levels.  Any
performance hurdles or measures for any Bonuses may be adjusted by the
Committee in its discretion to reflect (i) dilution from corporate acquisitions
and share offerings and (ii) changes in applicable accounting rules and
standards.

                (d)           The Committee may determine that Bonuses shall be paid in
cash or stock (or other stock-based grants), or a combination thereof; provided
that, unless otherwise determined by the Committee, (i) Formula Bonuses shall,
at the election of the Key Employee, be paid in cash, stock (or other
equity-based grants) or any combination thereof, (ii) Annual Supplemental
Bonuses shall be paid 60% in cash and 40% in stock (or other equity-based
grants) and (iii) Bonuses under Section 3(c) shall be paid in cash.  The Committee may provide that any such
stock or stock-based grants be made under the Bimini Mortgage Management, Inc.
2003 Long Term Incentive Compensation Plan (the “LTIP”) or any other
equity-based plan or program of the Company and, notwithstanding any provision
of the Plan to the contrary, in the case of any such grant, the grant shall be
governed in all respects by the LTIP or such other plan or program of the
Company; provided that, unless otherwise provided by the Committee, Annual
Supplemental Bonus payments in stock (or other equity-based grants) shall vest
in equal proportions over three years and Formula Bonus payments in stock (or
other equity-based grants) shall vest at the time of grant.

                (e)           The Committee may provide for programs under which the
payment of Bonuses may be deferred at the election of the Key Employee.

5.             Termination of Employment

 

                (a)           Unless
otherwise determined by the Committee, no Bonus payments shall be made to any
Key Employee who is not employed on the date payment is to be made; provided
that no Bonuses shall be made in any event to a Key Employee who is terminated
for “Cause.” For these purposes, Cause shall mean, unless otherwise provided in
the grantee’s award agreement, (i) engaging in (A) willful or gross
misconduct or (B) willful or gross neglect, (ii) repeatedly failing to
adhere to the directions of superiors or the Board or the written policies and
practices of the Company or its affiliates, (iii) the commission of a felony or
a crime of moral turpitude, or any crime involving the Company, or any
affiliate thereof, (iv) fraud, misappropriation or embezzlement, (v) a material
breach of the Key Employee’s employment agreement (if any) with the Company or
its affiliates, or (vi) any illegal act materially detrimental to the Company
or its affiliates; provided, however, that, if at any particular time the
grantee is subject to an effective employment agreement with the Company, then,
in lieu of the foregoing definition, “Cause” shall at that time have such
meaning as may be specified in such employment agreement.

                (b)           Unless otherwise provided by the Committee, no portion of
the 40% Annual Supplemental Bonus awarded in stock (in accordance with Section
4(d)) shall be transferred to the Key Employee if the Key Employee has a
Termination of Service before three years from the date of the grant and such
Shares shall be forfeited upon such termination.

6.             Administration
of the Plan; Amendment and Termination

(a)           The Plan will be administered by the
Committee.

(b)           The
Committee will have full power to amend, construe, interpret and administer the
Plan and to amend and rescind the rules and regulations for its administration,
with such interpretations to be conclusive and binding on all persons and
otherwise accorded the maximum deference permitted by law.  In the event of any dispute or disagreement
as to the interpretation of the Plan or of any rule, regulation or procedure,
or as to any question, right or obligation arising from or related to the Plan,
the decision of the Committee shall be final and binding upon all persons.

 

3

 

(c)           The
Committee will have discretion to determine whether a Bonus is established for
particular Key Employees.  The
Committee’s decisions and determinations under the Plan need not be uniform and
may be made selectively among Key Employees, whether or not such Key Employees are
similarly situated.

(d)           No
Key Employee shall have any claim to a bonus until it is actually granted under
the Plan.  To the extent that any person
acquires a right to receive payments from the Company under the Plan, such
right shall be no greater than the right of an unsecured general creditor of
the Company.  All payments provided for
under the Plan shall be paid in cash from the general funds of the Company. The
Plan does not create a fiduciary relationship between the Board or Committee on
one hand, and employees, their beneficiaries or any other persons on the other.

(e)           The
Board may, at any time, amend, suspend or terminate the Plan; provided that no
amendment, suspension or termination of the Plan shall, without the consent of
any affected Key Employee, alter or impair any rights of such Key Employee to
receive Bonuses.  No amendment,
suspension or termination shall retroactively impair the rights of any person
with respect to a Bonus.

7.             Beneficiaries

 

Each Key Employee shall
designate a beneficiary to receive such Key Employee’s Bonus, if any, in the
event of death.  In the event of a
failure to designate a beneficiary, amounts, if any, so payable to a Key
Employee in the event of death shall be payable to the estate of such Key
Employee.  The last designation received
by the Company shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the Company
prior to the Key Employee’s death, and in no event shall it be effective as of
a date prior to such receipt.  If no
such beneficiary designation is in effect at the time of a Key Employee’s
death, or if no designated beneficiary survives the Key Employee or if such
designation conflicts with law, the Key Employee’s estate shall be entitled to
receive the amounts, if any, payable under the Plan upon his or her death.  If the Company is in doubt as to the right
of any person to receive such amounts, the Company may retain such amounts,
without liability for any interest thereon, until the Company determines the
rights thereto, or the Company may pay such amounts into any court of
appropriate jurisdiction and such payment shall be a complete discharge of the
liability of the Company therefor.  No
rights to Bonuses granted hereunder shall be transferable by a Key Employee
otherwise than by will or the laws of descent and distribution.

8.             Miscellaneous

 

(a)           The
Company may cause to be made, as a condition precedent to the payment of any
Bonus, or otherwise, appropriate arrangements with the Key Employee or his or
her beneficiary for the withholding of any federal, state, local or foreign
taxes.

(b)           Nothing in the Plan and no award of
any Bonus which is payable immediately or in the future (whether or not future
payments may be forfeited), will give any Key Employee a right to continue to
be an employee of the Company or in any other way affect the right of the
Company to terminate the employment of any Key Employee at any time.

(c)           All elections, designations, requests,
notices, instructions and other communications from a Key Employee, beneficiary
or other person, required or permitted under the Plan, shall be in such form as
is prescribed from time to time by the Committee.

(d)           In
the event that the Company’s fiscal year is changed, the Committee may make
such adjustments to the Plan, as he or she may deem necessary or appropriate to
effectuate the intent of the Plan.  All
such adjustments, without the need for Plan amendment, shall be effective and
binding for all Bonuses and otherwise for all purposes of the Plan.

 

4

 

(e)           The use of captions in this Plan is
for convenience.  The captions are not
intended to provide substantive rights.

 

5EXHIBIT 10.8

 

BIMINI MORTGAGE MANAGEMENT, INC.

2003 LONG TERM INCENTIVE COMPENSATION PLAN

PHANTOM SHARE AWARD AGREEMENT

 

AGREEMENT
by and between Bimini Mortgage Management, Inc., a Maryland corporation (the
“Company”) and Jeffrey J. Zimmer (the
“Grantee”), dated as of the 13th day of August, 2004.

 

WHEREAS,
the parties have entered into a Phantom Share Award Agreement dated as of the
15th day of June, 2004, and this Agreement is an amendment and complete
restatement thereof;

 

WHEREAS,
the Company maintains the Bimini Mortgage Management, Inc. 2003 Long Term
Incentive Compensation Plan, as it may be amended from time to time (the
“Plan”) (capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto by the Plan);

 

WHEREAS, the Grantee is an employee of the Company;

 

WHEREAS, it is the intention of the Company,
that for accounting purposes, compensation charges to the Grantee are to follow
the vesting schedule set forth below; and

 

WHEREAS,
the Committee has determined that it is in the best interests of the Company
and its shareholders to grant Phantom Shares to the Grantee subject to the
terms and conditions set forth below.

 

NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.             Grant of Phantom Shares.

 

The
Company hereby grants the Grantee 186,500 Phantom Shares.  The Phantom Shares are subject to the terms
and conditions of this Agreement, and are also subject to the provisions of the
Plan.  The Plan is hereby incorporated
herein by reference as though set forth herein in its entirety.

 

2.             Vesting.

 

The Phantom Shares shall be subject to the following:

 

(a)           The Phantom Shares
shall vest, except as provided herein, if and as employment continues, pursuant
to the following schedule: 

 

	
  Number
  of Phantom Shares

  	
   

  	
  Vesting Date

  
	
  8,500

  	
   

  	
  August 15, 2004

  
	
  13,650

  	
   

  	
  November 15, 2004

  
	
  13,650

  	
   

  	
  February 15, 2005

  
	
  13,700

  	
   

  	
  May 15, 2005

  
	
  13,700

  	
   

  	
  August 15, 2005

  
	
  13,700

  	
   

  	
  November 15, 2005

  
	
  13,700

  	
   

  	
  February 15, 2006

  
	
  13,700

  	
   

  	
  May 15, 2006

  
	
  13,700

  	
   

  	
  August 15, 2006

  
	
  13,700

  	
   

  	
  November 15, 2006

  
	
  13,700

  	
   

  	
  February 15, 2007

  
	
  13,700

  	
   

  	
  May 15, 2007

  
	
  13,700

  	
   

  	
  August 15, 2007

  
	
  13,700

  	
   

  	
  November 15, 2007

  

 

 

(b)           Upon Termination of
Service, all Phantom Shares which have not vested prior to or concurrently with
such Termination of Service shall thereupon, and with no further action, be
forfeited by the Grantee.

 

(c)           The Phantom Shares shall fully vest upon (i) Termination of Service by
the Company without Cause or for Disability, (ii) Termination of Service by the
Grantee for “Good Reason” (as defined below), within 30 days of the occurrence
(or initial occurrence, in the case of a continuing condition) thereof, (iii)
the Grantee’s death while employed or (iv) the occurrence of a Change of
Control while employed.  For these purposes,
“Good Reason” shall mean, without the Grantee’s prior consent, a material
diminution by the Company in the Grantee’s title, duties or responsibilities;
provided that (i) if the Grantee wishes to terminate for Good Reason, the
Grantee shall give notice to the Company, and (ii) Good Reason shall not be
deemed to exist if the Company cures any such diminution within a reasonable
period (which shall be at least 15 days) after receipt of such notice.

 

(d)           Notwithstanding
any other provision hereof, the Phantom Shares shall also fully vest if
and as provided in the employment agreement between the Grantee and the Company
as amended from time to time (the “Employment Agreement”), if and to the extent
the Employment Agreement is in effect at the relevant time, and nothing herein
shall limit any of the Grantee’s rights under the Employment Agreement.

 

3.             Dividend
Equivalent Rights.

 

A Dividend
Equivalent Right is hereby granted to the Grantee, consisting of the right to
receive, with respect to each Phantom Share, cash in an amount equal to the cash
dividend distributions paid in the ordinary course on a Share to the Company’s
common shareholders (each, a “Dividend Payment”), as set forth below.  For each Phantom Share then outstanding,
whether or not then vested, if a cash dividend is payable in the ordinary
course on a Share, the Company shall make a payment to the Grantee in an amount
equal to the applicable Dividend Payment, on or about the date of the Dividend
Payment; provided that the Grantee may elect, in accordance with such
procedures as may be prescribed by the Committee, to receive, in lieu of such
Dividend Payment, a number of additional Phantom Shares equal to (x) the
otherwise payable Dividend Payment, divided by (y) the Fair Market Value of a
Share on the date of the Dividend Payment.

 

4.             Miscellaneous.

 

(a)           THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF FLORIDA, WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS.  The captions of
this Agreement are not part of the provisions hereof and shall have no force or
effect.  This Agreement may not be
amended or modified except by a written agreement executed by the parties
hereto or their respective successors and legal representatives.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

 

(b)           The Committee may make
such rules and regulations and establish such procedures for the administration
of this Agreement as it deems appropriate. 
Without limiting the generality of the foregoing, the Committee may
interpret this Agreement, with such interpretations to be conclusive and
binding on all persons and otherwise accorded the maximum deference permitted
by law.   In the event of any dispute or
disagreement as to the interpretation of this Agreement or of any rule,
regulation or procedure, or as to any question, right or obligation arising
from or related to this Agreement, the decision of the Committee shall be final
and binding upon all persons.

 

2

 

(c)           All notices hereunder
shall be in writing, and if to the Company, shall be delivered to the Board or
mailed to its principal office, addressed to the attention of the Board; and if
to the Grantee, shall be delivered personally, sent by facsimile transmission
or mailed to the Grantee at the address appearing in the records of the
Company.  Such addresses may be changed
at any time by written notice to the other party given in accordance with this
paragraph 4(c).

 

(d)           The failure of the
Grantee or the Company to insist upon strict compliance with any provision of
this Agreement or the Plan, or to assert any right the Grantee or the Company,
respectively, may have under this Agreement or the Plan, shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement or the Plan.

 

(e)           Nothing in this
Agreement shall confer on the Grantee any right to continue in the employ or
other service of the Company or its Subsidiaries or interfere in any way with
the right of the Company or its Subsidiaries and its shareholders to terminate
the Grantee’s employment or other service at any time.

 

(f)            The adjustment
provisions of Section 13 of the Plan shall not apply in respect of any change
in capital structure undertaken before or concurrently with the Company’s
initial public offering.

 

(g)           This Agreement contains
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, written or oral, with respect
thereto, other than the Employment Agreement.

 

3

 

IN WITNESS WHEREOF, the Company and the
Grantee have executed this Agreement as of the day and year first above
written.

 

	
   

  	
  BIMINI MORTGAGE MANAGEMENT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert E. Cauley

  	
   

  
	
   

  	
  Name:

  	
  Robert E. Cauley

  
	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey J. Zimmer

  	
   

  
	
   

  	
  Jeffrey J. Zimmer

  	
   

  
						

 

4

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