Document:

Exhibit 10.2

 

Executive
Compensation Summary

 

	
  Name/Title

  	
   

  	
  2005 Base

  Salary

  	
   

  	
  2005 Actual

  Annual Incentive

  Bonus Payment

  	
   

  	
  Base Salary

  In Effect on 1/1/06

  	
   

  	
  2006 Maximum

  Annual Incentive

  Bonus Payment

  (maximum

  percentage of

  1/1/06 base

  salary)

  	
   

  	
  2006 Base Salary

  Effective 4/1/06

  	
   

  
	
  Douglas K. Freeman

  Chairman and Chief Executive Officer

  	
   

  	
  $

  	
  550,000

  	
   

  	
  $

  	
  83,600

  	
   

  	
  $

  	
  550,000

  	
   

  	
  150

  	
  %

  	
  $

  	
  625,000

  	
   

  
	
  R. Theodore Brauch

  Chief Risk Executive

  	
   

  	
  $

  	
  150,000

  	
   

  	
  $

  	
  29,858

  	
   

  	
  $

  	
  150,000

  	
   

  	
  75

  	
  %

  	
  $

  	
  175,000

  	
   

  
	
  Steven F. Herbert

  Chief Finance Executive

  	
   

  	
  $

  	
  220,500

  	
   

  	
  $

  	
  111,915

  	
   

  	
  $

  	
  220,500

  	
   

  	
  150

  	
  %

  	
  $

  	
  270,000

  	
   

  
	
  Charles E. Mapson

  Chief Legal Executive

  	
   

  	
  $

  	
  180,000

  	
   

  	
  $

  	
  33,962

  	
   

  	
  $

  	
  180,000

  	
   

  	
  75

  	
  %

  	
  $

  	
  200,000

  	
   

  
	
  Jerald W. McCoy

  Chief Capital Markets Executive

  	
   

  	
  $

  	
  225,000

  	
   

  	
  $

  	
  83,824

  	
   

  	
  $

  	
  225,000

  	
   

  	
  150

  	
  %

  	
  $

  	
  225,000

  	
   

  
	
  William M. Ross

  Chief Strategic Initiatives Executive

  	
   

  	
  $

  	
  225,000

  	
   

  	
  $

  	
  125,798

  	
   

  	
  $

  	
  225,000

  	
   

  	
  150

  	
  %

  	
  $

  	
  225,000Exhibit 10.3

 

NetBank, Inc.

Amended and Restated Mid-Term
Incentive Plan

 

 (Effective January 1, 2006)

 

ARTICLE 1.                                INTRODUCTION.

 

The purpose of the Plan is to promote the long-term
operational and financial success of NetBank and the creation of shareholder
value by (a) encouraging Participants to focus on critical operational and
financial objectives, (b) enhancing the attraction and retention of
Participants and (c) creating Participant incentives linked to the
performance of NetBank as reflected in NetBank, Inc. net income before tax
and net income before tax and overhead for each Business Segment, or both, as
defined in this Plan.

 

ARTICLE 2.                                DEFINITIONS.

 

“Award” shall mean the granting of a Target
Incentive to an Employee of NetBank and evidenced by a properly signed and
executed Agreement.

 

“Agreement” shall mean the written Mid-Term
Incentive Plan Award Agreement entered into by a Participant and NetBank for
the award of a Target Incentive, which may vest to the Participant based
on performance assessed relative to the Target Performance over the Performance
Period.

 

“Beneficiary” shall mean the person designated
by a Participant (on a form supplied by NetBank) to receive any remaining
payment under the Plan in the event of the Participant’s death. If the
Participant has no such designated Beneficiary, the term “Beneficiary” shall
mean the executors or administrators of the Participant’s estate or any person
who has acquired the Shares directly from the Participant by way of bequest or
inheritance.

 

“Business Segment Net Income Before Tax” shall
mean the portion of NetBank Net Income Before Tax and before overhead
attributable to a business segment of NetBank.

 

“Cause” shall have the same meaning as given to
the term under the Stock Incentive Plan.

 

“Change In Control” shall have the same meaning
as given to the term under the Stock Incentive Plan.

 

“Change in Control Window Period” shall mean
the period of time beginning on the effective date of a Change In Control and
ends 12 months after the effective date of a Change In Control.

 

“Committee” shall mean the Compensation
Committee of the Board of Directors of NetBank.

 

“Constructive Termination” shall mean, with
respect to a Participant, a material reduction in annual base salary, a
material diminution in powers, responsibilities or duties, or a requirement to
relocate, except for office relocations that would not increase the one-way
commute distance to work by more than 100 miles.

 

“Date of Award” shall mean the effective date
of the Award of Shares to a Participant, as determined by the Committee and
reflected in an Agreement.

 

“Employee” shall mean an individual employed
full-time by and compensated by NetBank.

 

“NetBank Net Income Before Tax” shall mean net
income before tax (as defined under US Generally Accepted Accounting
Principles) earned by NetBank over the Performance Period

 

 

“NetBank” shall mean NetBank, Inc., a
Georgia corporation, and any successor entity, including, where the context
requires, any subsidiary or other company in a chain of corporations connected
through stock ownership with NetBank, Inc. The term “NetBank” shall also
mean, where the context requires, any corporation, limited liability company or
limited liability partnership that becomes the owner of substantially all the assets
of NetBank.

 

“Participant” shall mean an Employee who holds
an Award for a specified Performance Period.

 

“Performance Period” shall mean the period of
time, as determined by the Committee, over which NetBank Net Income Before Tax
and/or Business Segment Net Income Before Tax is measured relative to Target
Performance for purposes of calculating a payout from the Plan.

 

“Plan” shall mean this NetBank, Inc.
Amended and Restated Mid-Term Incentive Plan, a program established by the
Committee pursuant to Section 3.1 of the Stock Incentive Plan.

 

“Qualifying Termination” shall mean the
occurrence of either of the following events:

 

NetBank unilaterally terminates the Participant’s employment with
NetBank for any reason excluding Cause; or,

 

The Participant separates from employment with NetBank within 30 days
of a Constructive Termination that occurs during a Change In Control Window
Period.

 

“Settlement Date” shall mean, as applicable,
the last day of a Performance Period; the date of an event contemplated under
Sections 6.3 and 6.4; or the effective date of a corporate transaction
contemplated under Article 8.

 

“Share” shall mean one common share of NetBank
capital stock.

 

“Stock Incentive Plan” shall mean the NetBank, Inc.
1996 Stock Incentive Plan, as the same may be amended from time to time.

 

“Target Incentive” shall mean a target payment,
expressed as a dollar value, of an Award to a Participant, payable in Shares.

 

“Target Performance” shall mean the targeted
NetBank Net Income Before Tax and/or Business Segment Net Income Before Tax as
established by the Committee at the beginning of the Performance Period and set
forth in each Agreement.

 

“Total Disability” is defined in Section 6.3(c).

 

“Vested or Vesting” refers to a Participant’s
right to retain Shares delivered in payment of an Award, as contemplated by Article 6
of the Plan.

 

ARTICLE 3.                                ADMINISTRATION.

 

The Committee shall administer the Plan in accordance
with the administrative provisions of the Stock Incentive Plan.

 

ARTICLE 4.                                DESCRIPTION OF PLAN.

 

At the end of a Performance Period (or any earlier
date contemplated by Section 6.3 or 6.4 or Article 8), each
Participant will receive a number of Shares having a fair market value, as
determined as of the Settlement Date, equal to a percentage of the Target
Incentive, as determined under Article 6. A Participant will be entitled
to retain

 

 

any Shares received only to the extent he or she is Vested in such
Shares and only upon meeting any other conditions described in Article 6.

 

ARTICLE 5.                                GRANT OF AWARDS.

 

5.1                                 Eligibility. The Committee shall approve the
Employees who are to receive Awards under the Plan, the Target Incentive, the
Target Performance, the Performance Period, and all other matters relating to
such Awards. All such terms shall be established no later than ninety (90) days
following the commencement of the applicable Performance Period. Notwithstanding
the foregoing, the Committee may adjust Target Performance for a
Performance Period at any time during a Performance Period if the Committee
determines, in its sole discretion, that the business operations, corporate or
capital structure of NetBank have materially changed during the Performance
Period or that Target Performance is materially affected by an acquisition,
disposition or similar corporate event that is consummated during the
Performance Period.

 

5.2                                 Agreement. Each Award shall be evidenced by an Agreement
between the Participant and NetBank. The Award shall be subject to all
applicable terms of the Plan and the Stock Incentive Plan and may be
subject to any other terms set forth in the Agreement that are consistent with
the Plan and the Stock Incentive Plan. An Award is in addition to any other
compensation paid to the Participant by NetBank. In no event will an Award be
granted in consideration of a reduction in the Participant’s salary or other
compensation from NetBank.

 

ARTICLE 6.                                PERFORMANCE MODIFIER.

 

6.1                                 Performance Requirements. The amount of a Target Incentive
payable to a Participant under an Award shall be determined according to the
following schedule:

 

	
   

  	
   

  	
   

  	
   

  	
  Value of Payment as a
  Percentage of the Target

  Incentive

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  0%

  	
   

  	
  50%

  	
   

  	
  100%

  	
   

  	
  150%

  	
   

  
	
  Segment

  	
   

  	
  Weight

  	
   

  	
  Actual performance over the
  Performance Period

  as a percentage of Target Performance

  	
   

  
	
  Bank

  	
   

  	
  25

  	
  %

  	
  Less than 50

  	
  %

  	
  50

  	
  %

  	
  100

  	
  %

  	
  150

  	
  %

  
	
  Transaction
  Processing

  	
   

  	
  25

  	
  %

  	
  Less than 50

  	
  %

  	
  50

  	
  %

  	
  100

  	
  %

  	
  150

  	
  %

  
	
  Financial
  Intermediary

  	
   

  	
  25

  	
  %

  	
  Less than 20

  	
  %

  	
  20

  	
  %

  	
  100

  	
  %

  	
  180

  	
  %

  
	
  NetBank, Inc.

  	
   

  	
  25

  	
  %

  	
  Less than 20

  	
  %

  	
  20

  	
  %

  	
  100

  	
  %

  	
  180

  	
  %

  

 

If actual performance falls between any of the
percentages of Target Performance (i.e., either
between 50% and 150% or 20% and 180%), the percentage of the Target Incentive
to be received by the Participant shall be determined by applying a
straight-line interpolation between the next lowest and next highest points
provided above.

 

6.2                                 Additional Requirements. Except as otherwise provided in
Sections 6.3 and 6.4 and Article 8, a Participant shall be entitled to
payment of Shares under an Award only if he or she is an Employee of NetBank on
the last date of the Performance Period. Although the Participant may receive
payment of Shares under an Award at the end of the Performance Period, the
Participant is not Vested in any Shares paid under an Award until meeting any
further conditions set forth in the Agreement, including service conditions
that may extend beyond the Settlement Date.

 

6.3                                 Events Causing Early Settlement. A Participant’s Award shall become
payable prior to the last day of the applicable Performance Period based on
actual performance to the event date relative to Target Performance and only to
the extent shown in Section 6.5, upon the occurrence of any of the
following events:

 

 

a. Retirement. Voluntary termination of employment by an
Employee on or after attaining age 55 and completing at least ten (10) years
of continuous service with NetBank.

 

b. Death. The Participant dies while an Employee.

 

c. Total Disability. The Committee determines, based on medical
evidence, that the Participant has been substantially unable to perform his
or her duties as an Employee for a period of at least 12 consecutive months as
the result of the Employee’s incapacity due to physical or mental illness.

 

d. Termination Without Cause. NetBank unilaterally terminates
the Participant’s service as an Employee without Cause.

 

6.4                                 Events Causing Early Settlement Only In
Connection With A Change In Control. A Participant’s Award shall become payable prior to
the last day of the applicable Performance Period based on actual performance
to the event date relative to Target Performance and only to the extent shown
in Section 6.5 in the event of a Qualifying Termination that occurs within
the Change In Control Window Period.

 

6.5                                 Pro Rata Payment Only. The payment of any Award that is
settled prior to the last day of the applicable Performance Period pursuant to
an event described in Section 6.3 or 6.4 above will be the payment
otherwise determined in accordance with the foregoing provisions of Section 6.1
and Section 6.3 or 6.4, as applicable, multiplied by a fraction the
numerator of which is the number of days from the Date of Award to the date of
the applicable event and the denominator of which is the total numbers of days
in the Performance Period.

 

6.6                                 Timing
of Payment. The payment in Shares of any amount due under an Award shall be
made as soon as practicable after the applicable Settlement Date but in no
event later than March 15th of the calendar year following the
calendar year which contains the Settlement Date.

 

ARTICLE 7.                                SHARES NONTRANSFERABLE.

 

Unvested Awards and Shares
under this Plan shall not be subject to any claim of a creditor of a
Participant and shall be free from attachment, garnishment or any other legal
or equitable process available to any creditor of a Participant. No Participant
shall have the right to assign, alienate, anticipate, hypothecate, pledge,
encumber or transfer any unvested Award or Shares that the Participant receives
or may expect to receive under the Plan. This provision does not preclude
the Participant from designating a Beneficiary to receive any payment with
respect to Awards or Vested Shares that remain unpaid at the time of the
Participant’s death. Any such designation of a Beneficiary shall be made on the
form prescribed for that purpose by NetBank.

 

ARTICLE 8.                                AMENDMENT OR TERMINATION.

 

The Committee may, at any time and for any reason,
amend or terminate the Plan. No Awards shall be granted under the Plan after
termination, but termination or amendment shall not affect any Award made under
the Plan prior to termination or amendment, except that, in the event of a
corporate transaction in which NetBank is not the surviving entity, the
Committee may provide for the early settlement of Awards then outstanding
as of the effective date of such transaction with the amount of any payment due
to Participants as of the Settlement Date determined in accordance with Section 6.1
and 6.5 to the extent not inconsistent with this Article 8.

 

ARTICLE 9.                                WITHHOLDING TAX.

 

In the event NetBank determines that it is required to
withhold state or federal income or employment taxes as a result of Awards
granted or payments under the Plan, then, as a condition to the Awards or
payments, the Participant will make arrangements satisfactory to NetBank to
enable it to satisfy the withholding requirements, including, but not limited
to, the withholding by NetBank of a portion of such Shares necessary to satisfy
the minimum statutory required withholding.

 

 

ARTICLE 10.                          LEGALITY OF ISSUANCE.

 

NetBank shall not be under any obligation to make
payment for any Share unless and until NetBank has determined that all
applicable provisions of state and federal income tax and securities laws have
been satisfied, including any provision requiring NetBank to register or
qualify the sale of Shares under state or federal securities laws or any other
applicable law.

 

ARTICLE 11.                          NO EMPLOYMENT RIGHTS.

 

Nothing in this Plan shall be construed as giving a
Participant the right to be retained as an Employee or as impairing the rights
of NetBank to terminate his or her employment at any time and for any reason.

 

ARTICLE 12.                          APPLICABLE LAW.

 

The provisions of this Plan shall be governed by
federal law, and, to the extent not in conflict with federal law, the laws of
the state of Georgia. The Plan is intended to constitute a bonus program,
within the meaning of 29 CFR § 2510.3-2(c), such that it is exempt from
coverage by the Employee Retirement Income Security Act of 1974, as amended.

 

ARTICLE 13.                          EFFECTIVE DATE OF EXECUTION.

 

To record NetBank’s acceptance of the Committee’s
adoption of the Plan, NetBank has caused a duly authorized officer to sign the
Plan on its behalf.

 

	
   

  	
  NetBank, Inc.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
  Chief Human
  Resources Executive

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