Document:

Exhibit 10.11

 

ASSOCIATED CAPITAL GROUP, INC.

2015 STOCK AWARD AND INCENTIVE PLAN

 

1.                                      PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

 

The purpose of the 2015 Stock Award and Incentive Plan of Associated Capital Group, Inc. (the “Plan”) is to afford an incentive to selected employees, directors and independent contractors of Associated Capital Group, Inc. (the “Company”), or any Subsidiary or Affiliate which now exists or hereafter is organized or acquired, to acquire a proprietary interest in the Company, to continue as employees or independent contractors, as the case may be, to increase their efforts on behalf of the Company and to promote the success of the Company’s business. Pursuant to Section 6 of the Plan, there may be granted stock options (including “incentive stock options” and “nonqualified stock options”), stock appreciation rights (either in connection with stock options granted under the Plan or independently of options), restricted stock, restricted stock units, dividend equivalents and other stock- or cash-based awards. Awards made under the Plan are intended to satisfy the requirements of Rule 16b-3 promulgated under Section 16 of the Exchange Act and the Plan shall be interpreted in a manner consistent therewith.

 

2.                                      DEFINITIONS.

 

For purposes of the Plan, the following terms shall be defined as set forth below:

 

(a)                            “Affiliate” means any entity if, at the time of granting of an Award, (i) the Company, directly or indirectly, owns at least 20% of the combined voting power of all classes of stock of such entity or at least 20% of the ownership interests in such entity or (ii) such entity, directly or indirectly, owns at least 20% of the combined voting power of all classes of stock of the Company.

 

(b)                            “Award” means any Option, SAR, Restricted Stock, Restricted Stock Unit, Dividend Equivalent or Other Stock-Based Award or Other Cash-Based Award granted under the Plan.

 

(c)                             “Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award.

 

(d)                            “Beneficiary” means the person, persons, trust or trusts which have been designated by a Grantee in his or her most recent written beneficiary designation filed with the Company to receive the benefits specified under the Plan upon his or her death, or, if there is no designated Beneficiary or surviving designated Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

 

(e)                             “Board” means the Board of Directors of the Company.

 

(f)                              A “Change in Control” shall be deemed to have occurred in the event that the Board of Directors of the Company in its sole and absolute discretion determines that a change in control has occurred for the purposes of the Plan.

 

(g)                             “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

(h)                            “Committee” means the committee established by the Board to administer the Plan, the composition of which shall at all times satisfy the provisions of Rule 16b-3.

 

(i)                                “Company” means Associated Capital Group, Inc., a corporation organized under the laws of the State of Delaware, or any successor corporation.

 

 

(j)                               “Dividend Equivalent” means a right, granted to a Grantee under Section 6(g), to receive cash, Stock, or other property equal in value to dividends paid with respect to a specified number of shares of Stock. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award, and may be paid currently or on a deferred basis.

 

(k)                            “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and as now or hereafter construed, interpreted and applied by regulations, rulings and cases.

 

(l)                                “Fair Market Value” means, with respect to Stock or other property, the fair market value of such Stock or other property determined by such methods or procedures as shall be established from time to time by the Committee. Unless otherwise determined by the Committee in good faith, the per share Fair Market Value of Stock as of a particular date shall mean:

 

(i)                 the closing sales price per share of Stock on the national securities exchange on which the Stock is principally traded, for the last preceding date on which there was a sale of such Stock on such exchange, or

 

(ii)              if the shares of Stock are then traded in an over-the-counter market, the average of the closing bid and asked prices for the shares of Stock in such over-the-counter market for the last preceding date on which there was a sale of such Stock in such market, or

 

(iii)           if the shares of Stock are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall determine.

 

(m)                        “Grantee” means a person who, as an employee or independent contractor of the Company, a Subsidiary or an Affiliate, has been granted an Award under the Plan.

 

(n)                            “ISO” means any Option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code.

 

(o)                            “NQSO” means any Option that is designated as a nonqualified stock option.

 

(p)                            “Option” means a right, granted to a Grantee under Section 6(b), to purchase shares of Stock. An Option may be either an ISO or an NQSO, provided that ISO’s may not be granted to independent contractors.

 

(q)                            “Other Cash-Based Award” means cash awarded under Section 6(h), including cash awarded as a bonus or upon the attainment of specified performance criteria or otherwise as permitted under the Plan.

 

(r)                               “Other Stock-Based Award” means a right or other interest granted to a Grantee under Section 6(h) that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, including, but not limited to (1) unrestricted Stock awarded as a bonus or upon the attainment of specified performance criteria or otherwise as permitted under the Plan, and (2) a right granted to a Grantee to acquire Stock from the Company for cash and/or a promissory note containing terms and conditions prescribed by the Committee.

 

(s)                              “Plan” means this Associated Capital Group, Inc. 2015 Stock Award and Incentive Plan, as amended from time to time.

 

(t)                               “Restricted Stock” means an Award of shares of Stock to a Grantee under Section 6(d) that may be subject to certain restrictions and to a risk of forfeiture.

 

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(u)                            “Restricted Stock Unit” means a right granted to a Grantee under Section 6(e) to receive Stock or cash at the end of a specified deferral period, which right may be conditioned on the satisfaction of specified performance or other criteria.

 

(v)                            “Rule 16b-3” means Rule 16b-3, as from time to time in effect promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act, including any successor to such Rule.

 

(w)                          “Stock” means shares of the Class A common stock, par value $.001 per share, of the Company.

 

(x)                            “SAR” or “Stock Appreciation Right” means the right, granted to a Grantee under Section 6(c), to be paid an amount measured by the appreciation in the Fair Market Value of Stock from the date of grant to the date of exercise of the right, with payment to be made in cash, Stock, or property as specified in the Award or determined by the Committee.

 

(y)                            “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if, at the time of granting of an Award, each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

 

3.                                      ADMINISTRATION.

 

The Plan shall be administered by the Committee.  The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards to be granted, the number of shares of Stock to which an Award may relate and the terms, conditions, restrictions and performance criteria relating to any Award; and to determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, forfeited, exchanged, or surrendered; to make adjustments in the terms and conditions of, and the criteria and performance objectives (if any) included in, Awards in recognition of unusual or non-recurring events affecting the Company or any Subsidiary or Affiliate or the financial statements of the Company or any Subsidiary or Affiliate, or in response to changes in applicable laws, regulations, or accounting principles; to designate Affiliates; to construe and interpret the Plan and any Award; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the Award Agreements (which need not be identical for each Grantee); and to make all other determinations deemed necessary or advisable for the administration of the Plan.

 

The Committee may appoint a chairperson and a secretary and may make such rules and regulations for the conduct of its business as it shall deem advisable, and shall keep minutes of its meetings. All determinations of the Committee shall be made by a majority of its members either present in person or participating by conference telephone at a meeting or by written consent. The Committee may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan.

 

All decisions, determinations and interpretations of the Committee shall be final and binding on all persons, including the Company, and any Subsidiary, Affiliate or Grantee (or any person claiming any rights under the Plan from or through any Grantee) and any stockholder.

 

No member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted made hereunder.

 

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4.                                      ELIGIBILITY.

 

Awards may be granted to selected employees, independent contractors and directors of the Company and its present or future Subsidiaries and Affiliates, in the discretion of the Committee. In determining the persons to whom Awards shall be granted and the type of any Award (including the number of shares to be covered by such Award), the Committee shall take into account such factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan. In no event will an employee, independent contractor or director be granted an Award where the number of shares to be covered by such Award together with all other shares covered by any other Awards to such individual in the same calendar year exceeds 500,000 shares.

 

5.                                      STOCK SUBJECT TO THE PLAN.

 

The number of shares of Stock reserved for the grant of Awards under the Plan shall be 2,000,000, subject to adjustment as provided in the next paragraph.  Such shares may, in whole or in part, be authorized but unissued shares or shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise. If any shares subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award otherwise terminates or expires without a distribution of shares to the Grantee, the shares of stock with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for Awards under the Plan (but in the case of ISOs, only to the extent consistent with the tax rules applicable thereto). Upon the exercise of any Award granted in tandem with any other Awards or awards, such related Awards or awards shall be cancelled to the extent of the number of shares of Stock as to which the Award is exercised and, notwithstanding the foregoing, such number of shares shall no longer be available for Awards under the Plan.

 

In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Stock, or other property), recapitalization, Stock split, reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Stock so that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Grantees under the Plan, then the Committee shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares of Stock which may thereafter be issued in connection with Awards, (ii) the number and kind of shares of Stock or other property issued or issuable in respect of outstanding Awards, and (iii) the exercise price, grant price, or purchase price relating to any Award; provided that, with respect to ISOs, such adjustment shall be made in accordance with Section 424(h) of the Code.

 

6.                                      SPECIFIC TERMS OF AWARDS.

 

(a)         General.  The term of each Award shall be for such period as may be determined by the Committee. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or a Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may be made in such forms as the Committee shall determine at the date of grant or thereafter, including, without limitation, cash, Stock, or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The Committee may make rules relating to installment or deferred payments with respect to Awards, including the rate of interest to be credited with respect to such payments. In addition to the foregoing, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter, such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine.

 

(b)         Options.  The Committee is authorized to grant Options to Grantees on the following terms and conditions:

 

(i)             Type of Award.  The Award Agreement evidencing the grant of an Option under the Plan shall designate the Option as an ISO or an NQSO.

 

(ii)          Exercise Price.  The exercise price per share of Stock purchasable under an Option shall be determined by the Committee; provided that, in the case of an ISO, such exercise price shall

 

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be not less than the Fair Market Value of a share on the date of grant of such Option, and in no event shall the exercise price for the purchase of shares be less than par value. The exercise price for Stock subject to an Option may be paid (I) in cash, or (II) at the discretion of the Committee, by an exchange of Stock previously owned by the Grantee, by the withholding of Stock otherwise issuable upon exercise or (III) a combination of thereof, in an amount having a combined value equal to such exercise price. A Grantee may also elect to pay all or a portion of the aggregate exercise price by having shares of Stock with a Fair Market Value on the date of exercise equal to the aggregate exercise price sold by a broker-dealer under circumstances meeting the requirements of 12 C.F.R. 220 or any successor thereof.

 

(iii)       Term and Exercisability of Options.  The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted. Options shall be exercisable over the exercise period (which shall not exceed ten years from the date of grant), at such times and upon such conditions as the Committee may determine, as reflected in the Award Agreement; provided that the Committee shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate (subject to the provisions of Section 7 hereof). An Option may be exercised to the extent of any or all full shares of Stock as to which the Option has become exercisable, by giving written notice of such exercise to the Committee or its designated agent.

 

(iv)      Termination of Employment, Etc.  Unless otherwise determined by the Committee, an Option may not be exercised unless the Grantee is then in the employ of, or then maintains an independent contractor relationship with, the Company or a Subsidiary or an Affiliate (or a company or a parent or subsidiary company of such company issuing or assuming the Option in a transaction to which Section 424(a) of the Code applies), and unless the Grantee has remained continuously so employed, or continuously maintained such relationship, since the date of grant of the Option; provided that the Award Agreement may contain provisions extending the exercisability of Options, in the event of specified terminations, to a date not later than the expiration date of such Option.

 

(v)         Other Provisions.  Options may be subject to such other conditions including, but not limited to, restrictions on transferability of the shares acquired upon exercise of such Options, as the Committee may prescribe in its discretion.

 

(c)          SARs.  The Committee is authorized to grant SARs to Grantees on the following terms and conditions:

 

(i)             In General.  Unless the Committee determines otherwise, an SAR (1) granted in tandem with an NQSO may be granted at the time of grant of the related NQSO or at any time thereafter or (2) granted in tandem with an ISO may only be granted at the time of grant of the related ISO. An SAR granted in tandem with an Option shall be exercisable only to the extent the underlying Option is exercisable.

 

(ii)          SARs.  An SAR shall confer on the Grantee a right to receive with respect to each share subject thereto, upon exercise thereof, the excess of —

 

(1)         the Fair Market Value of one share of Stock on the date of exercise ;

 

(2)         over (2) the grant price of the SAR (which in the case of an SAR granted in tandem with an Option shall be equal to the exercise price of the underlying Option, and which in the case of any other SAR shall be such price as the Committee may determine).

 

(d)         Restricted Stock.  The Committee is authorized to grant Restricted Stock to Grantees on the following terms and conditions:

 

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(i)             Issuance and Restrictions.  Restricted Stock shall be subject to such restrictions on transferability and other restrictions, if any, as the Committee may impose at the date of grant or thereafter, which restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, or otherwise, as the Committee may determine (subject to the provisions of Section 7 hereof). Except to the extent restricted under the Award Agreement relating to the Restricted Stock, a Grantee granted Restricted Stock shall have all of the rights of a stockholder including, without limitation, the right to vote Restricted Stock and the right to receive dividends thereon.

 

(ii)          Forfeiture.  Upon termination of employment or termination of the independent contractor relationship during the applicable restriction period, Restricted Stock and any accrued but unpaid dividends or Dividend Equivalents that are at that time subject to restrictions shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock.

 

(iii)       Certificates for Stock.  Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Grantee, such certificates shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company shall retain physical possession of the certificate.

 

(iv)      Dividends.  Dividends paid on Restricted Stock shall be either paid at the dividend payment date, or deferred for payment to such date as determined by the Committee, in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends. Stock distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.

 

(e)          Restricted Stock Units.  The Committee is authorized to grant Restricted Stock Units to Grantees, subject to the following terms and conditions:

 

(i)             Award and Restrictions.  Delivery of Stock or cash, as determined by the Committee, will occur upon expiration of the deferral period specified for Restricted Stock Units by the Committee. In addition, Restricted Stock Units shall be subject to such restrictions as the Committee may impose, at the date of grant or thereafter, which restrictions may lapse at the expiration of the deferral period or at earlier or later specified times, separately or in combination, in installments or otherwise, as the Committee may determine.

 

(ii)          Forfeiture.  Upon termination of employment or termination of the independent contractor relationship during the applicable deferral period or portion thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions precedent to the delivery of Stock or cash to which such Restricted Stock Units relate, all Restricted Stock Units that are then subject to deferral or restriction shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock Units will be waived in whole or in part in the event of termination resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock Units.

 

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(f)           Stock Awards in Lieu of Cash Awards.  The Committee is authorized to grant Stock as a bonus, or to grant other Awards, in lieu of Company commitments to pay cash under other plans or compensatory arrangements. Stock or Awards granted hereunder shall have such other terms as shall be determined by the Committee.

 

(g)          Dividend Equivalents.  The Committee is authorized to grant Dividend Equivalents to Grantees. The Committee may provide, at the date of grant or thereafter, that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Stock, or other investment vehicles as the Committee may specify, provided that Dividend Equivalents (other than freestanding Dividend Equivalents) shall be subject to all conditions and restrictions of the underlying Awards to which they relate.

 

(h)         Other Stock- or Cash-Based Awards.  The Committee is authorized to grant to Grantees Other Stock-Based Awards or Other Cash-Based Awards as an element of or supplement to any other Award under the Plan, as deemed by the Committee to be consistent with the purposes of the Plan. Such Awards may be granted with value and payment contingent upon performance of the Company or any other factors designated by the Committee, or valued by reference to the performance of specified Subsidiaries or Affiliates. The Committee shall determine the terms and conditions of such Awards at the date of grant or thereafter.

 

7.                                      CHANGE IN CONTROL.

 

In the event of a Change in Control, all outstanding Options and SARs not then exercisable shall become fully exercisable, and all outstanding Restricted Stock, Restricted Stock Unit, Dividend Equivalent or Other Stock-Based Award or Other Cash-Based Award Awards not then fully vested shall become fully vested.

 

8.                                      GENERAL PROVISIONS.

 

(a)         Compliance with Local and Exchange Requirements.  The Plan, the granting and exercising of Awards thereunder, and the other obligations of the Company under the Plan and any Award Agreement or other agreement shall be subject to all applicable federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required. The Company, in its discretion, may postpone the issuance or delivery of Stock under any Award until completion of such stock exchange listing or registration or qualification of such Stock or other required action under any state, federal or foreign law, rule or regulation as the Company may consider appropriate, and may require any Grantee to make representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules and regulations.

 

(b)         Nontransferability.  Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, Awards shall not be transferable by a Grantee except by will or the laws of descent and distribution or, if then permitted under Rule 16b-3, pursuant to a qualified domestic relations order as defined under the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder, and shall be exercisable during the lifetime of a Grantee only by such Grantee or his guardian or legal representative.

 

(c)          No Right to Continued Employment, etc.  Nothing in the Plan or in any Award granted or any Award Agreement or other agreement entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ of or to continue as an independent contractor of the Company, any subsidiary or any Affiliate or to be entitled to any remuneration or benefits not set forth in the Plan or such Award Agreement or other agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary or Affiliate to terminate such Grantee’s employment or independent contractor relationship.

 

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(d)         Taxes.  The Company or any Subsidiary or Affiliate is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Stock, or any other payment to a Grantee, amounts of withholding and other taxes due in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Grantees to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Grantee’s tax obligations.

 

(e)          Amendment and Termination of the Plan.  The Board may at any time and from time to time alter, amend, suspend, or terminate the Plan in whole or in part; provided that no amendment which requires stockholder approval in order for the Plan to continue to comply with applicable law or stock exchange requirements, to reprice stock options or stock appreciation rights, or to avoid the application of Section 162(m) of the Code shall be effective unless the same shall be approved by the requisite vote of the stockholders of the Company entitled to vote thereon. Notwithstanding the foregoing, no amendment shall affect adversely any of the rights of any Grantee, without such Grantee’s consent, under any Award theretofore granted under the Plan.

 

(f)           No Rights to Awards; No Stockholder Rights.  No Grantee shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Grantees. Except as provided specifically herein, a Grantee or a transferee of an Award shall have no rights as a stockholder with respect to any shares covered by the Award until the date of the issuance of a stock certificate to him for such shares.

 

(g)          Unfunded Status of Awards.  The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Grantee pursuant to an Award, nothing contained in the Plan or any Award shall give any such Grantee any rights that are greater than those of a general creditor of the Company.

 

(h)         No Fractional Shares.  No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

 

(i)             Governing Law.  The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware without giving effect to the conflict of laws principles thereof.

 

(j)            Effective Date.  The Plan shall take effect upon its approval by the Board, but the Plan (and any grants of Awards made prior to shareholder approval mentioned herein) shall be subject to the approval of the holders of shares of common stock of the Company representing a majority of the votes present or represented at a meeting of the Company’s shareholders, which approval must occur within twelve months of the date the Plan is adopted by the Board. In the absence of such approval, such Awards shall be null and void.

 

(k)         Claims Limitations Period.  Any Grantee who believes he or she is being denied any benefit or right under this Plan or under any Award may file a written claim with the Committee.  Any claim must be delivered to the Committee within forty-five (45) days of the specific event giving rise to the claim.  Untimely claims will not be processed and shall be deemed denied.  The Committee, or its designee, will notify the Grantee of its decision in writing as soon as administratively practicable.  Claims not responded to by the Committee in writing within one hundred and twenty (120) days of the date the written claim is delivered to the Committee shall be deemed denied.  The Committee’s decision is final, binding and conclusive on all persons.  No lawsuit relating to this Plan may be filed before a written claim is filed with the Committee and is denied or deemed denied, and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred.

 

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(l)             No Liability; Indemnification.  None of the Board, any Committee member or any person acting at the direction of the Board or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with respect to this Plan or any Award.  The Company shall pay or reimburse any member of the Committee, as well as any director, employee, or consultant who in good faith takes action on behalf of this Plan, for all expenses incurred with respect to this Plan, and to the full extent allowable under applicable law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorney’s fees) arising out of their good faith performance of duties on behalf of this Plan.  The Company and its Affiliates may, but shall not be required to, obtain liability insurance for this purpose.

 

9Exhibit 10.1

FIRST AMENDMENT TO THE

SECOND AMENDED AND RESTATED 

AGREEMENT OF LIMITED PARTNERSHIP OF

BLUEROCK RESIDENTIAL HOLDINGS, L.P.

 

DESIGNATION OF 8.25% SERIES A 

CUMULATIVE REDEEMABLE PREFERRED UNITS

 

October 21, 2015

 

Pursuant to Section 4.02 and Article XI
of the Second Amended and Restated Agreement of Limited Partnership of Bluerock Residential Holdings, L.P. (the “Partnership
Agreement”), the General Partner hereby amends the Partnership Agreement as follows in connection with the issuance of 2,875,000
shares of 8.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “Series A Preferred Stock”)
of Bluerock Residential Growth REIT, Inc. and the issuance to the General Partner of Series A Preferred Units (as defined below)
in exchange for the contribution by the General Partner of the net proceeds from the issuance and sale of the Series A Preferred
Stock:

 

1.          Designation
and Number. A series of Preferred Units (as defined below), designated the “8.25% Series A Cumulative Redeemable Preferred
Units” (the “Series A Preferred Units”), is hereby established. The number of authorized Series A Preferred Units
shall be 2,875,000.

 

2.          Defined
Terms. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Partnership
Agreement. The following defined terms used in this Amendment to the Partnership Agreement shall have the meanings specified below:

 

“Articles Supplementary” means
the Articles Supplementary of the General Partner filed with the State Department of Assessments and Taxation of the State of Maryland
on October 20, 2015, designating the terms, rights and preferences of the Series A Preferred Stock.

 

“Base Liquidation Preference”
shall have the meaning provided in Section 6.

 

“Business Day” shall have the
meaning provided in Section 5(a).

 

“Common Stock” means shares
of the General Partner’s Class A common stock, par value $0.01 per share.

 

“Common Unit Economic Balance”
shall have the meaning provided in Section 10(g).

 

“Default Period” shall have
the meaning provided in Section 5(e).

 

“Default Rate” shall have the
meaning provided in Section 5(e).

 

“Distribution Period” hall have
the meaning provided in Section 5(a).

 

“Distribution Record Date” shall
have the meaning provided in Section 5(a).

 

     

     

    

  

“Economic Capital Account Balance”
shall have the meaning provided in Section 10(g).

 

“Initial Series A Preferred Return”
shall have the meaning provided in Section 5(a).

 

“Junior Units” shall have the
meaning provided in Section 4.

 

“Liquidating Gains” shall have
the meaning provided in Section 10(g).

 

“Loss” shall have the meaning
provided in Section 10(h).

 

“Net Operating Income” shall
have the meaning provided in Section 10(f).

 

“Parity Preferred Units” shall
have the meaning provided in Section 4.

 

“Partnership Agreement” shall
have the meaning provided in the recital above.

 

“Preferred Units” means all
Partnership Interests designated as preferred units by the General Partner from time to time in accordance with Section 4.02 of
the Partnership Agreement.

 

“Profit” shall have the meaning
provided in Section 10(h).

 

“Series A Preferred Return”
shall have the meaning provided in Section 5(a).

 

“Series A Preferred Distribution Payment
Date” shall have the meaning provided in Section 5(a).

 

“Series A Preferred Stock” shall
have the meaning provided in the recital above.

 

“Series A Preferred Units” shall
have the meaning provided in Section 1.

 

3.          Maturity.
The Series A Preferred Units have no stated maturity and will not be subject to any sinking fund or mandatory redemption.

 

4.          Rank.
The Series A Preferred Units will, with respect to distribution rights and rights upon liquidation, dissolution or winding up of
the Partnership, rank (a) senior to all classes or series of Common Units of the Partnership and any class or series of Preferred
Units expressly designated as ranking junior to the Series A Preferred Units as to distribution rights and rights upon liquidation,
dissolution or winding up of the Partnership (together with the Common Units, the “Junior Units”); (b) on a parity
with any class or series of Preferred Units issued by the Partnership expressly designated as ranking on a parity with the Series
A Preferred Units as to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership (the “Parity
Preferred Units”); and (c) junior to any class or series of Preferred Units issued by the Partnership expressly designated
as ranking senior to the Series A Preferred Units with respect to distribution rights and rights upon liquidation, dissolution
or winding up of the Partnership. The term “Preferred Units” does not include convertible or exchangeable debt securities
of the Partnership, which will rank senior to the Series A Preferred Units prior to conversion or exchange. The Series A Preferred
Units will also rank junior in right or payment to the Partnership’s existing and future indebtedness.

 

    	 	2	 

     

    

  

5.          Distributions.

 

(a)          Subject
to the preferential rights of holders of any class or series of Preferred Units of the Partnership expressly designated as ranking
senior to the Series A Preferred Units as to distributions, the holders of Series A Preferred Units shall be entitled to receive,
when, as and if authorized by the General Partner and declared by the Partnership, out of funds of the Partnership legally available
for payment of distributions, cumulative cash distributions at the rate of 8.25% per annum of the Base Liquidation Preference (as
defined below) per unit (equivalent to a fixed annual amount of $2.0625 per unit) (the “Initial Series A Preferred Return”)
from the date of original issue of the Series A Preferred Units (or the date of issue of any Series A Preferred Units issued after
October 21, 2015) to, but not including October 21, 2022. Commencing October 21, 2022, the Partnership shall pay cumulative cash
distributions on the Series A Preferred Units at an annual rate equal to the Initial Series A Preferred Return increased by two
percent of the Base Liquidation Preference per Series A Preferred Unit, which shall increase by an additional two percent of the
Base Liquidation Preference per Series A Preferred Unit on each subsequent anniversary thereafter, subject to a maximum annual
distribution rate of 14% (together with the Initial Series A Preferred Return, the “Series A Preferred Return”). Distributions
on the Series A Preferred Units shall accrue and be cumulative from (and including) the date of original issue of any Series A
Preferred Units or the end of the most recent Distribution Period for which distributions have been paid, and shall be payable
quarterly, in equal amounts, in arrears, on or about the 5th day of each January, April, July and October of each year
(or, if not a business day, the next succeeding business day (each a “Series A Preferred Distribution Payment Date”)
for the period ending on such Series A Preferred Distribution Payment Date, commencing on January 5, 2016. A “Distribution
Period” is the respective period commencing on and including January 1, April 1, July 1 and October 1 of each year and ending
on and including the day preceding the first day of the next succeeding Distribution Period (other than the initial Distribution
Period and the Distribution Period during which any Series A Preferred Units shall be redeemed or otherwise acquired by the Partnership).
The term “Business Day” shall mean each day, other than a Saturday or Sunday, which is not a day on which banks in
the State of New York are required to close. The amount of any distribution payable on the Series A Preferred Units for any Distribution
Period will be computed on the basis of twelve 30-day months and a 360-day year. Distributions will be payable to holders of record
of the Series A Preferred Units as they appear on the records of the Partnership at the close of business on the 25th
day of the month preceding the applicable Series A Preferred Distribution Payment Date, i.e., December 25, March 25, June
25 and September 25 (each, a “Distribution Record Date”).

 

(b)          No
distributions on the Series A Preferred Units shall be authorized by the General Partner or declared, paid or set apart for payment
by the Partnership at such time as the terms and provisions of any agreement of the General Partner or the Partnership, including
any agreement relating to the indebtedness of either of them, prohibits such authorization, declaration, payment or setting apart
for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default
thereunder, or if such declaration or payment shall be restricted or prohibited by law.

 

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(c)          Notwithstanding
anything to the contrary contained herein, distributions on the Series A Preferred Units will accrue whether or not the restrictions
referred to in Section 5(b) exist, whether or not the Partnership has earnings, whether or not there are funds legally available
for the payment of such distributions and whether or not such distributions are authorized or declared. No interest, or sum of
money in lieu of interest, will be payable in respect of any distribution on the Series A Preferred Units which may be in arrears.
When distributions are not paid in full upon the Series A Preferred Units and any Parity Preferred Units (or a sum sufficient for
such full payment is not so set apart), all distributions declared upon the Series A Preferred Units and any Parity Preferred Units
shall be declared pro rata so that the amount of distributions declared per Series A Preferred Unit and such Parity Preferred Units
shall in all cases bear to each other the same ratio that accumulated distributions per Series A Preferred Unit and such Parity
Preferred Units (which shall not include any accrual in respect of unpaid distributions for prior distributions periods if such
Parity Preferred Units do not have a cumulative distribution) bear to each other.

 

(d)          Except
as provided in the immediately preceding paragraph, unless full cumulative distributions on the Series A Preferred Units have been
or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof is set apart for payment
for all past Distribution Periods that have ended, no distributions (other than a distribution in Junior Units or in options, warrants
or rights to subscribe for or purchase any such Junior Units) shall be declared and paid or declared and set apart for payment
nor shall any other distribution be declared and made upon the Junior Units or the Parity Preferred Units, nor shall any Junior
Units or Parity Preferred Units be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or
made available for a sinking fund for the redemption of any such Units) by the Partnership (except (i) by conversion into or exchange
for Junior Units, (ii) the purchase of Series A Preferred Units, Junior Units or Parity Preferred Units in connection with a redemption
of stock pursuant to the Charter to the extent necessary to preserve the Corporation’s qualification as a REIT or (iii) the
purchase of Parity Preferred Units pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding
Series A Preferred Units). Holders of the Series A Preferred Units shall not be entitled to any distribution, whether payable in
cash, property or units, in excess of full cumulative distributions on the Series A Preferred Units as provided above. Any distribution
made on the Series A Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect
to such units which remains payable. Accrued but unpaid distributions on the Series A Preferred Units will accrue as of the Series
A Preferred Distribution Payment Date on which they first become payable.

 

(e)          Notwithstanding
anything to the contrary set forth above, the applicable distribution rate for each day during a Default Period (as defined below)
shall be equal to the then-current Series A Preferred Return plus two percent of the Base Liquidation Preference, or $0.50 per
annum (the “Default Rate”). Subject to the cure provision set forth in the next sentence, a “Default Period”
with respect to the Series A Preferred Units shall commence on a date the Partnership fails to make payment of distributions as
required in connection with a Series A Preferred Distribution Payment Date or date of redemption and shall end on the Business
Day on which, by 12:00 noon, New York City time, when an amount equal to all unpaid distributions and any unpaid redemption price
has been paid. No Default Period shall be deemed to commence if the amount of any distribution or any redemption price due (if
such default is not solely due to the Partnership’s willful failure) is paid not later than three Business Days after the
applicable Series A Preferred Distribution Payment Date or redemption date.

 

    	 	4	 

     

    

  

(f)          For
the avoidance of doubt, in determining whether a distribution (other than upon voluntary or involuntary liquidation) by distribution,
redemption or other acquisition of the Partnership Units is permitted under Delaware law, no effect shall be given to the amounts
that would be needed, if the Partnership were to be dissolved at the time of the distribution, to satisfy the preferential rights
upon distribution of holders of Partnership Units whose preferential rights are superior to those receiving the distribution.

 

6.          Liquidation
Preference. Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, the
holders of Series A Preferred Units are entitled to be paid out of the assets of the Partnership legally available for distribution
to its partners, after payment of or provision for the Partnership’s debts and other liabilities, a liquidation preference
of $25.00 per unit (the “Base Liquidation Preference”), plus an amount equal to any accrued and unpaid distributions
(whether or not authorized or declared) thereon to and including the date of payment, but without interest, before any distribution
of assets is made to holders of Junior Units. If the assets of the Partnership legally available for distribution to partners are
insufficient to pay in full the liquidation preference on the Series A Preferred Units and the liquidation preference on any Parity
Preferred Units, all assets distributed to the holders of the Series A Preferred Units and any Parity Preferred Units shall be
distributed pro rata so that the amount of assets distributed per Series A Preferred Units and such Parity Preferred Units shall
in all cases bear to each other the same ratio that the liquidation preference per Series A Preferred Unit and such Parity Preferred
Units bear to each other. Written notice of any distribution in connection with any such liquidation, dissolution or winding up
of the affairs of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable
in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60
days prior to the payment date stated therein, to each record holder of the Series A Preferred Units at the respective addresses
of such holders as the same shall appear on the records of the Partnership. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series A Preferred Units will have no right or claim to any of the remaining
assets of the Partnership. The consolidation or merger of the Partnership with or into another entity, a merger of another entity
with or into the Partnership, a statutory exchange by the Partnership or a sale, lease, transfer or conveyance of all or substantially
all of the Partnership’s property or business shall not be deemed to constitute a liquidation, dissolution or winding up
of the affairs of the Partnership.

 

7.          Redemption.
In connection with any redemption by the General Partner of any shares of Series A Preferred Stock pursuant to Sections 5, 6, 7,
8 or 9 of the Articles Supplementary, the Partnership shall redeem, on the date of such redemption, an equal number of Series A
Preferred Units held by the General Partner. As consideration for the redemption of such Series A Preferred Units, the Partnership
shall deliver to the General Partner (i) an amount of cash equal to the amount of cash, if any, paid by the General Partner to
the holder of such shares of Series A Preferred Stock in connection with the redemption thereof and (ii) a number of Common Units
equal to the number of shares of Common Stock, if any, issued by the General Partner to the holder of such shares of Series A Preferred
Stock in connection with the redemption thereof.

 

8.          Voting
Rights. Holders of the Series A Preferred Units will not have any voting rights.

 

    	 	5	 

     

    

  

9.          Conversion.
The Series A Preferred Units are not convertible or exchangeable for any other property or securities, except as provided herein.

 

10.         Allocation
of Profit and Loss.

 

Article V, Section 5.01 of the Partnership
Agreement is hereby deleted in its entirety and the following new Section 5.01 is inserted in its place:

 

 (a)         Profit. After giving effect
to the special allocations set forth in Section 5.01(c), (d), and (e) hereof, and subject to Section 5.01(f), Profit of the Partnership
for each fiscal year of the Partnership shall be allocated to the Partners in accordance with their respective Percentage Interests.

 

 (b)         Loss.
After giving effect to the special allocations set forth in Section 5.01(c), (d), and (e) hereof, and subject to Section 5.01(f),
Loss of the Partnership for each fiscal year of the Partnership shall be allocated to the Partners in accordance with their respective
Percentage Interests.

 

(c)         Minimum Gain Chargeback.
Notwithstanding any provision to the contrary, (i) any expense of the Partnership that is a “nonrecourse deduction”
within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in accordance with the Partners’ respective Percentage
Interests, (ii) any expense of the Partnership that is a “partner nonrecourse deduction” within the meaning of Regulations
Section 1.704-2(i)(2) shall be allocated to the Partner that bears the “economic risk of loss” of such deduction in
accordance with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum Gain within the meaning
of Regulations Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the exceptions set forth in Regulations
Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated among the Partners in accordance with Regulations
Section 1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership taxable year, then, subject
to the exceptions set forth in Regulations Section 1.704(2)(g), items of gain and income shall be allocated among the Partners
in accordance with Regulations Section 1.704-2(i)(4) and the ordering rules contained in Regulations Section 1.704-2(j). The manner
in which it is reasonably expected that the deductions attributable to nonrecourse liabilities will be allocated for purposes of
determining a Partner’s share of the nonrecourse liabilities of the Partnership within the meaning of Regulations Section
1.752-3(a)(3) shall be in accordance with a Partner’s Percentage Interest.

 

(d)          Qualified
Income Offset. If a Partner receives in any taxable year an adjustment, allocation or distribution described in subparagraphs
(4), (5) or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such Partner’s
Capital Account that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum
Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially
for such taxable year (and, if necessary, later taxable years) items of income and gain in an amount and manner sufficient to eliminate
such deficit Capital Account balance as quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d). After the
occurrence of an allocation of income or gain to a Partner in accordance with this Section 5.01(d), to the extent permitted by
Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Partner in an amount necessary to offset the
income or gain previously allocated to such Partner under this Section 5.01(d).

 

    	 	6	 

     

    

  

(e)          Capital
Account Deficits. Loss shall not be allocated to a Limited Partner to the extent that such allocation would cause a deficit
in such Partner’s Capital Account (after reduction to reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4),
(5) and (6)) to exceed the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum
Gain. Any Loss in excess of that limitation shall be allocated to the General Partner. After the occurrence of an allocation of
Loss to the General Partner in accordance with this Section 5.01(e), to the extent permitted by Regulations Section 1.704-1(b),
Profit shall be allocated to such Partner in an amount necessary to offset the Loss previously allocated to each Partner under
this Section 5.01(e).

 

(f)         Priority Allocations With Respect
To Preferred Units. After giving effect to the allocations set forth in Sections 5.01(c), (d), and (e) hereof, but before giving
effect to the allocations set forth in Sections 5.01(a) and 5.01(b), Net Operating Income shall be allocated to the General Partner
until the aggregate amount of Net Operating Income allocated to the General Partner under this Section 5.01(f) for the current
and all prior years equals the aggregate amount of the Series A Preferred Return paid to the General Partner for the current and
all prior years; provided, however, that the General Partner may, in its discretion, allocate Net Operating Income based
on accrued Series A Preferred Return with respect to the January Series A Preferred Distribution Payment Date if the General Partner
sets the Distribution Record Date for such Series A Preferred Distribution Payment Date on or prior to December 31 of the previous
year. For purposes of this Section 5.01(f), “Net Operating Income” means the excess, if any, of the Partnership’s
gross income over its expenses (but not taking into account depreciation, amortization, or any other noncash expenses of the Partnership),
calculated in accordance with the principles of Section 5.01(h) hereof.

 

(g)          Special
Allocations Regarding LTIP Units. Notwithstanding the provisions of Sections 5.01(a) and (b) hereof, Liquidating Gains shall
first be allocated to the LTIP Unitholders until their Economic Capital Account Balances, to the extent attributable to their ownership
of LTIP Units, are equal to (i) the Common Unit Economic Balance, multiplied by (ii) the number of their LTIP Units.
For this purpose, “Liquidating Gains” means net capital gains realized in connection with the actual or hypothetical
sale of all or substantially all of the assets of the Partnership, including but not limited to net capital gain realized in connection
with an adjustment to the value of Partnership assets under Section 704(b) of the Code. The “Economic Capital Account
Balance” of the LTIP Unit holders will be equal to their respective Capital Account balance to the extent attributable to
their ownership of LTIP Units. Similarly, the “Common Unit Economic Balance” shall mean (i) the Capital Account
balance of the General Partner, plus the amount of the General Partner’s share of any Partner Nonrecourse Debt Minimum Gain
or Partnership Minimum Gain, in either case to the extent attributable to the General Partner’s direct or indirect ownership
of Common Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation
is made under this Section 5.01(g), divided by (ii) the number of Common Units directly or indirectly owned by the General
Partner. Any such allocations shall be made among the LTIP Unitholders in proportion to the amounts required to be allocated to
each under this Section 5.01(g). The parties agree that the intent of this Section 5.01(g) is to make the Capital Account
balance associated with each LTIP Unit be economically equivalent to the Capital Account balance associated with Common Units directly
or indirectly owned by the General Partner (on a per-Unit basis).

 

    	 	7	 

     

    

  

(h)          Definition
of Profit and Loss. “Profit” and “Loss” and any items of income, gain, expense or loss
referred to in this Agreement shall be determined in accordance with federal income tax accounting principles, as modified by Regulations
Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not include items of income, gain and expense that are specially allocated
pursuant to Sections 5.01(c), 5.01(d), 5.01(e), or 5.01(f) hereof. All allocations of income, Profit, gain, Loss and expense (and
all items contained therein) for federal income tax purposes shall be identical to all allocations of such items set forth in this
Section 5.01, except as otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). With respect to
properties acquired by the Partnership, the General Partner shall have the authority to elect the method to be used by the Partnership
for allocating items of income, gain and expense as required by Section 704(c) of the Code with respect to such properties, and
such election shall be binding on all Partners.

 

(i)          Allocations
Between Transferor and Transferee. If a Partner transfers any part or all of its Partnership Interest, the distributive shares
of the various items of Profit and Loss allocable among the Partners during such fiscal year of the Partnership shall be allocated
between the transferor and the transferee Partner either (i) as if the Partnership’s fiscal year had ended on the date
of the transfer, or (ii) based on the number of days of such fiscal year that each was a Partner without regard to the results
of Partnership activities in the respective portions of such fiscal year in which the transferor and the transferee were Partners.
The General Partner, in its sole and absolute discretion, shall determine which method shall be used to allocate the distributive
shares of the various items of Profit and Loss between the transferor and the transferee Partner.

 

11.         Except
as modified herein, all terms and conditions of the Partnership Agreement shall remain in full force and effect, which terms and
conditions the General Partner hereby ratifies and confirms.

 

    	 	8	 

     

    

 

IN WITNESS WHEREOF,
the undersigned has executed this Amendment as of the date first set forth above.

 

	 	GENERAL PARTNER:
	 	 
	 	BLUEROCK RESIDENTIAL GROWTH REIT, INC.
	 	a Maryland corporation
	 	 
	 	By: 	/s/ R. Ramin Kamfar
	 	Name:	R. Ramin Kamfar
	 	Title:	Chief Executive Officer and President

 

[Signature page for Amendment re: Series
A Preferred Units - October 2015]

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