Document:

ex10-9.htm

    Exhibit 10.9

     

    DYNEX
CAPITAL, INC.

     

    PERFORMANCE
BONUS FOR

     

    RETURN
ON ADJUSTED EQUITY

     

    

     

    Thomas
Akin, Chief Executive Officer, Byron Boston, Chief Investment Officer, and
Stephen Benedetti, Chief Financial Officer and Chief Operating Officer,
(collectively, the “Participants”) will be eligible for an annual performance
bonus based on the annual return on adjusted equity of the Company (the “ROAE
Bonus”).  Management, at its option, may also elect to compensate
certain other members of senior management of the Company in accordance with the
terms of this ROAE Bonus.  The ROAE Bonus will be calculated on a
calendar year basis.

     

    Determination
of the Bonus Amount

     

    The ROAE
Bonus amount earned for a calendar year will be determined individually for each
of the Participants, and subject to an increase of up to 5% to the extent the
ROAE Participant elects to receive payment of the ROAE Bonus amount in common
stock of the Company (“Common Stock”), will be equal to the product of 100% at
the Participant’s actual base salary paid for the relevant calendar year times
the sum of (x) the product of 50% times the Reference Rate as calculated below
and (y) the product of 50% times the percentage determined by the Compensation
Committee of the Board of Directors earned by the Participant relative to
certain qualitative objectives set for the Participant by the Compensation
Committee.

     

    The
maximum ROAE Bonus amount earned for a calendar year will be 100% of the
Participant’s actual base salary paid for the relevant calendar year; provided
that if an ROAE Participant elects to receive payment of some or all of the ROAE
Bonus amount in Common Stock, the portion of the ROAE Bonus amount paid in
Common Stock will be increased by 5%.

     

    Determination
of Reference Rate

     

     

    The
Reference Rate for a calendar year will be determined based on the Company’s
Return on Average Equity (“ROAE”) for the calendar year.  ROAE will be
determined as the Company’s net income for the calendar year, determined in
accordance with generally accepted accounting principles, adjusted for any
non-recurring extraordinary items as determined by the Compensation Committee in
its sole discretion, divided by average common shareholder equity excluding
unrealized gains and losses, and adjusted for any equity capital that is raised
until such time the capital is deployed.

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    The ROAE
will then be annualized for purposes of determining the Reference Rate
below.

     

    
      	 
      	 
      	 
      	
              Reference
      Rate

            	 
      
	
              ROAE
      less than 6%

            	 
      	 
      	
              -
      %

            	 
      
	
              ROAE
      6% or greater and less than 8%

            	 
      	 
      	
              25%

            	 
      
	
              ROAE
      8% or greater and less than 10%

            	 
      	 
      	
              50%

            	 
      
	
              ROAE
      10% or greater and less than 12%

            	 
      	 
      	
              75%

            	 
      
	
              ROAE
      12% or greater

            	 
      	 
      	
              100%

            	 
      

    

    

     

    Determination
of Qualitative Objectives

     

    Each
Participant’s qualitative objectives for a calendar year will be set by the
Compensation Committee during the first ninety days of the year, and will
include achievement of certain qualitative corporate goals during the year as
well as individual goals; provided that qualitative objectives for calendar year
2009 will be set by the Compensation Committee during the first 180 days of the
year.

     

    Payment
of the Bonus Amount

     

    Amounts
due to the Participants for the ROAE Bonus for any year will be paid
concurrently with the filing of the Company’s Annual Report on Form 10-K for
that year or March 15 of the year following the performance period, whichever is
earlier (the “Payment Date”).  In no event will the Payment Date be
later than March 15.

     

    Amounts
due to the Participants for the ROAE Bonus for any year will be paid, at the
election of the Participant, in cash, in Common Stock, or in a combination of
cash and Common Stock.  To the extent the Participant chooses to
receive payment of all or a portion of the ROAE Bonus amount in Common Stock,
the amount paid in Common Stock will be increased by 5%.

     

    Any
Common Stock granted as payment of all or any portion of the ROAE Bonus amount
due to a Participant will be granted under and pursuant to the terms of the
Company’s 2009 Stock and Incentive Plan (the “2009 Plan”), if approved by
shareholders.  Such Common Stock will be determined using the Fair
Market Value (as defined in the 2009 Plan) of the Common Stock on the Payment
Date.  If the 2009 Plan is not approved by shareholders, then all ROAE
Bonus amounts will be paid only in cash.

    

    

    

    Approved
by the Compensation Committee of the Board on March 26, 2009.

    Approved
by the Board of Directors on March 30, 2009.ex10-10.htm

    Exhibit 10.10

     

    DYNEX
CAPITAL, INC.

     

    PERFORMANCE
BONUS POOL

     

    FOR
CAPITAL RAISING ACTIVITIES

     

    The
following describes the performance bonus pool for capital raising activities
for calendar year 2009 (the “Capital Bonus Pool”).  The purpose of the
Capital Bonus Pool is to compensate certain eligible participants for equity
capital raising activities during 2009.  The eligible participants
will be determined by the Compensation Committee of the Board of Directors, and
will include at a minimum, Thomas Akin, Chief Executive Officer, Byron Boston,
Chief Investment Officer, and Stephen Benedetti, Chief Financial Officer and
Chief Operating Officer (together with any other participants determined by the
Compensation Committee, the “Participants”)

     

    Determination
of the Capital Bonus Pool

     

    The
amount available in the Capital Bonus Pool will be equal to 1% of the gross
amount of preferred and/or common equity capital raised by the Company in 2009
provided that the aggregate amount of such equity capital raised during 2009
equals or exceeds $50 million.  The equity capital raised will exclude
any amounts raised, if any, via a dividend reinvestment program, the Company’s
Controlled Equity Offering (“CEO”) program, or any similar “at the market”
offering program, provided, however, that amounts raised through issuances
pursuant to the CEO or similar “at the market” offering programs as a result of
privately negotiated transactions will be included in the equity capital amount
that determines the Capital Bonus Pool.   Such amounts will be
determined in the sole discretion of the Compensation Committee.

     

    The
amount available for the Capital Bonus Pool will be determined on the closing
date of each respective offering (the “Determination Date”).  The
initial Determination Date will be the closing date of the first equity offering
that equals or exceeds $50 million in the aggregate.  Payments under
the Capital Bonus Pool will be made in shares of restricted common stock of the
Company or in cash, as discussed below.  For payments in shares of
restricted common stock of the Company, the stock price used to calculate the
number of shares to be granted to each Participant on each Determination Date
will be equal to the weighted average issue price per share of that equity
capital raised.  With respect to the initial Determination Date, in
the event that there are multiple equity offerings necessary to equal or exceed
the $50 million threshold, the stock price used to calculate the number of
shares to be granted to each Participant will be equal to the weighted average
issue price per share for all of the capital raises making up such multiple
equity offerings.

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    Allocation
of the Capital Bonus Pool

     

    The
Capital Bonus Pool will be allocated by the Compensation Committee of the Board
of Directors among the individual Participants based on recommendations made by
the Chief Executive Officer of the Company and the assessment by the
Compensation Committee of the Board of Directors of each Participant's
contribution to the equity capital raising activities of the
Company.  The Compensation Committee will make these allocation
determinations shortly before each Determination Date.

     

    Payment
of the Capital Bonus Pool

     

    Payment
of amounts due to the Participants under the Capital Bonus Pool will be made
within 10 business days immediately following each Determination Date in the
form of restricted common stock of the Company granted under and pursuant to the
terms of the Company’s then applicable equity compensation plan that has been
approved by shareholders, as the same may be amended from time to time (the
“Incentive Plan).  Such restricted stock will vest 100% on the second
anniversary of such Determination Date, provided such vesting provisions are
permitted by the Incentive Plan.  If such vesting provisions are not
permitted by the Incentive Plan on such Determination Date, the amounts due
under the Capital Bonus Pool for that Determination Date will be paid to the
Participant in cash within 10 business days following such Determination
Date.  All Determination Dates will occur during calendar year 2009,
and all payments under the Capital Bonus Pool will be paid in cash or stock on
or before March 15, 2010.

     

    

    

    Approved
by the Compensation Committee of the Board of Directors on March 26,
2009

    Approved
by the Board of Directors on March 30, 2009

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