Document:

Notice of Stock Option Award

EXHIBIT
10.3

DELTA
FINANCIAL CORPORATION 2005 STOCK INCENTIVE PLAN

 

NOTICE
OF STOCK OPTION AWARD

 

 

	
      Grantee’s
      Name and Address:
	 
	 	 
	 	 

 

You (the
“Grantee”) have been granted an option to purchase shares of Common Stock,
subject to the terms and conditions of this Notice of Stock Option Award (the
“Notice”), the Delta Financial Corporation 2005 Stock Incentive Plan, as amended
from time to time (the “Plan”), and the Stock Option Award Agreement (the
“Option Agreement”) attached hereto, as follows. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.

 

	
      Award
      Number 
	 
	
      Date
      of Award 
	 
	
      Vesting
      Commencement Date 
	 
	
      Exercise
      Price per Share 
	
      $

	
      Total
      Number of Shares Subject
	 
	
      to
      the Option (the “Shares”)
	 
	
      Total
      Exercise Price 
	
      $

	
      Type
      of Option: 
	
      Non-Qualified
      Stock Option

	
      Expiration
      Date: 
	 
	
      Post-Termination
      Exercise Period:
	
      Thirty
      (30) Days

 

Vesting
Schedule:

 

Subject
to the Grantee’s Continuous Service and other limitations set forth in this
Notice, the Plan and the Option Agreement, the Option may be exercised, in whole
or in part, in accordance with the following schedule:

 

20% of
the Shares subject to the Option shall on each yearly anniversary of the Vesting
Commencement Date such that the Option will be fully vested five (5) years after
the Vesting Commencement Date. 

 

During
any authorized leave of absence, the vesting of the Option as provided in this
schedule shall be suspended after the leave of absence exceeds a period of
ninety (90) days. Vesting of the Option shall resume upon the Grantee’s
termination of the leave of absence and return to service to the Company or a
Related Entity. The Vesting Schedule of the Option shall be extended by the
length of the suspension.

 

1

In the
event of termination of the Grantee’s Continuous Service for Cause, the
Grantee’s right to exercise the Option shall terminate concurrently with the
termination of the Grantee’s Continuous Service, except as otherwise determined
by the Administrator.

 

IN
WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree
that the Option is to be governed by the terms and conditions of this Notice,
the Plan, and the Option Agreement.

 

Delta
Financial Corporation,

a
Delaware corporation

 

By:   
________________________________________

 

Title:
________________________________________

 

THE
GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT
OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO
TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH
OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A
WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S
STATUS IS AT WILL.

 

The
Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and
represents that he or she is familiar with the terms and provisions thereof, and
hereby accepts the Option subject to all of the terms and provisions hereof and
thereof. The Grantee has reviewed this Notice, the Plan, and the Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Notice, and fully understands all provisions of
this Notice, the Plan and the Option Agreement. The Grantee hereby agrees that
all questions of interpretation and administration relating to this Notice, the
Plan and the Option Agreement shall be resolved by the Administrator in
accordance with Section 13 of the Option Agreement. The Grantee further
agrees to the venue selection and waiver of a jury trial in accordance with
Section 14 of the Option Agreement. The Grantee further agrees to notify
the Company upon any change in the residence address indicated in this
Notice.

 

Dated:
____________________________________________________          Signed:
__________________________________________________________

                         
Grantee

 

 

2

Award
Number: ___________

 

DELTA
FINANCIAL CORPORATION 2005 STOCK INCENTIVE PLAN

 

STOCK
OPTION AWARD AGREEMENT

 

1.     Grant
of Option. Delta
Financial Corporation, a Delaware corporation (the “Company”), hereby grants to
the Grantee (the “Grantee”) named in the Notice of Stock Option Award (the
“Notice”), an option (the “Option”) to purchase the Total Number of Shares of
Common Stock subject to the Option (the “Shares”) set forth in the Notice, at
the Exercise Price per Share set forth in the Notice (the “Exercise Price”)
subject to the terms and provisions of the Notice, this Stock Option Award
Agreement (the “Option Agreement”) and the Company’s 2005 Stock Incentive Plan,
as amended from time to time (the “Plan”), which are incorporated herein by
reference. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

 

The
Option is intended to qualify as a Non-Qualified Stock Option and not as an
Incentive Stock Option as defined in Section 422 of the Code. 

 

2.     Exercise
of Option.

 

(a) Right
to Exercise. The
Option shall be exercisable during its term in accordance with the Vesting
Schedule set out in the Notice and with the applicable provisions of the Plan
and this Option Agreement. The Option shall be subject to the provisions of
Section ‎11 of the
Plan relating to the exercisability or termination of the Option in the event of
a Corporate Transaction or Change in Control. The Grantee shall be subject to
reasonable limitations on the number of requested exercises during any monthly
or weekly period as determined by the Administrator. In no event shall the
Company issue fractional Shares. 

 

(b) Method
of Exercise. The
Option shall be exercisable by delivery of an exercise notice or by such other
procedure as specified from time to time by the Administrator which shall state
the election to exercise the Option, the whole number of Shares in respect of
which the Option is being exercised, and such other provisions as may be
required by the Administrator. The exercise notice shall be delivered in person,
by certified mail, or by such other method (including electronic transmission)
as determined from time to time by the Administrator to the Company accompanied
by payment of the Exercise Price. The Option shall be deemed to be exercised
upon receipt by the Company of such notice accompanied by the Exercise Price,
which, to the extent selected, shall be deemed to be satisfied by use of the
broker-dealer sale and remittance procedure to pay the Exercise Price provided
in Section ‎0,
below.

 

(c) Taxes. No
Shares will be delivered to the Grantee or other person pursuant to the exercise
of the Option until the Grantee or other person has made arrangements acceptable
to the Administrator for the satisfaction of applicable income tax and
employment tax withholding obligations, including, without limitation, such
other tax obligations of the Grantee incident to the receipt of Shares. Upon
exercise of the Option, the Company or the Grantee’s employer may offset or
withhold (from any amount owed by the Company or the Grantee’s employer to the
Grantee) or collect from the Grantee or other person an amount sufficient to
satisfy such tax withholding obligations.

 

3

3.     Method
of Payment. Payment
of the Exercise Price shall be made by any of the following, or a combination
thereof, at the election of the Grantee; provided, however, that such exercise
method does not then violate any Applicable Law and, provided further, that the
portion of the Exercise Price equal to the par value of the Shares must be paid
in cash or other legal consideration permitted by the Delaware General
Corporation Law:

 

(a) cash;

 

(b) check;

 

(c) surrender
of Shares or delivery of a properly executed form of attestation of ownership of
Shares as the Administrator may require which have a Fair Market Value on the
date of surrender or attestation equal to the aggregate Exercise Price of the
Shares as to which the Option is being exercised, provided, however, that Shares
acquired under the Plan or any other equity compensation plan or agreement of
the Company must have been held by the Grantee for a period of more than six (6)
months (and not used for another Award exercise by attestation during such
period); or

 

(d) payment
through a broker-dealer sale and remittance procedure pursuant to which the
Grantee (i) shall provide written instructions to a Company-designated brokerage
firm to effect the immediate sale of some or all of the purchased Shares and
remit to the Company sufficient funds to cover the aggregate exercise price
payable for the purchased Shares and (ii) shall provide written directives to
the Company to deliver the certificates for the purchased Shares directly to
such brokerage firm in order to complete the sale transaction.

 

4.     Restrictions
on Exercise. The
Option may not be exercised if the issuance of the Shares subject to the Option
upon such exercise would constitute a violation of any Applicable Laws. If the
exercise of the Option within the applicable time periods set forth in
Sections 5, 6 and 7 of this Option Agreement is prevented by the provisions
of this Section 4, the Option shall remain exercisable until one (1) month
after the date the Grantee is notified by the Company that the Option is
exercisable, but in any event no later than the Expiration Date set forth in the
Notice.

 

5.     Termination or
Change of Continuous Service. In the
event the Grantee’s Continuous Service terminates, other than for Cause, the
Grantee may, but only during the Post-Termination Exercise Period, exercise the
portion of the Option that was vested at the date of such termination (the
“Termination Date”). The Post-Termination Exercise Period shall commence on the
Termination Date. In the event of termination of the Grantee’s Continuous
Service for Cause, the Grantee’s right to exercise the Option shall, except as
otherwise determined by the Administrator, terminate concurrently with the
termination of the Grantee’s Continuous Service (also the “Termination Date”).
In no event, however, shall the Option be exercised later than the Expiration
Date set forth in the Notice. In the event of the Grantee’s change in status
from Employee, Director or Consultant to any other status of Employee, Director
or Consultant, the Option shall remain in effect and the Option shall continue
to vest in accordance with the Vesting Schedule set forth in the Notice. Except
as provided in Sections ‎6 and
‎7 below,
to the extent that the Option was unvested on the Termination Date, or if the
Grantee does not exercise the vested portion of the Option within the
Post-Termination Exercise Period, the Option shall terminate.

 

4

6.     Disability
of Grantee. In the
event the Grantee’s Continuous Service terminates as a result of his or her
Disability, the Grantee may, but only within twelve (12) months commencing on
the Termination Date (but in no event later than the Expiration Date), exercise
the portion of the Option that was vested on the Termination Date. To the extent
that the Option was unvested on the Termination Date, or if the Grantee does not
exercise the vested portion of the Option within the time specified herein, the
Option shall terminate. 

 

7.     Death
of Grantee. In the
event of the termination of the Grantee’s Continuous Service as a result of his
or her death, or in the event of the Grantee’s death during the Post-Termination
Exercise Period or during the twelve (12) month period following the
Grantee’s termination of Continuous Service as a result of his or her
Disability, the person who acquired the right to exercise the Option pursuant to
Section 8 may exercise the portion of the Option that was vested at the
date of termination within twelve (12) months commencing on the date of
death (but in no event later than the Expiration Date). To the extent that the
Option was unvested on the date of death, or if the vested portion of the Option
is not exercised within the time specified herein, the Option shall
terminate.

 

8.     Transferability
of Option. The
Option may not be transferred in any manner other than by will or by the laws of
descent and distribution, provided, however, that the Option may be transferred
during the lifetime of the Grantee to the extent and in the manner authorized by
the Administrator. Notwithstanding the foregoing, the Grantee may designate one
or more beneficiaries of the Grantee’s Option in the event of the Grantee’s
death on a beneficiary designation form provided by the Administrator. Following
the death of the Grantee, the Option, to the extent provided in Section 7,
may be exercised (a) by the person or persons designated under the deceased
Grantee’s beneficiary designation or (b) in the absence of an effectively
designated beneficiary, by the Grantee’s legal representative or by any person
empowered to do so under the deceased Grantee’s will or under the then
applicable laws of descent and distribution. The terms of the Option shall be
binding upon the executors, administrators, heirs, successors and transferees of
the Grantee. 

 

9.     Term
of Option. The
Option must be exercised no later than the Expiration Date set forth in the
Notice or such earlier date as otherwise provided herein. After the Expiration
Date or such earlier date, the Option shall be of no further force or effect and
may not be exercised.

 

10.    Tax
Consequences. Set
forth below is a brief summary as of the date of this Option Agreement of some
of the federal tax consequences of exercise of the Option and disposition of the
Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

 

5

(a) Exercise
of Non-Qualified Stock Option. On
exercise of a Non-Qualified Stock Option, the Grantee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If the Grantee is an Employee or a former Employee, the
Company will be required to withhold from the Grantee’s compensation or collect
from the Grantee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.

 

(b) Disposition
of Shares. In the
case of a Non-Qualified Stock Option, if Shares are held for more than one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. 

 

11.     Entire
Agreement: Governing Law. The
Notice, the Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to
the Grantee’s interest except by means of a writing signed by the Company and
the Grantee. Nothing in the Notice, the Plan and this Option Agreement (except
as expressly provided therein) is intended to confer any rights or remedies on
any persons other than the parties. The Notice, the Plan and this Option
Agreement are to be construed in accordance with and governed by the internal
laws of the State of New York without giving effect to any choice of law rule
that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of New York to the rights and duties of the parties.
Should any provision of the Notice, the Plan or this Option Agreement be
determined to be illegal or unenforceable, such provision shall be enforced to
the fullest extent allowed by law and the other provisions shall nevertheless
remain effective and shall remain enforceable. 

 

12.     Construction. The
captions used in the Notice and this Option Agreement are inserted for
convenience and shall not be deemed a part of the Option for construction or
interpretation. Except when otherwise indicated by the context, the singular
shall include the plural and the plural shall include the singular. Use of the
term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

 

13.     Administration
and Interpretation. Any
question or dispute regarding the administration or interpretation of the
Notice, the Plan or this Option Agreement shall be submitted by the Grantee or
by the Company to the Administrator. The resolution of such question or dispute
by the Administrator shall be final and binding on all persons. 

 

14.     Venue
and Waiver of Jury Trial. The
Company, the Grantee, and the Grantee’s assignees pursuant to Section 8
(the “parties”) agree that any suit, action, or proceeding arising out of or
relating to the Notice, the Plan or this Option Agreement shall be brought in
the United States District Court for the Southern District of New York (or
should such court lack jurisdiction to hear such action, suit or proceeding, in
a New York state court in the County of New York) and that the parties shall
submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying
of venue for any such suit, action or proceeding brought in such court. THE
PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF
ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this
Section 14 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions shall be modified to the
minimum extent necessary to make it or its application valid and
enforceable.

 

6

15. Notices. Any
notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the
United States mail by certified mail (if the parties are within the United
States), with postage and fees prepaid, addressed to the other party at its
address as shown in these instruments, or to such other address as such party
may designate in writing from time to time to the other party.

 

 

END
OF AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

72005 Sr. Executive Bonus Plan

EXHIBIT
10.4

 

 

 

DELTA
FINANCIAL CORPORATION

2005
SENIOR EXECUTIVE BONUS PLAN

 

SECTION
1

ESTABLISHMENT
AND PURPOSE

 

 

1.1     Purpose.
Delta Financial Corporation hereby establishes the Delta Financial Corporation
2005 Senior Executive Bonus Plan (the “Plan”). The Plan is intended to increase
stockholder value and the success of the Company by motivating key executives
(a) to perform to the best of their abilities, and (b) to achieve the Company’s
objectives. The Plan’s goals are to be achieved by providing such executives
with incentive awards based on the achievement of goals relating to performance
of the Company and its individual business units. The Plan is intended to
qualify as performance-based compensation under Code Section
162(m).

 

1.2     Effective
Date. The Plan shall be effective upon its adoption by the Board, subject to
approval by stockholders of the Company at the 2005 Annual Meeting. As long as
the Plan remains in effect, it shall be resubmitted to stockholders as necessary
to enable the Plan to continue to qualify as performance-based compensation
under Code Section 162(m).

 

 

SECTION
2

DEFINITIONS

 

The
following words and phrases shall have the following meanings unless a different
meaning is plainly required by the context:

 

2.1     “Actual
Award” means as to any Plan Year, the actual award (if any) payable to a
Participant for the Plan Year. The Actual Award is determined by the Payout
Formula for the Plan Year, subject to the Committee’s authority under
Section 3.5 to reduce the award otherwise determined by the Payout
Formula.

 

2.2     “Base
Salary” means as to any Plan Year, 100% of the Participant’s annualized salary
rate on the last day of the Plan Year. Such Base Salary shall be before both (a)
deductions for taxes or benefits, and (b) deferrals of compensation pursuant to
Company-sponsored plans.

 

2.3     “Beneficiary”
shall mean the person(s) or entity(ies) designated to receive payment of an
Actual Award in the event of a Participant’s death in accordance with Section
4.5 of the Plan. The Beneficiary designation shall be effective when it is
submitted in writing to and acknowledged by the Committee during the
Participant’s lifetime on the Beneficiary Designation form provided in Appendix
A of the Plan. The submission of a new Beneficiary Designation form shall cancel
all prior Beneficiary Designations.

 

2.4     “Board”
means the Company’s Board of Directors.

 

1

 

2.5     “Code”
means the Internal Revenue Code of 1986, as amended. Reference to a specific
Section of the Code shall include such Section, any valid regulation promulgated
thereunder, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such Section or regulation.

 

2.6     “Committee”
means the committee appointed by the Board to administer the Plan. The Committee
shall consist of no fewer than two members of the Board. The members of the
Committee shall be appointed by, and serve at the pleasure of, the Board. Each
member of the Committee shall qualify as an “outside director” under Code
Section 162(m).

 

2.7     “Company”
means Delta Financial Corporation, a Delaware corporation.

 

2.8     “Determination
Date” means as to any Plan Year, (a) the first day of the Plan Year, or (b) if
later, the latest date possible which will not jeopardize the Plan’s
qualification as performance-based compensation under Code Section
162(m).

 

2.9     “Disability”
means a permanent and total disability determined in accordance with uniform and
nondiscriminatory standards adopted by the Committee from time to
time.

 

2.10     “Maximum
Award” means as to any Participant for any Plan Year, five million ($5,000,000)
dollars. The Maximum Award is the maximum amount which may be paid to a
Participant for any Plan Year.

 

2.11     “Participant”
means as to any Plan Year, an officer of the Company who has been selected by
the Committee for participation in the Plan for that Plan Year.

 

2.12     “Payout
Formula” means as to any Plan Year, the formula or payout matrix established by
the Committee pursuant to Section 3.4, below, in order to determine the Actual
Awards (if any) to be paid to Participants. The formula or matrix may differ
from Participant to Participant.

 

2.13     “Performance
Goals” means the goal(s) (or combined goal(s)) determined by the Committee (in
its discretion) to be applicable to a Participant for a Plan Year. As determined
by the Committee, the Performance Goals applicable to each Participant shall
provide for a targeted level or levels of achievement using one or more of the
following measures: (a) increase in share price, (b) earnings per share, (c)
total stockholder return, (d) operating margin, (e) gross margin, (f) return on
equity, (g) return on assets, (h) return on investment, (i) operating income,
(j) net operating income, (k) pre-tax income, (l) cash flow, (m) revenue, (n)
expenses, (o) earnings before interest, taxes and depreciation, (p) economic
value added, (q) market share, (r) cost to originate loans, (s) loan quality,
(t) loan origination, (u) corporate overhead costs, (v) loan delinquency
rates, (w) liquidity management, (x) loan losses, (y) net interest income,
(z) net interest income margin, (aa) return on capital invested, (bb)
stockholders’ equity, (cc) income (before income tax expense). The Performance
Goals may be applicable to the Company and/or any of its subsidiaries or
individual business units and may differ from Participant to
Participant.

 

 

2

2.14     “Plan
Year” means the fiscal year of the Company beginning in 2005 and each succeeding
fiscal year of the Company.

 

2.15     “Target
Award” means the target award payable under the Plan to a Participant for the
Plan Year, expressed as a percentage of his or her Base Salary or an amount, as
determined by the Committee in accordance with Section 3.3.

 

 

SECTION
3

SELECTION
OF PARTICIPANTS AND DETERMINATION OF AWARDS

 

 

3.1     Selection
of Participants. On or prior to the Determination Date, the Committee, in its
sole discretion, shall select the officers of the Company who shall be
Participants for the Plan Year. In selecting Participants, the Committee shall
choose officers who are likely to have a significant impact on the performance
of the Company. Participation in the Plan is in the sole discretion of the
Committee, and on a Plan Year by Plan Year basis. Accordingly, an officer who is
a Participant for a given Plan Year in no way is guaranteed or assured of being
selected for participation in any subsequent Plan Year or Years.

 

3.2     Determination
of Performance Goals. On or prior to the Determination Date, the Committee, in
its sole discretion, shall establish the Performance Goals for each Participant
for the Plan Year. Such Performance Goals shall be set forth in
writing.

 

3.3     Determination
of Target Awards. On or prior to the Determination Date, the Committee, in its
sole discretion, shall establish a Target Award for each Participant. Each
Participant’s Target Award shall be determined by the Committee in its sole
discretion, and each Target Award shall be set forth in writing.

 

3.4     Determination
of Payout Formula or Formulae. On or prior to the Determination Date, the
Committee, in its sole discretion, shall establish a Payout Formula or Formulae
for purposes of determining the Actual Award (if any) payable to each
Participant. Each Payout Formula shall (a) be in writing, (b) be based on a
comparison of actual performance to the Performance Goals, (c) provide for the
payment of a Participant’s Target Award if the Performance Goals for the Plan
Year are achieved, and (d) provide for an Actual Award greater than or less than
the Participant's Target Award, depending upon the extent to which actual
performance exceeds or falls below the Performance Goals. Notwithstanding the
preceding, no participant’s Actual Award under the Plan may exceed the Maximum
Award.

 

3.5     Determination
of Actual Awards. After the end of each Plan Year, the Committee shall certify
in writing the extent to which the Performance Goals applicable to each
Participant for the Plan Year were achieved or exceeded. The Actual Award for
each Participant shall be determined by applying the Payout Formula to the level
of actual performance which has been certified by the Committee. Notwithstanding
any contrary provision of the Plan, (a) the Committee, in its sole discretion,
may eliminate or reduce the Actual Award payable to any Participant below that
which otherwise would be payable under the Payout Formula, (b) if a Participant
terminates employment with the Company prior to the date the Actual Award for
the Plan Year is paid, the Committee shall reduce his or her Actual Award
proportionately based on the date of termination (and subject to further
reduction or elimination under clause (a) of this sentence).

 

3

 

SECTION
4

PAYMENT
OF AWARDS

 

 

4.1     Right to
Receive Payment. Each Actual Award that may become payable under the Plan shall
be paid solely from the general assets of the Company. Nothing in this Plan
shall be construed to create a trust or to establish or evidence any
Participant’s claim of any right other than as an unsecured general creditor
with respect to any payment to which he or she may be entitled.

 

4.2     Timing of
Payment. Payment of each Actual Award shall be made within two and one-half
months after the Committee determines the amount of the Actual Award (if any)
under Section 3.5.

 

4.3     Form of
Payment. Each Actual Award normally shall be paid in cash (or its equivalent) in
a single lump sum. However, the Committee, in its sole discretion, may declare
any Actual Award, in whole or in part, payable in the form of a restricted stock
bonus granted under the Company’s 2005 Stock Incentive Plan or successor equity
compensation plan. The number of shares granted shall be determined by dividing
the cash amount of the Actual Award by the fair market value of a share of
Company common stock on the date that the cash payment otherwise would have been
made. For this purpose, “fair market value” shall be defined as provided in the
Company’s 2005 Stock Incentive Plan or successor equity compensation
plan.

 

4.4     Other
Deferral of Actual Awards. The Committee may establish one or more programs
under the Plan to permit selected Participants the opportunity to elect to defer
receipt of Actual Awards. The Committee may establish the election procedures,
the timing of such elections, the mechanisms for payments of, and accrual of
interest or other earnings, if any, on amounts so deferred, and such other
terms, conditions, rules and procedures that the Committee deems advisable for
the administration of any such deferral program.

 

4.5     Payment in
the Event of Death. If a Participant dies prior to the payment of an Actual
Award earned by him or her for a Plan Year, the Actual Award shall be paid to
the Participant’s Beneficiary. If a Participant fails to designate a Beneficiary
or if each person designated as a Beneficiary predeceases the Participant or
dies prior to distribution of the Participant’s benefits, then the Committee
shall direct the distribution of such benefits to the Participant’s
estate.

 

 

SECTION
5

ADMINISTRATION

 

 

5.1     Committee
is the Administrator. The Plan shall be administered by the
Committee.

 

4

5.2     Committee
Authority. The Committee shall have all discretion and authority necessary or
appropriate to administer the Plan and to interpret the provisions of the Plan,
consistent with qualification of the Plan as performance-based compensation
under Code Section 162(m). Any determination, decision or action of the
Committee in connection with the construction, interpretation, administration or
application of the Plan shall be final, conclusive, and binding upon all
persons, and shall be given the maximum deference permitted by law.

 

5.3     Tax
Withholding. The Company shall withhold all applicable taxes from any payment,
including any non-U.S., federal, state, and local taxes.

 

 

SECTION
6

GENERAL
PROVISION

 

 

6.1     Nonassignability. A
Participant shall have no right to assign or transfer any interest under this
Plan.

 

6.2     No Effect
on Employment. The establishment and subsequent operation of the Plan, including
eligibility as a Participant, shall not be construed as conferring any legal or
other rights upon any Participant for the continuation of his or her employment
for any Plan Year or any other period. Generally, employment with the Company is
on an at will basis only. Except as may be provided in an employment contract
with the Participant, the Company expressly reserves the right, which may be
exercised at any time during a Plan Year, to terminate any individual’s
employment without cause and without regard to the effect such termination might
have upon the Participant’s receipt of an Actual Award under the
Plan.

 

6.3     No
Individual Liability. In addition to such other rights of indemnification as
they may have as members of the Board or as officers or employees of the
Company, members of the Board and any officers or employees of the Company to
whom authority to act for the Board, the Committee or the Company is delegated
shall be defended and indemnified by the Company to the extent permitted by law
on an after-tax basis against all reasonable expenses, including attorneys’
fees, actually and necessarily incurred in connection with the defense of any
claim, investigation, action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan and against
all amounts paid by them in settlement thereof (provided such settlement is
approved by the Company) or paid by them in satisfaction of a judgment in any
such claim, investigation, action, suit or proceeding, except in relation to
matters as to which it shall be adjudged in such claim, investigation, action,
suit or proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct; provided, however, that within thirty (30) days after
the institution of such claim, investigation, action, suit or proceeding, such
person shall offer to the Company, in writing, the opportunity at the Company’s
expense to defend the same.

 

6.4     Severability;
Governing Law. If any provision of the Plan is found to be invalid or
unenforceable, such provision shall not affect the other provisions of the Plan,
and the Plan shall be construed in all respects as if such invalid provision has
been omitted. The provisions of the Plan shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of New York.

 

 

5

6.5     Affiliates
of the Company. Requirements referring to employment with the Company or payment
of awards may, in the Committee’s discretion, be performed through the Company
or any affiliate of the Company.

 

 

SECTION
7

AMENDMENT
AND TERMINATION

 

 

7.1     Amendment
and Termination. The Board may amend or terminate the Plan at any time and for
any reason; provided, however, that if and to the extent required to ensure the
Plan’s qualification under Code Section 162(m), any such amendment shall be
subject to stockholder approval.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

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