Document:

Exhibit 10.2(j)

 

NetBank, Inc.

Mid-Term Incentive Plan

 

(Effective January 1,
2004)

 

ARTICLE 1.                                INTRODUCTION.

 

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

 

ARTICLE 2.                                DEFINITIONS.

 

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

 

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

 

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

 

2.4                                 “Business Segment Earnings Per Share”
shall mean the portion of NetBank Earnings Per Share attributable to a business
segment of NetBank, expressed as a dollar value, as determined by the
Committee. The sum of Business Segment Earnings Per Share for all business
segments shall equal NetBank Earnings Per Share.

 

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

 

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

 

1

 

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

 

2.8                                 “Code” shall mean the Internal
Revenue Code of 1986, as amended.

 

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

 

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

 

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

 

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

 

2.13                           “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

 

2.14                           “NetBank Earnings Per Share” shall
mean net income (as defined under US Generally Accepted Accounting Principles)
earned by NetBank over the Performance Period divided by the average number of
NetBank common shares outstanding over the Performance Period.

 

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

 

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

 

2.17                           “Performance Period” shall mean
the period of time over which NetBank performance is measured relative to
Target Performance for purposes of calculating a payout from the Plan and
beginning on the applicable Date of Award.

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

2.23                           “Target Performance” shall mean
the targeted NetBank Earnings Per Share and/or Business Segment Earnings Per
Share as established by the Committee at the beginning of the Performance
Period and set forth in each Agreement.

 

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

 

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

 

ARTICLE 3.                                ADMINISTRATION.

 

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

 

ARTICLE 4.                                DESCRIPTION OF PLAN.

 

At the end of a Performance
Period, each Participant will receive a number of Shares having a fair market
value, as determined as of the last day of the Performance Period, equal to a
percentage of the Target Incentive, as determined under Article 6.  A Participant will be entitled to retain any
Shares received only to the extent he or she is vested is such Shares and only
upon meeting any other conditions described in Article 6.

 

ARTICLE 5.                                GRANT OF AWARDS.

 

5.1                                 Eligibility. 
The Committee shall approve the Employees who are to receive Awards
under the Plan, the Target Incentive, the Target Performance, the Performance
Period, and all other matters relating to such Awards.  All such terms shall be established no later
than ninety (90) days following the commencement of the applicable Performance
Period.

 

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

 

3

 

ARTICLE 6.                                PERFORMANCE MODIFIER.

 

6.1                                 Performance Requirements. A Participant’s right to receive
payment of Shares under an Award shall be determined according to the following
schedule:

 

	
  actual performance over the

  Performance Period as a percentage of

  Target Performance

  	
   

  	
  value of payment as a percentage of the

  Target Incentive

  
	
  Less than 80%

  	
   

  	
  0

  	
  %

  
	
  80%

  	
   

  	
  50

  	
  %

  
	
  100%

  	
   

  	
  100

  	
  %

  
	
  120% or greater

  	
   

  	
  150

  	
  %

  

 

If actual performance
falls between any of the percentages of Target Performance (i.e., either between 80% and 100% or 100% and 120%), the
percentage of the Target Incentive to be received by the Participant shall be
determined by applying a straight-line interpolation between the next lowest
and next highest points provided above.

 

6.2                                 Additional Requirements. 
Except as otherwise provided in this Article 6, a Participant shall
be entitled to payment of Shares under an Award only if he or she is an
Employee of NetBank on the last date of the Performance Period.  Although the Participant may receive payment
of Shares under an Award at the end of the Performance Period, the Participant
is not Vested in any Shares paid under an Award until meeting any further conditions
set forth in the Agreement, including service conditions.

 

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

 

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

 

(b)                                 Death. The Participant dies
while an Employee.

 

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

 

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

 

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

 

4

 

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

 

ARTICLE 7.                                SHARES NONTRANSFERABLE.

 

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

 

ARTICLE 8.                                AMENDMENT OR TERMINATION.

 

The Committee may, at any time and for any reason,
amend or terminate the Plan.  No Awards
shall be granted under the Plan after termination, but termination or amendment
shall not affect any Award made under the Plan prior to termination or amendment.

 

ARTICLE 9.                                WITHHOLDING TAX.

 

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

 

ARTICLE 10.                          LEGALITY OF ISSUANCE.

 

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

 

ARTICLE 11.                          NO EMPLOYMENT RIGHTS.

 

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

 

5

 

ARTICLE 12.                          APPLICABLE LAW.

 

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

 

ARTICLE 13.                          EFFECTIVE DATE OF
EXECUTION.

 

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

 

	
   

  	
  NetBank, Inc.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
  Chief Human
  Resources Executive 

  
	
   

  	
   

  	
   

  
					

 

6Exhibit 10.2(k)

 

[Form of Mid-term Incentive Plan Award Agreement for
reporting persons]

 

NetBank, Inc. Mid-Term Incentive Plan Award
Agreement

 

NetBank, Inc. grants to the individual named
below an Award under the NetBank, Inc. Mid-Term Incentive Plan.

 

The terms and conditions of the Award are set forth in
this Agreement and the NetBank, Inc. Mid-Term Incentive Plan (the “Plan”).  All of the provisions of the Plan are
incorporated in this Agreement and have the same effect as if they were set
forth in full in this Agreement. 
Capitalized terms used in this Agreement have the same meaning as in the
Plan.  In the event of a discrepancy
between this Agreement and the Plan, the terms of the Plan shall prevail.

 

Name of Grantee:

 

Grantee’s Social Security Number:

 

Performance Period: 
Beginning on:                                 
and ending on:                                    

 

Target Performance and associated payouts:

 

	
   

  	
   

  	
  Award Payout

  	
   

  	
   

  	
   

  
	
  Performance

  	
   

  	
  At threshold 

  	
   

  	
  At Target 

  	
   

  	
  At Maximum

  	
   

  	
  Performance Targets

  	
   

  
	
  measure

  	
   

  	
  performance

  	
   

  	
  Performance

  	
   

  	
   Performance

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Maximum

  	
   

  
	
  NetBank EPS

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Financial intermediary EPS

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Retail banking EPS

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Processing EPS

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  
																			

 

Total Target Incentive awarded: $

 

	
  Description

  	
   

  	
  You have been awarded a
  Target Incentive, which is divided among several performance objectives,
  which will be paid to you in shares of NetBank common stock to the extent
  that NetBank’s performance, relative to those performance measures, warrants
  it, according to the schedule set forth in the Plan, as supplemented by
  the schedule above. If actual performance is below threshold, you will
  receive no value from this Award attributable to the applicable performance
  measure(s). Likewise, if performance exceeds Target 

  

 

 

	
   

  	
   

  	
  Performance for all
  performance measures, you may receive up to 150% of the Target Incentive,
  subject to the Vesting requirements described below.

  

 

 

	
  Vesting

  	
   

  	
  Fifty percent (50%) of
  any Shares awarded based on actual performance over the Performance Period
  will vest as of the last day of the Performance Period, the remaining
  unvested Shares will vest in accordance with the schedule described
  below.

  
	
   

  
	
   

  	
  Service Date from end of

  Performance Period

  	
   

  	
  Vested Percentage

  	
   

  
	
   

  	
   

  	
  12 months

  	
   

  	
  50% of remaining
  unvested Shares

  	
   

  
	
   

  	
   

  	
  24 months

  	
   

  	
  100% of
  remaining unvested Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If you experience any
  one of the events described under the heading “Early Settlement Event” below
  prior to the applicable Service Date, the remaining unvested Shares will vest
  on the date of that event.  Otherwise,
  if you cease to be an Employee of NetBank for any other reason after the end
  of the Performance Period but prior to the completion of the applicable
  Service Date above, any remaining unvested Shares will be forfeited.

  
	
   

  	
   

  	
   

  
	
  Early Settlement Event

  	
   

  	
  Your Award will become
  payable prior to the end of the Performance Period if any one of the
  following events occurs prior to its end:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •                  Your service
  as an Employee ends because of your death, Total Disability or your
  Retirement;

   

  •                  Your service
  as an Employee is terminated by NetBank without Cause and you agree to
  release any and all employment-related claims.

   

  In addition, your Award
  will become payable if one of the following occurs during the Change In
  Control Window Period:

   

  •                  Your service
  as an Employee with NetBank is terminated by NetBank for any reason except
  for Cause; or

   

  •                  You terminate
  your service as an Employee with NetBank within 30 days of a Constructive
  Termination.

   

  Though your Award will become payable in the circumstances described
  above, the payment will be on a pro rata basis and will be made if and only
  to the extent of actual performance to the event date relative to Target
  Performance in accordance with the schedule set forth in the Plan, as
  supplemented by the schedule above. 
  The pro rata payment to be made, if any, will be equal to (1) the
  payment determined by the schedules, multiplied by (2) a fraction, the
  numerator of which is the number of days from the Date of Award to the date
  of the applicable event and the denominator of which is the total numbers of
  days in the Performance Period.

   

  Any and all Shares paid
  because of the early settlement of the Award will be fully Vested and the
  Award shall be deemed fully settled as a result of the early settlement
  event.  

  
										

 

 

	
  Taxes

  	
   

  	
  Unless you make
  arrangements to pay applicable withholding taxes in cash, all payments under
  the Plan, and Shares becoming Vested after payment, will be reduced by any
  amounts NetBank, Inc. determines appropriate for applicable tax
  withholding.

  
	
   

  	
   

  	
   

  
	
  No Transfers

  	
   

  	
  Prior to Vesting, you
  may not transfer, sell or assign your Shares to anyone and, if you attempt to
  do so, your Shares will immediately become invalid.  However, you may provide for your Shares to
  be transferred to your beneficiary in the event of your death by way of the
  beneficiary designation form attached to this Agreement. 

  
	
   

  	
   

  	
   

  
	
  Notices

  	
   

  	
  Any written notices
  required under the Plan or this Agreement shall be directed to the Grantee at
  his or her address indicated by NetBank, Inc. records.  Any written notices that you direct to
  NetBank, Inc. should be sent to NetBank, Inc.’s principal executive
  office.

  
	
   

  	
   

  	
   

  
	
  Administration

  	
   

  	
  The Compensation
  Committee of the Board of Directors of NetBank, Inc. administers the
  Plan and has the same powers with respect to this Agreement as it has under
  the Plan.

  
	
   

  	
   

  	
   

  
	
  No

  Employment

  Rights

  	
   

  	
  Neither your
  participation in the Plan nor anything in this Agreement gives you the right
  to employment with NetBank, Inc. or any subsidiary of NetBank, Inc.
  in any capacity.  NetBank, Inc.
  reserves the right to terminate your service at any time and for any reason
  or for no reason.

  
	
   

  	
   

  	
   

  
	
  Shareholder Approval

  	
   

  	
  This Award is subject
  to and conditioned upon shareholder approval. 
  If shareholder approval is not obtained at the next regularly
  scheduled meeting of the shareholders of NetBank, Inc., then this Award
  and any and all rights hereunder in favor of the Grantee shall become null
  and void.  

  
	
   

  	
   

  	
   

  
	
  Applicable

  Law

  	
   

  	
  This Agreement will be
  interpreted and enforced under the laws of the state of Georgia.

  
	
   

  	
   

  	
   

  
	
  The Plan and

  Other Agreements

  	
   

  	
  The text of the Plan is
  incorporated in this Agreement by reference. If there is any inconsistency
  between this Agreement and the Plan, the terms of the Plan will govern.

   

  This Agreement and the
  Plan constitute the entire understanding between you and NetBank, Inc.
  regarding this Award, the Plan and your participation in the Plan.  Any prior agreements, commitments or
  negotiations concerning this Award are superseded.  This Agreement may be amended only by
  another written agreement, signed by both parties.

  

 

 

By
signing this Agreement, you agree to all of the terms and conditions of the
Agreement and in the Plan.

 

	
  Grantee’s signature:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  
	
  Signature of NetBank, Inc.
  Representative:

  	
   

  	
   

  
	
   

  
	
  Title of NetBank, Inc. Representative:

  	
   

  	
   

  
									

 

 

BENEFICIARY DESIGNATION FORM

 

I hereby designate
the beneficiary named below to receive all benefits to be paid to me under the
NetBank, Inc. Mid-Term Incentive Plan (the “Plan”) in the event of my
death, reserving the full right to revoke or cancel this designation, or any
modification thereof, at any time by a further written beneficiary designation:

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name of
  Individual Benficiary

  	
   

  	
  Relationship to
  Me

  	
   

  	
  Birth Date

  
	
   

  	
   

  	
   

  	
   

  	
  (if minor)

  
	
   

  
	
  Beneficiary
  address

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name of Trust

  	
   

  	
  Date of Trust

  
	
   

  	
   

  	
   

  
	
   

  
	
  Trustee and
  address

  
											

 

 

	
  Required
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Grantee/Participant’s
  Printed Name

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Grantee/Participant’s
  Signature

  	
  Date

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Spouse’s
  Signature

  	
  Date

  

 

NOTE:  This form must be
signed by the spouse of a married Grantee/Participant if the beneficiary
designated is not the spouse.

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