Document:

Exhibit 31.2 to Baylake Corp. Form 10-Q for the quarterly period ended June 30, 2008

EXHIBIT 10.1

 

FORM OF

BAYLAKE BANK

CHANGE OF CONTROL AGREEMENT

 

This Change of Control Agreement (this “Agreement”) is entered into this ___ day of _________, 2008, by and between Baylake Bank (the “Bank”) and ________________ (the “Executive”).  All terms not otherwise defined herein are defined on Exhibit A of this Agreement.

 

RECITALS

 

The Executive is employed by the Bank in an executive capacity.  The Bank is entering into this Agreement to provide severance to the Executive in the event that the Executive’s employment with the Bank is terminated without Cause, or by the Executive for Good Reason, after the occurrence of a Change of Control of Baylake Corp. (the “Parent”) so that if such a Change of Control is anticipated, the Executive will be able to focus on the Bank’s business without distraction.

 

1.                  Severance Benefit.  If the Executive’s employment with the Bank is terminated without Cause, or if the Executive terminates his employment for Good Reason, within 12 months after the occurrence of a Change of Control, he will be entitled to the following:

 

(a)           Accrued Obligations.  Within 20 days after the termination of employment occurs, payment of  the Executive’s then current base salary through the termination date, any benefits accrued under the applicable Bank plans through the termination date and any annual incentive payment for the year prior to the year in which the Executive’s employment terminates which has been accrued but not paid (hereafter, jointly, the “Accrued Obligations”), except if the terms of the applicable plans provide otherwise;

 

(b)           Cash Lump-Sum
Payment. A cash lump-sum payment equal to ___ times the sum of (i) the greater of the Executive’s
annual base salary when the Change of Control occurs or when his/her employment terminates, (ii) the greater of (A) the
target bonus to which the Executive would be entitled for the year in which the Change of Control occurs under the Bank’s or
the Parent’s annual incentive plan, (B)  the target bonus to which the Executive would be entitled for the year in which
the termination of employment occurs under the Bank’s or the Parent’s annual incentive plan, or (C) the annual
incentive bonus which the Executive received which was attributable to services rendered during the year prior to the year in
which the termination of employment occurs, and (iii) an amount equal to the contribution by the Bank or the Parent to any ERISA
qualified retirement plan(s) on behalf of the Executive for the year prior to the year in which the termination of employment
occurs. Such cash lump sum payment shall be paid to the Executive within 20 days after the termination of employment occurs,
except as provided in the following sentence. If The Bank determines that the Executive is a “specified employee” within
the meaning of Section 409A(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of
termination of employment, and payments to the Executive do not fit under the “short term deferral” or “separation
pay plan” exceptions to Section 409A coverage contained in Treas. Reg. §1.409A 1(b)(4) and §1.409A 1(b)(9),
respectively, then the Bank will delay such payments to the minimum extent necessary to avoid the 20% penalty tax under Code
Section 409A. Any such delayed payments shall be paid to Executive on the first day of the seventh month after Executive’s
termination of employment, and will bear interest from the date such payments were due under this Agreement to the date of payment
at the applicable Federal short term rate under Section 1234(d) of the Code, as established by the IRS for the month in which the
Executive’s employment terminated.

 

(c)           Health Insurance Continuation.  If the Executive properly elects continued medical and dental coverage under COBRA, payment by the Bank of a dollar amount of the monthly premiums for the initial 12 months of the COBRA period such that the Executive’s share of the monthly premiums is the same as it would be if he were an active employee, provided, however, if the Executive become eligible for medical and/or dental coverage from another employer, this benefit shall cease.

 

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2.                 Cut-Back to Avoid Parachute Tax Exposure.  Notwithstanding any other provision of this Agreement, if any portion of the payments owing under Section 1 of this Agreement, or under any other agreement with or plan of the Parent or the Bank (in the aggregate “Total Payments”), would constitute an “excess parachute payment,” then the Total Payments to be made to the Executive shall be reduced such that the value of the aggregate Total Payments that the Executive is entitled to receive shall be One Dollar ($1) less than the maximum amount which the Executive may receive without becoming subject to the parachute tax imposed by Section 4999 of the Code (or any successor provision)
or which the Bank may pay without loss of deduction under
Section 280G(a) of the Code (or any successor provision).  For purposes of this Agreement, the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to them in Section 280G of the Code (or any successor provision), and such “parachute payments” shall be valued as provided therein or in other applicable guidance.  If necessary to avoid the imposition of the parachute tax, Total Payments shall be reduced or eliminated as specified by the Executive in writing delivered to the Bank within ten business days of the Executive’s receipt of notice that such reduction will be necessary or, if the Executive fails to so notify the Bank, then as the Bank shall reasonably determine, so that there will be no excess parachute payment.

 

	
 
 	
3.
 	
Covenants.
 

 

(a)           General Non-Competition Provisions.  During the one-year period after the termination of the Executive’s employment (such one-year period referred to hereafter as the “Restricted Period”), the Executive agrees not to provide Restricted Services that directly or indirectly benefit any Competitor’s business activities within a 30-mile radius of any of the Bank’s business locations where the Executive has an office.  “Restricted Services” means services substantially similar to the type performed by the Executive for the Bank during the 24-month period preceding the end of the Executive’s employment with the Bank.  A “Competitor” means an entity in the financial services business which is engaged in providing commercial banking or
wealth management products or services.  For all purposes of this Section 3, the “Company” means the Bank, Baylake Corp. and any subsidiaries of either the Bank or Baylake Corp.

 

(b)           Nonsolicitation of Customers.  During the Restricted Period, the Executive may not, directly or indirectly, attempt to sell to any Restricted Customer, any goods, products or services of the type or substantially similar to the type sold by the Company.  The term Restricted Customer means any individual or entity (i) for whom/which the Company provides goods, products or services and (ii) with whom/which the Executive had direct contact on behalf of the Company, or about whom/which the Executive acquired non-public information in connection with his/her employment by the Company, during the 24 month period preceding the end of the Executive’s employment with the Company.  The term “direct contact” as used in this paragraph means focused intentional contact by
the Executive to either maintain or enhance the Company’s business relationship with such individual or entity, whether such contact was in person, by phone or in writing.

 

(c)           Nonsolicitation of Employees.  During the Restricted Period, the Executive may not directly or indirectly encourage any employee of the Company to terminate his/her employment with the Company or solicit such an individual for employment in a manner which would end or diminish that employee’s services to the Company.

 

(d)           Confidential Information.  During the Executive’s employment with the Bank and the Restricted Period, the Executive may not directly or indirectly use, possess or disclose any Confidential Information except in the interest and for the benefit of the Company.  For purposes of this paragraph, the term “Confidential Information” means all information of, about or related to the Company or provided to the Company by its customers that is not known generally to the public or the Company’s competitors.  Confidential Information includes but is not limited to: (i)  product specifications, information about products under development, business plans, financial information, customer lists, information about transactions with customers, sales and marketing
strategies and plans, acquisition strategies and plans, pricing strategies and plans, information relating to sources and costs of services, personnel information and business records; and (ii) information which is marked or otherwise designated as confidential or proprietary by the Company; provided, however, that Confidential Information shall not include any information which (w) can be demonstrated by the Executive to have been known by him/her prior to his/her employment by the Bank; (x) is or becomes generally available to the public through no act or omission of the Executive; (y) is obtained by the Executive in good faith from a third party who discloses such information to the Executive on a non-confidential basis without violating any obligation of confidentiality or secrecy relating to the information disclosed; or (z) is independently developed by the
Executive outside the scope of his/her employment without use of Confidential Information or Trade Secrets of the Company.  If the Executive is requested or becomes legally required or compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, or similar process) or is required by a governmental body to make any disclosure that is prohibited or otherwise constrained by this Agreement, the Executive will provide the Bank with prompt written notice of such request so that it may seek an appropriate protective order or other appropriate remedy.  Subject to the foregoing, the Executive may furnish that portion (and only that portion) of the Confidential Information that the Executive is legally compelled or is otherwise required to disclose.

 

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(e)           Trade Secrets.  Executive hereby covenants and agrees that Executive shall not, directly or indirectly, use, possess or disclose any Trade Secret.  “Trade Secret” has that meaning set forth under applicable law.  The term includes, but is not limited to, all computer source code, provided, however, that Trade Secrets shall not include any information which (w) can be demonstrated by the Executive to have been known by him/her prior to his/her employment by the Bank; (x) is or becomes generally available to the public through no act or omission of the Executive; (y) is obtained by the Executive in good faith from a third party who discloses such information to
the Executive on a non-confidential basis without violating any obligation of confidentiality or secrecy relating to the information disclosed; or (z) is independently developed by the Executive outside the scope of his/her employment without use of Confidential Information or Trade Secrets of the Company.  If the Executive is requested or becomes legally required or compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, or similar process) or is required by a governmental body to make any disclosure that is prohibited or otherwise constrained by this Agreement, the Executive will provide the Company with prompt written notice of such request so that it may seek an appropriate protective order or other appropriate remedy.  Subject to the foregoing, the Executive may furnish that portion (and only that portion) of the Trade Secret that the Executive is legally compelled or is otherwise required to
disclose.

 

(f)           Consequences of Failure to Abide By Covenants.  The Executive acknowledges that irreparable and incalculable injury will result to the Company, its business or properties, in the event of a breach by the Executive of any of the restrictions set forth in this Section 3.  The Executive therefore agrees that, in the event of any such actual, impending or threatened breach, the Company will be entitled, in addition to any other remedies, to temporary and permanent injunctive relief (without the necessity of posting a bond or other security) restraining the violation or further violation of such restrictions by the Executive.  In addition, the Company shall be entitled to stop all payments, including the payment of a portion of the Executive’s COBRA insurance premiums, to
which the Executive is otherwise entitled under Section 1 hereof.  The election of any one or more remedies by the Company shall not constitute a waiver of the right to pursue other available remedies.  The Executive further acknowledge that: (a) the Executive will be able to earn a livelihood without violating the foregoing restrictions, (b) the covenants and restrictions set forth in this Section 3 are necessary to protect the legitimate business interests of the Company and (c) the Executive’s compliance with the terms of Section 3 are material terms.

 

4.                     Return of Property.  All memoranda, notes, records, other documents, customer lists, software, computer files, and equipment, and all copies thereof, relating to the operations or business of the Company, some of which may be prepared by the Executive, and all objects associated therewith in any way obtained by the Executive in connection with the performance of Executive’s duties for the Company, shall be the exclusive property of the Company.  The Executive shall not copy or duplicate any of the aforementioned, nor use any information concerning them other than in accordance with the performance of the Executive’s duties for the Company.  The Executive will, no later than ten days after the termination of the
Executive’s employment (or earlier, at the Company’s written request), (a) deliver the original and all copies of all of the aforementioned that may be in the Executive’s possession to the Bank and (b) delete any such information on the Executive’s home or laptop computer.

 

	
 
  	
5.
 	
Miscellaneous Provisions.
 

 

(a)        Successors of the Bank.  If the Bank sells, assigns or transfers all or substantially all of its business and assets to any entity other than an entity more than 50% of the voting securities of which are owned by the Parent (any such event, a “Sale of Business”), then the Bank shall assign all of its right, title and interest in this Agreement as of the date of such event to such entity, and the Bank shall cause such entity, by written agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and agree to perform from and after the date of such assignment all of the terms, conditions and provisions imposed by this Agreement upon the Bank.  In case of (i) such assignment by the Bank and of assumption and agreement by such entity or
(ii) if the Bank merges into or consolidates or otherwise combines (where the Bank does not survive such combination) with any Person, as used in this Agreement, “Bank” shall thereafter mean such entity which executes and delivers the agreement provided for in this Section 5(a) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law, and this Agreement shall inure to the benefit of, and be enforceable by, such entity.

 

(b)        Executive’s Heirs, etc.  The Executive may not assign the Executive’s rights or delegate the Executive’s duties or obligations hereunder without the written consent of the Bank.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Executive should die while any amounts would still be payable to the Executive hereunder as if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s surviving spouse or, if there be no surviving spouse, to the Executive’s Estate.

 

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(c)        Notices.  Any notice or communication required or permitted under the terms of this Agreement shall be in writing and shall be delivered personally, or sent by certified mail, return receipt requested, postage prepaid, or sent by nationally recognized overnight carrier, postage prepaid, or sent by facsimile transmission to the Bank at the Bank’s principal office in Sturgeon Bay, Wisconsin or to the Executive at the address and facsimile number, if any, appearing on the books and records of the Bank.  Such notice or communication shall be deemed given (a) when delivered if personally delivered; (b) five (5) mailing days after having been placed in the mail, if the return receipt is received back by the Bank (c) the
business day after having been placed with a nationally recognized overnight carrier, if evidence of delivery is obtained, and (d) the business day after transmittal when transmitted with electronic confirmation of receipt, if transmitted by facsimile.  Any party may change the address or facsimile number to which notices or communications are to be sent to it by giving notice of such change in the manner herein provided for giving notice.  Until changed by notice, the following shall be the address and facsimile number to which notices shall be sent:

 

	
 
  	
If to the Bank, to:
 	
Baylake Bank
Attn: Human Resources
217 N. 4th Avenue
Sturgeon Bay, WI 54235
(Fax) 920-746-6989
 

 

	
 
  	
If to the Executive, to:
 	
______________________
[Address]
 

 

(d)        Amendment or Waiver.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer as may be specifically designated by the Board of Directors of the Bank (which shall not include the Executive).  No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are
not set forth expressly in this Agreement.

 

(e)        Invalid Provisions.  Should any portion of this Agreement be adjudged or held to be invalid, unenforceable or void, such holding shall not have the effect of invalidating or voiding the remainder of this Agreement and the parties hereby agree that the portion so held invalid, unenforceable or void shall if possible, be deemed amended or reduced in scope, or otherwise be stricken from this Agreement to the extent required for the purposes of validity and enforcement thereof.

 

(g)        Survival of the Executive’s Obligations.  The Executive’s obligations under this Agreement shall survive if Executive receives the cash compensation set forth in Section 1 hereof.

 

(h)        Governing Law. This Agreement and any action or proceeding related to it shall be governed by and construed under the laws of the State of Wisconsin, without regard to their conflict of laws provisions. 

 

(i)        Withholding, etc.  The Bank shall be entitled to withhold from amounts to be paid to the Executive hereunder any federal and state income and employment taxes which it is from time to time required to withhold.  Any amounts payable hereunder shall not count as compensation for purposes of any qualified or nonqualified retirement benefit plan of the Bank or the Parent.

 

(j)         Not an Employment Contract.  This agreement is not a contract for employment.  It does not give the Executive any right to continue as an employee of the Bank and does not prevent the Bank from terminating the Executive’s employment with the Bank at any time whatsoever.

 

IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have signed this Agreement.

 

	
 
 	
 
 	
Baylake Bank
 
	
 
 	
 
 	
 
 	
 
 
	
 
 	
 
 	
By:  
 	
 
 
	
[Name of Executive]
 	
 
 	
 
 	
 
 
	
 
 	
 
 	
Title:
 	
 
 

 

 

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EXHIBIT A

 

Definitions

 

1.                  “Cause” means a termination evidenced by a resolution adopted in good faith by a majority of the members of the Board of Directors of the Bank (excluding the Executive if he then serves on the Board) that the Executive has (i) committed any act of fraud, embezzlement or theft in connection with the Executive’s duties or in the course of employment with the Bank and/or its parent or subsidiaries; (ii) willfully and continually failed to perform substantially the Executive’s duties with the Bank and/or its parent or subsidiaries (other than any such failure resulting from incapacity due to physical or mental illness or injury, regardless of whether such illness or injury is job-related) for an appropriate period, which shall not be less than 30 days, after
 the Chief Executive Officer of the Bank (or, if the Executive is then Chief Executive Officer, the Board) has delivered a written demand for performance to the Executive that specifically identifies the manner in which the Chief Executive Officer (or the Board, as the case may be) believes the Executive has not substantially performed the Executive’s duties; (iii) willfully engaged in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Bank; (iv) willfully and wrongfully disclosed any Trade Secret or other Confidential Information of the Bank and/or any of its parent or subsidiaries, as defined in Sections 3(e) and 3(d), respectively, of the Agreement or otherwise violates any of the provisions of Section 3 thereof.  For purposes of this provision, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the
 Executive’s action or omission was in the best interests of the Bank.

	
 
 	
2.
 	
“Change of Control” shall mean any of the following:
 

 (a)  The acquisition by any individual, entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either (A) the then outstanding shares of common stock of the Parent (the “Outstanding Parent Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Parent entitled to vote generally in the election of directors (the “Outstanding Parent Voting Securities”); provided, however, that the following acquisitions of common stock shall not constitute a Change of Control:  (A) any acquisition directly from the
Parent (excluding an acquisition by virtue of the exercise of a conversion privilege or by one person or a group of persons acting in concert), (B) any acquisition by the Parent, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent or any corporation controlled by the Parent or (D) any acquisition by any corporation pursuant to a reorganization, merger, statutory share exchange or consolidation which would not be a Change of Control under paragraph (iii) of this Section 2; or

(ii)  Individuals who, as of the date hereof, constitute the Board of Directors of the Parent (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Parent’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened “election contest” or other actual or threatened “solicitation” (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) of proxies or
consents by or on behalf of a person other than the Incumbent Board; or

(iii)  Consummation of a reorganization, merger, statutory share exchange or consolidation, unless, following such reorganization, merger, statutory share exchange or consolidation, (A) more than 50% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, statutory share exchange or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Common Stock and Outstanding Parent Voting Securities immediately prior to such reorganization, merger, statutory share exchange or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger, statutory share exchange or consolidation, (B) no person (excluding the Parent, any employee benefit plan (or related trust) of the Parent or such corporation resulting from such reorganization, merger, statutory share exchange or consolidation and any person beneficially owning, immediately prior to such reorganization, merger, statutory share exchange or consolidation, directly or indirectly, more than 50% of the Outstanding Parent Common Stock or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, statutory share exchange or consolidation or the combined voting power of the then outstanding voting securities of such corporation, entitled to vote generally in the election of directors and (C) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger, statutory share exchange or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

 

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(iv)  Consummation of (A) a complete liquidation or dissolution of the Parent or (B) the sale or other disposition of all or substantially all of the assets of the Parent, other than to a corporation, with respect to which following such sale or other disposition, (1) more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Common Stock and Outstanding Parent Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior
to such sale or other disposition, of the Outstanding Parent Common Stock and Outstanding Parent Voting Securities, as the case may be, (2) no person (excluding the Parent and any employee benefit plan (or related trust) of the Parent or such corporation and any person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, more than 50% of the Outstanding Parent Common Stock or Outstanding Parent Voting Securities, as the case may be) beneficially owns, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or
other disposition of assets of the Parent.

3.                  Good Reason.  The Executive may terminate his employment for Good Reason by (a) giving written notice to the Bank of the existence of one or more of the events or conditions described below, no later than 90 days following their initial existence, but only if (b)  the Bank has not remedied the events or conditions giving rise to the Executive’s notice within 30 days thereafter.  For purposes of this Agreement, “Good Reason” shall mean the occurrence of one or more of the events or conditions described in subsections (i) through (iv), below:

(i)  A material reduction in the Executive’s authority, duties or responsibilities without the Executive’s express written consent;

(ii)  A reduction in the Executive’s base salary;

(iii)  Any action or inaction by the Bank that constitutes a  material breach of the provisions of the Agreement;

(iv)  The Bank requiring the Executive to be based anywhere other than Sturgeon Bay, Wisconsin or Green Bay, Wisconsin except for required travel on the Bank’s business to an extent substantially consistent with the Executive’s present business travel obligations without the Executive’s express written consent.

 

4.                  Termination of Employment.  For all purposes of the Agreement, the determination of whether Executive’s employment has terminated will be made in accordance with Treas. Reg. §1.409A-1(h)(1)(ii), as the same may be amended from time to time, promulgated under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

 

 

6Exhibit 10.1

             

            INVESCO LTD.

            EXECUTIVE INCENTIVE BONUS PLAN

             

            
                	
                            1.

                        	
                            Purpose

                        

            

            The purpose of the Plan is to establish a program of incentive compensation for designated officers and/or key employees of the Company that is directly related to the performance results of the Company and such employees. The Plan provides annual incentives, contingent upon meeting certain performance goals, to certain officers and/or key employees who make substantial contributions
            to the Company.

            
                	
                            2.

                        	
                            Definitions

                        

            

            
                	
                             

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

                        

            

             

            “162(m) Bonus Award” means a Bonus Award which is intended to qualify for the performance-based compensation exception to Section 162(m) of the Code, as further described in Section 7 hereof.

            “Board” means the Board of Directors of Invesco Ltd.

            “Bonus Award” means the award, as determined by the Committee, to be granted to a Participant based on that Participant’s level of attainment of his or her goals established in accordance with Sections 4, 5, 6 and 7, as applicable.

            “Change in Control” has the meaning set forth in the Invesco Ltd. 2008 Equity Incentive Plan.

            “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

            “Committee” means either (i) the Board or (ii) a committee selected by the Board to administer the Plan and composed of not less than two directors, each of whom is an “outside director” (within the meaning of Section 162(m) of the Code). If at any time such a Committee has not been so designated, the Compensation Committee of the
            Board shall constitute the Committee or if there shall be no Compensation Committee of the Board, the Board shall constitute the Committee.

            “Company” means Invesco Ltd. and each of its subsidiaries and affiliates.

            “Designated Beneficiary” means the beneficiary or beneficiaries designated to receive the amount, if any, payable under the Plan upon the Participant’s death.

            “Individual Target Award” means the targeted performance award for a Performance Period specified by the Committee.

            “Participant” means any officer or key employee designated by the Committee to participate in the Plan.

            

            

            

            “Performance Criteria” means objective performance criteria established by the Committee (which satisfies the requirements of Section 7(b)), in its sole discretion, with respect to 162(m) Bonus Awards. Performance Criteria shall be measured in terms of one or more of the following objectives, which objectives may relate to Company-wide
            objectives or of the subsidiary, division, department or function of the Company: operating revenues, annual revenues, net revenues, clients’ assets under management (“AUM”), gross sales, net sales, net asset flows, revenue weighted net asset flows, cross selling of investment products across regions and distribution channels, investment performance by account or weighted by AUM (relative and absolute performance), investment performance ratings as measured by
            recognized third parties, risk adjusted investment performance, (information ratio, sharpe ratio), expense efficiency ratios, expense management, operating margin and net operating margin, net revenue yield on AUM, client redemption rates and new account wins and size of pipeline, market share, customer service measures or indices, success of new product launches as measured by revenues, asset flows, AUM and investment performance, profit margin, operating profit margin, earnings
            (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization), earnings per share, diluted earnings per share growth, operating income, pre- or after-tax income, net income, free cash flow (operating cash flow less capital expenditures), cash flow per share, return on equity (or return on equity adjusted for goodwill), return on capital (including return on total capital or return on invested capital), return
            on investment, share price appreciation, total shareholder return (measured in terms of share price appreciation and dividend growth), cost control, business expansion or consolidation, diversification of AUM by investment objectives, growth in global position (AUM domiciled outside of United States), diversified distribution channels, successful integration of acquisitions, market value of a business or group based on independent third-party valuation or change in working
            capital.

             

            “Performance Period” means the period during which performance is to be measured to determine the level of attainment of a Bonus Award.

            “Plan” means this Invesco Ltd. Executive Incentive Bonus Plan.

            
                	
                            3.

                        	
                            Eligibility

                        

            

            Participants in the Plan shall be selected by the Committee for each Performance Period from those officers and key employees of the Company whose efforts contribute materially to the success of the Company. No employee shall be a Participant unless he or she is selected by the Committee, in its sole discretion. No employee shall at any time have the right to be selected as a
            Participant nor, having been selected as a Participant for one Performance Period, to be selected as a Participant in any other Performance Period.

            
                	
                            4.

                        	
                            Administration

                        

            

            The Committee, in its sole discretion, will determine eligibility for participation, establish the maximum award which may be earned by each Participant (which may be expressed in terms of a dollar amount, percentage of base pay or total pay (excluding payments made under this Plan), an amount determined pursuant to an objective formula or standard or any other measurement),
            establish goals for each Participant (which may be objective or subjective, and

             

            -2-

            

            

            

            based on individual, Company, subsidiary and/or division performance), calculate and determine each Participant’s level of attainment of such goals, and calculate the Bonus Award for each Participant based upon such level of attainment.

            Except as otherwise herein expressly provided, full power and authority to construe, interpret and administer the Plan shall be vested in the Committee, including the power to amend or terminate the Plan as set forth in Section 15 hereof. The Committee may at any time adopt such rules, regulations, policies or practices as, in its sole discretion, it shall determine to be necessary
            or appropriate for the administration of, or the performance of its respective responsibilities under, the Plan. The Committee may at any time amend, modify, suspend or terminate such rules, regulations, policies or practices.

            The Committee shall adjust the performance goals applicable to any Bonus Awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations and the cumulative effects of accounting or tax changes, each as defined by generally accepted accounting principles or as identified in the Company’s financial
            statements, notes to the financial statements, management’s discussion and analysis or other Company filings with the Securities and Exchange Commission; provided, however, that no such modification shall be made if the effect would be to cause a 162(m) Bonus Award to fail to qualify for the performance-based compensation exception to Section 162(m) of the Code. If the Committee determines that a change in the business,
            operations, corporate structure or capital structure of the Company or the applicable subsidiary, division, department or function of the Company, the manner in which it conducts its business or other events or circumstances render the Performance Criteria to be unsuitable, the Committee may modify such Performance Criteria or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable; provided,
            however, that no such modification shall be made if the effect would be to cause a 162(m) Bonus Award to fail to qualify for the performance-based compensation exception to Section 162(m) of the Code.

            
                	
                            5.

                        	
                            Bonus Awards

                        

            

            For each Participant for each Performance Period, the Committee may specify an Individual Target Award. The Individual Target Award may be expressed, at the Committee’s discretion, as a fixed dollar amount, a percentage of base pay or total pay (excluding payments made under this Plan) or an amount determined pursuant to an objective formula or standard. Establishment of an
            Individual Target Award for an employee for a Performance Period shall not imply or require that the same level Individual Target Award (if any such award is established by the Committee for the relevant Participant) be set for any subsequent Performance Period. At the time the performance goals are established, the Committee shall specify the Performance Criteria to be achieved, a minimum acceptable level of achievement below which no payment or award will be made and, to the
            extent relevant, a formula for determining the amount of any payment or award to be made if performance is at or above the minimum acceptable level but falls short of full achievement of the specified Performance Criteria.

            Notwithstanding any other provision to the contrary herein, the Committee may, in its sole and absolute discretion, elect to pay a Participant an amount that is less than the

             

            -3-

            

            

            

            Participant’s Individual Target Award (or attained percentage thereof) regardless of the degree of attainment of the Performance Criteria.

            
                	
                            6.

                        	
                            Payment of Bonus Awards

                        

            

            Bonus Awards earned during any Performance Period shall be paid as soon as practicable following the end of such Performance Period and the determination of the amount thereof shall be made by the Committee. It is intended that a Bonus Award will be paid no later than the fifteenth (15th) day of the third month following the later of: (a) the end of the Participant’s
            taxable year in which the requirements for such Bonus Award have been satisfied by the Participant or (b) the end of the Company’s fiscal year in which the requirements for such Bonus Award have been satisfied by the Participant. Payment of Bonus Awards shall be made in the form of cash, common shares of the Company or equity awards in respect of Company common shares, which common shares or equity awards may be subject to additional vesting provisions as determined by the
            Committee. Any common shares or equity awards granted in satisfaction of a Bonus Award will be granted under the Company’s equity incentive plan(s) as in effect from time to time. Bonus Award amounts earned but unpaid will not accrue interest. The Committee may at its option establish procedures pursuant to which Participants are permitted to defer the receipt of Bonus Awards payable hereunder.

            
                	
                            7.

                        	
                            162(m) Bonus Awards

                        

            

            Unless determined otherwise by the Committee, each Bonus Award awarded under the Plan shall be a 162(m) Bonus Award and will be subject to the following requirements, notwithstanding any other provision of the Plan to the contrary:

            
                	
                             

                        	
                            (a)

                        	
                            No 162(m) Bonus Award may be paid unless and until the shareholders of the Company have approved this Plan in a manner which complies with the shareholder approval requirements of Section 162(m) of the Code.

                        

            

            
                	
                             

                        	
                            (b)

                        	
                            A 162(m) Bonus Award may be made only by a Committee which is comprised solely of not less than two directors, each of whom is an “outside director” (within the meaning of Section 162(m) of the Code).

                        

            

            
                	
                             

                        	
                            (c)

                        	
                            The performance goals to which a 162(m) Bonus Award is subject must be based solely on Performance Criteria and the outcome of the Performance Criteria must be substantially uncertain at the time the Committee establishes the Performance Criteria. Such performance goals, and the maximum, target and/or threshold (as applicable) Bonus Amount payable upon
                            attainment thereof, must be established by the Committee within the time limits required in order for the 162(m) Bonus Award to qualify for the performance-based compensation exception to Section 162(m) of the Code.

                        

            

            
                	
                             

                        	
                            (d)

                        	
                            No 162(m) Bonus Award may be paid until the Committee has certified the level of attainment of the applicable Performance Criteria.

                        

            

             

            -4-

            

            

            

            
                	
                             

                        	
                            (e)

                        	
                            The maximum amount of a 162(m) Bonus Award is $50 million to a single Participant during any calendar year and the Performance Period for a 162(m) Bonus Award shall be the Company’s fiscal year (or such longer period as determined by the Committee).

                        

            

            
                	
                            8.

                        	
                            Termination of Employment

                        

            

            Unless otherwise specified by the Committee, to be eligible to receive a payment of a Bonus Award with respect to a Performance Period, a Participant must be employed by the Company on the last day of such Performance Period and on the date that the Bonus Award is paid, and must satisfy such other requirements as may be imposed by the Committee. Notwithstanding the foregoing, the
            Committee, in its sole discretion, may provide, to the extent permitted under Section 162(m) of the Code, that in the case of a Participant’s death, disability or a Change in Control of the Company during the Performance Period (or such other termination situations as permitted under Section 162(m) of the Code), Committee may pay a Bonus Award either during or after the Performance Period without regard to actual achievement of the performance goals. In the event of a
            Participant’s death prior to the payment of a Bonus Award which has been earned, such payment shall be made to the Participant’s Designated Beneficiary or, if there is none living, to the estate of the Participant.

            
                	
                            9.

                        	
                            Successors

                        

            

            The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and businesses of the Company.

            
                	
                            10.

                        	
                            Non-Alienation of Benefits

                        

            

            A Participant may not assign, sell, encumber, transfer or otherwise dispose of any rights or interests under the Plan except by will or the laws of descent and distribution. Any attempted disposition in contravention of the preceding sentence shall be null and void.

            
                	
                            11.

                        	
                            No Claim or Right to Plan Participation

                        

            

            No employee or other person shall have any claim or right to be selected as a Participant under the Plan. Neither the Plan nor any action taken pursuant to the Plan shall be construed as giving any employee any right to be retained in the employ of the Company.

            
                	
                            12.

                        	
                            Taxes

                        

            

            The Company shall deduct from all amounts paid under the Plan all federal, state, local and other taxes required by law to be withheld with respect to such payments.

            
                	
                            13.

                        	
                            Payments to Persons Other Than the Participant

                        

            

            If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of incapacity, illness or accident, or is a

             

            -5-

            

            

            

            minor, or has died, then any payment due to such person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs, be paid to his or her spouse, a child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee, in its sole discretion, to be a proper recipient on
            behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Company therefor.

            
                	
                            14.

                        	
                            No Liability of Committee Members

                        

            

            No member of the Committee shall be personally liable by reason of any contract or other instrument related to the Plan executed by such member or on his or her behalf in his or her capacity as a member of the Committee, nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each employee, officer or director of the Company to whom any
            duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including legal fees, disbursements and other related charges) or liability (including any sum paid in settlement of a claim with the approval of the Board) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud, dishonesty or bad faith.

            
                	
                            15.

                        	
                            Termination or Amendment of the Plan

                        

            

            The Committee may amend, suspend or terminate the Plan at any time; provided that no amendment may be made without the approval of the Company’s shareholders if the effect of such amendment would be to cause outstanding or pending 162(m) Bonus Awards to cease to qualify for the performance-based compensation exception to
            Section 162(m) of the Code.

            
                	
                            16.

                        	
                            Unfunded Plan

                        

            

            Participants shall have no right, title or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, Designated
            Beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly
            set forth in the Plan.

            The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

            
                	
                            17.

                        	
                            Governing Law

                        

            

            The terms of the Plan and all rights thereunder shall be governed by and construed in accordance with the laws of the State of Georgia, without reference to principles of conflict of laws.

             

            -6-

            

            

            

            
                	
                            18.

                        	
                            Effective Date

                        

            

            The Plan is effective as of January 1, 2008, subject to approval of the shareholders as required by Section 162(m) of the Code.

             

            -7-

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