Document:

exhibit101.htm

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

STATE OF CALIFORNIA

DEPARTMENT OF FINANCIAL INSTITUTIONS

SACRAMENTO, CALIFORNIA

	
 

Written Agreement by and among

 

PACIFIC STATE BANCORP

Stockton, California

 

PACIFIC STATE BANK

Stockton, California

 

FEDERAL RESERVE BANK OF

SAN FRANCISCO

San Francisco, California

 

and

 

STATE OF CALIFORNIA

DEPARTMENT OF FINANCIAL

INSTITUTIONS

Sacramento, California

 
	
 

 

        Docket Nos. 10-014-WA/RB-HC

                               10-014-WA/RB-SM

 

WHEREAS, in recognition of their common goal to maintain the financial soundness of Pacific State Bancorp, Stockton, California (“Bancorp”), a registered bank holding company, and its subsidiary bank, Pacific State Bank, Stockton, California (the “Bank”), a state chartered bank that is a member of the Federal Reserve
System, Bancorp, the Bank, the Federal Reserve Bank of San Francisco (the “Reserve Bank”), and the State of California Department of Financial Institutions (the “Department”) have mutually agreed to enter into this Written Agreement (the “Agreement”); and

 

WHEREAS, on February 18, 2010, Bancorp’s and the Bank’s boards of directors, at duly constituted meetings, adopted resolutions authorizing and directing Ricky D. Simas to consent to this Agreement on behalf of Bancorp and the Bank, respectively, and consenting to compliance with each and every applicable provision of this Agreement
by Bancorp, the Bank, and their institution-affiliated parties, as defined in sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C. §§ 1813(u) and 1818(b)(3)).

 

NOW, THEREFORE, Bancorp, the Bank, the Reserve Bank, and the Department agree as follows:

Credit Risk Management

1.   Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the Department an acceptable written plan to strengthen credit risk management practices.  The plan shall,
at a minimum, address, consider, and include:

      (a)   Procedures to periodically review and revise risk exposure limits to address changes in market conditions and strategies
to minimize credit losses;

 

      (b)    procedures to identify, limit, and manage concentrations of credit that are consistent with the Interagency
Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices, dated December 12, 2006 (SR 07-1);

   

      (c)   strategies to minimize credit losses and reduce the level of problem assets; and

 

      (d)   enhanced portfolio-wide stress testing.

 

 

 

 

 

Asset Improvement

2.   The Bank shall not, directly or indirectly, extend, renew, or restructure any credit to or for the benefit of any borrower, including any related interest of the borrower, whose loans or other extensions
of credit are criticized in the report of the examination of the Bank conducted by the Reserve Bank that commenced on June 29, 2009 (the “Report of Examination”) or in any subsequent report of examination, without the prior approval of a majority of the full board of directors or a designated committee thereof.  The board of directors or its committee shall document in writing the reasons for the extension of credit, renewal, or restructuring, specifically certifying that: (i) the Bank’s
risk management policies and practices for loan workout activity are acceptable; (ii) the extension of credit is necessary to improve and protect the Bank’s interest in the ultimate collection of the credit already granted and maximize its potential for collection; (iii) the extension of credit reflects prudent underwriting based on reasonable repayment terms and is adequately secured; and all necessary loan documentation has been properly and accurately prepared and filed; (iv) the Bank has performed a
comprehensive credit analysis indicating that the borrower has the willingness and ability to repay the debt as supported by an adequate workout plan, as necessary; and (v) the board of directors or its designated committee reasonably believes that the extension of credit will not impair the Bank’s interest in obtaining repayment of the already outstanding credit and that the extension of credit or renewal will be repaid according to its terms.  The written certification shall be made a part of
the minutes of the meetings of the board of directors or its committee, as appropriate, and a copy of the signed certification, together with the credit analysis and related information that was used in the determination, shall be retained by the Bank in the borrower’s credit file for subsequent supervisory review.  For purposes of this Agreement, the term “related interest” is defined as set forth in section 215.2(n) of Regulation O of the Board of Governors of the Federal Reserve
System (the “Board of Governors”) (12 C.F.R. § 215.2(n)).

 

3.   (a)    Within 60 days of this Agreement, the Bank shall submit to the Reserve
Bank and the Department an acceptable written plan designed to improve the Bank’s position through repayment, amortization, liquidation, additional collateral, or other means on each loan or other asset in excess of $500,000, including other real estate owned (“OREO”), that (i) is past due as to principal or interest more than 90 days as of the date of this Agreement; (ii) is on the Bank’s problem loan list; or (iii) was adversely classified in the Report of Examination.  In
developing the plan for each loan, the Bank shall, at a minimum, review, analyze, and document the financial position of the borrower, including source of repayment, repayment ability, and alternative repayment sources, as well as the value and accessibility of any pledged or assigned collateral, and any possible actions to improve the Bank’s collateral position.

          

      (b)           Within 30 days of the date that any additional loan or other asset in excess of $500,000, including OREO, becomes past due as to principal or interest for more than 90 days, is on the Bank’s problem
loan list, or is adversely classified in any subsequent report of examination of the Bank, the Bank shall submit to the Reserve Bank and the Department an acceptable written plan to improve the Bank’s position on such loan or asset.

   

   (c)           Within 30 days after the end of each calendar quarter thereafter, the Bank shall submit a written progress report to the Reserve Bank and the Department to update each asset improvement plan, which shall include, at a minimum, the carrying value of the loan or other asset and changes in the nature and value
of supporting collateral, along with a copy of the Bank’s current problem loan list, extension report, and past due/non-accrual report.  The board of directors shall review the progress reports before submission to the Reserve Bank and the Department and shall document the review in the minutes of the board of directors’ meetings.

 

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Allowance for Loan and Lease Losses

 

4.   (a)           The Bank shall, within 30 days from the receipt of any federal or state report of examination, charge off all assets classified “loss” unless otherwise
approved in writing by the Reserve Bank and the Department.

      

      (b)           The Bank shall maintain a sound process for determining, documenting, and recording an adequate ALLL in accordance with regulatory reporting instructions and relevant supervisory guidance, including the Interagency Policy Statements on the
Allowance for Loan and Lease Losses, dated July 2, 2001 (SR 01-17 (Sup)) and December 13, 2006 (SR 06-17).

 

      (c)           Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the Department an acceptable written program for the maintenance of an adequate ALLL.  The program
shall include policies and procedures to ensure adherence to the ALLL methodology and provide for periodic reviews and updates to the ALLL methodology, as appropriate.  The program shall also provide for a review of the ALLL by the board of directors on at least a quarterly calendar basis.  Any deficiency found in the ALLL shall be remedied in the quarter it is discovered, prior to the filing of the Consolidated Reports of Condition and Income, by additional provisions.  The board
of directors shall maintain written documentation of its review, including the factors considered and conclusions reached by the Bank in determining the adequacy of the ALLL.  During the term of this Agreement, the Bank shall submit to the Reserve Bank and the Department, within 30 days after the end of each calendar quarter, a written report regarding the board of directors’ quarterly review of the ALLL and a description of any changes to the methodology used in determining the amount of ALLL
for that quarter.

Capital Plan

 

5.   Within 60 days of this Agreement, Bancorp and the Bank shall submit to the Reserve Bank and the Department an acceptable joint written plan to maintain sufficient capital at the Bank.  The
plan shall, at a minimum, address, consider, and include:

 

      (a)   The Bank’s current and future capital requirements, including compliance with the Capital Adequacy Guidelines
for State Member Banks:  Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and B of Regulation H of the Board of Governors (12 C.F.R. Part 208, App. A and B);

 

      (b)   the adequacy of the Bank’s capital, taking into account the volume of classified credits, concentrations of
credit, ALLL, current and projected asset growth, and projected retained earnings;

 

      (c)   the source and timing of additional funds to fulfill the Bank’s future capital requirements; and

 

      (d)   the requirements of section 225.4(a) of Regulation Y of the Board of Governors (12 C.F.R. § 225.4(a)) that Bancorp
serve as a source of strength to the Bank.

 

6.    Bancorp and the Bank shall notify the Reserve Bank and the Department, in writing, no more than 30 days after the end of any quarter
in which any of the Bank’s capital ratios (total risk-based, Tier 1, or leverage) fall below the approved capital plan’s minimum ratios.  Together with the notification, Bancorp and the Bank shall submit an acceptable written plan that details the steps Bancorp and the Bank will take to increase the Bank’s capital ratios to or above the approved capital plan’s minimums.

 

-3-

 

 

Earnings Plan and Budget

7.   (a)    Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the Department a written business plan
for 2010 to improve the Bank’s earnings and overall condition.  The plan, at a minimum, shall provide for or describe:

 

	
(i)  
	
a realistic and comprehensive budget for calendar year 2010, including income statement and balance sheet projections; and

 

	
(ii)  
	
a description of the operating assumptions that form the basis for, and adequately support, major projected income, expense, and balance sheet components.

 

       (b)          A business plan and budget for each calendar year subsequent to 2010 shall be submitted to the Reserve Bank and the Department at least 30 days prior to the beginning of that calendar year.

Liquidity/Funds Management

8.   Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the Department an acceptable written plan designed to improve management of the Bank’s liquidity position and funds
management practices.  The plan shall, at a minimum, address, consider, and include:

 

      (a)   Measures to enhance the monitoring and measurement of the Bank’s liquidity;

 

      (b)   a timetable to reduce reliance on short-term wholesale funding, including brokered deposits; and

 

      (c)   specific liquidity targets and parameters and the maintenance of sufficient liquidity to meet contractual obligations
and unanticipated demands.

 

 

-4-

 

 

Dividends

9.   (a)           Bancorp and the Bank shall not declare or pay any dividends without the prior written approval of the Reserve Bank, the Director
of the Division of Banking Supervision and Regulation of the Board of Governors (the “Director”), and the Department.

 

       (b)           Bancorp shall not take any other form of payment representing a reduction in capital from the Bank without the prior written approval of the Reserve Bank and the Department.

 

       (c)   Bancorp and its nonbank subsidiaries shall not make any distributions of interest, principal, or other sums
on subordinated debentures or trust preferred securities without the prior written approval of the Reserve Bank, the Director, and the Department.

 

      (d)   All requests for prior approval shall be received at least 30 days prior to the proposed dividend declaration date,
proposed distribution on subordinated debentures, and required notice of deferral on trust preferred securities.  All requests shall contain, at a minimum, current and projected information, as appropriate, on Bancorp’s capital, earnings, and cash flow; the Bank’s capital, asset quality, earnings and ALLL needs; and identification of the sources of funds for the proposed payment or distribution.  Bancorp and the Bank, as appropriate, must also demonstrate that the requested declaration
or payment of dividends is consistent with the Board of Governors’ Policy Statement on the Payment of Cash Dividends by State Member Banks and Bank Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).

Debt and Stock Redemption

 

10.    (a)           Bancorp shall not, directly or indirectly, incur, increase, or guarantee any debt without the prior written approval of the Reserve Bank and the Department.  All
requests for prior written approval shall contain, but not be limited to, a statement regarding the purpose of the debt, the terms of the debt, and the planned source(s) for debt repayment, and an analysis of the cash flow resources available to meet such debt repayment.

 

     (b)           Bancorp shall not, directly or indirectly, purchase or redeem any shares of its stock without the prior written approval of the Reserve Bank and the Department.

 

-5-

 

 

Compliance with Laws and Regulations

 

11.  (a)           In appointing any new director or senior executive officer, or changing the responsibilities of any senior executive
officer so that the officer would assume a different senior executive officer position, Bancorp and the Bank shall comply with the notice provisions of section 32 of the FDI Act (12 U.S.C. § 1831i) and Subpart H of Regulation Y of the Board of Governors (12 C.F.R. §§ 225.71 et seq.) and also provide written notice to the Department.  Bancorp and the Bank shall not appoint any individual to Bancorp’s or the Bank’s board
of directors or employ or change the responsibilities of any individual as a senior executive officer if the Reserve Bank or the Department notifies Bancorp or the Bank of disapproval within the time limits prescribed by Subpart H of Regulation Y. 

 

    (b)           Bancorp and the Bank shall comply with the restrictions on indemnification and severance payments of section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit
Insurance Corporation’s regulations (12 C.F.R. Part 359).

Compliance with the Agreement

12.  (a)           Within 10 days of this Agreement, the boards of directors of Bancorp and the Bank shall appoint a joint committee (the “Compliance
Committee”) to monitor and coordinate Bancorp’s and the Bank’s compliance with the provisions of this Agreement.  The Compliance Committee shall include a majority of outside directors who are not executive officers or principal shareholders of Bancorp and the Bank, as defined in sections 215.2(e)(1) and 215.2(m)(1) of Regulation O of the Board of Governors (12 C.F.R. §§ 215.2(e)(1) and 215.2(m)(1)).  At a minimum, the Compliance Committee shall meet at least monthly,
keep detailed minutes of each meeting, and report its findings to the boards of directors of Bancorp and the Bank.

 

    (b)           Within 30 days after the end of each calendar quarter following the date of this Agreement, Bancorp and the Bank shall submit to the Reserve Bank and the Department written progress reports detailing
the form and manner of all actions taken to secure compliance with this Agreement and the results thereof.

Approval and Implementation of Plans and Program 

13.  (a)           The Bank and, as applicable, Bancorp shall submit written plans and a program that are acceptable to the Reserve Bank and the
Department within the applicable time periods set forth in paragraphs 1, 3, 4(c), 5, 6, and 8 of this Agreement.

 

    (b)           Within 10 days of approval by the Reserve Bank and the Department, the Bank shall adopt the approved plans and program.  Upon adoption, the Bank shall promptly implement the approved
plans and program, and thereafter fully comply with them.

 

    (c)           During the term of this Agreement, the approved plans and program shall not be amended or rescinded without the prior written approval of the Reserve Bank and the Department.

 

 

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Communications

14.              All communications regarding this Agreement shall be sent to:

(a)           Mr. Joe Lozano

Examining Officer

Banking Supervision & Regulation

Federal Reserve Bank of San Francisco

101 Market Street

Mail Stop  920

San Francisco, California  94105

 

(b)           Mr. Scott Cameron

Deputy Commissioner for Northern Region

State of California

Department of Financial Institutions

1810 13th Street

Sacramento, California  95811

                                 (c)   Mr. Harold Hand

Chairman of the Boards of Directors

Pacific State Bancorp

Pacific State Bank

1899 West March Lane

Stockton, California  95207

 

 

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Miscellaneous

 

15.              Notwithstanding any provision of this Agreement, the Reserve Bank and the Department may, in their sole discretion, grant written extensions of time to Bancorp and the Bank to comply with any provision of this Agreement.

 

16.              The provisions of this Agreement shall be binding upon Bancorp, the Bank, and their institution-affiliated parties, in their capacities as such, and their successors and assigns.

 

17.              Each provision of this Agreement shall remain effective and enforceable until stayed, modified, terminated, or suspended in writing by the Reserve Bank and the Department.

 

18.              The provisions of this Agreement shall not bar, estop, or otherwise prevent the Board of Governors, the Reserve Bank, the Department, or any other federal or state agency from taking any other action affecting Bancorp, the Bank, or any of their current
or former institution-affiliated parties and their successors and assigns.

 

19.              Pursuant to Section 50 of the FDI Act (12 U.S.C. § 1831aa), this Agreement is enforceable by the Board of Governors under Section 8 of the FDI Act (12 U.S.C. § 1818).

 

20.              If the Department determines that the Bank has violated any substantive provision of this Agreement, the Bank shall, for the purposes of the California Financial Code, be deemed to be conducting its business in an unsafe or unauthorized manner.

 

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of

the 18th day of February, 2010.

	
PACIFIC STATE BANCORP
	  	
FEDERAL RESERVE BANK OF

SAN FRANCISCO

 

 

	
By:  /S/ Ricky D. Simas
	  	
By:  /S/ Joe A. Lozano

	
              Ricky D. Simas

              President/CEO
	  	
              Joe A. Lozano

              Examining Officer

 

	
PACIFIC STATE BANK
	  	
STATE OF CALIFORNIA

DEPARTMENT OF FINANCIAL INSTITUTIONS

 

 

	
By:  /S/ Ricky D. Simas
	  	
By:  /S/ Scott D. Cameron

	              Ricky D. Simas
              President/CEO
	 	
              Scott D. Cameron

              Deputy Commissioner

  

-9-exhibit10_10.htm

     

    Exhibit 10.10

    
      PLATINUM
UNDERWRITERS HOLDINGS, LTD.

       

      SECTION
162(m) PERFORMANCE INCENTIVE PLAN

      

      as

      Amended
and Restated

      as
of

      February
22, 2010

       

      Section
1.                      Purpose

       

      The
purpose of this Platinum Underwriters Holdings, Ltd. Section 162(m) Performance
Incentive Plan is to provide a means of determining both annual and long-term
incentive compensation for certain of the Company’s executive officers in a
manner that qualifies as “performance-based compensation” within the meaning of
Section 162(m) of the Internal Revenue Code.

       

      Section
2.                      Definitions

       

      The
following capitalized words as used herein shall have the following
meanings:

       

      (a)           “Award” means any
award granted under the Plan to an Eligible Employee by the Committee subject to
such terms and conditions as the Committee may establish under the terms of the
Plan.

       

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

       

      (c)           “Cash-Based Award”
means any Award denominated by reference to a dollar amount.

       

      (d)           “Committee” means the
Compensation Committee of the Board (or such other committee of the Board that
the Board shall designate from time to time) or any subcommittee thereof
consisting of two or more directors each of whom is an “outside director” within
the meaning of Section 162(m).

       

      (e)           “Common Shares” means
the common shares of the Company, par value $0.01 per share.

       

      (f)           “Company” means
Platinum Underwriters Holdings, Ltd., a Bermuda company.

       

      (g)           “Eligible Employee”
means any employee or executive officer of the Company or any of its
subsidiaries who is or, in the opinion of the Committee, may become a “covered
employee” within the meaning of Section 162(m).

       

      (h)           “Fair Market Value” of
a Common Share as of a given date shall have the same meaning as applies under
the 2006 Share Incentive Plan or any successor plan.

       

      (i)           "GAAP" means
accounting principles generally accepted in the United States of America from
time to time.

       

      (j)           “Participant” means an
Eligible Employee granted an Award under the Plan.

       

      (k)           “Performance Criteria”
shall have the meaning set forth in Section 4(b) hereof.

       

      (l)           “Performance Goals”
shall have the meaning set forth in Section 4(c) hereof.

       

      (m)          “Performance Period”
means a period determined by the Committee of not more than five years over
which the Performance Goals set forth in the Award are to be
achieved.

       

      (n)           “Plan” means this
Platinum Underwriters Holdings, Ltd. Section 162(m) Performance Incentive Plan,
as it may be amended from time to time.

       

      (o)           “Restricted Shares”
means Common Shares that are issued subject to such restrictions on transfer and
other incidents of ownership and such forfeiture conditions as the Committee may
determine.

       

      (p)           “Share-Based Award”
means any Award denominated by reference to a number of Common Shares (including
Restricted Shares) and/or Share Units.

       

      (q)           “Share Incentive Plan”
means the Company’s 2006 Share Incentive Plan or any successor plan, as the same
may be amended from time to time.

       

      (r)           “Share Units” means a
non-voting unit of measurement based on the Fair Market Value of a Common Share,
which entitles a Participant to receive a payment of cash or Common Shares, as
determined by the Committee.

       

      (s)           “Section 162(m)” means
Section 162(m) of the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder.

       

      (t)           “Statutory Accounting
Principles” means statutory accounting principles or practices required
or permitted for financial reporting purposes by the National Association of
Insurance Commissioners and by the department of insurance (or similar
regulatory authority) of the jurisdiction of domicile of each insurance company
subsidiary of the Company.

       

      Section
3.                      Administration
of the Plan

       

      (a)           Committee
Members.  The Plan shall be administered by the
Committee.  The Committee shall have such powers and authority as may
be necessary or appropriate for the Committee to carry out its functions as
described in the Plan.  No member of the Committee shall be liable for
any action or determination made in good faith by the Committee with respect to
the Plan or any Award thereunder.

       

      (b)           Discretionary
Authority.  Subject to the express limitations of the Plan, the
Committee shall have authority in its discretion to determine the Eligible
Employees to whom, and the time or times at which, Awards may be granted,
whether an Award will be a Cash-Based Award or a Share-Based Award, the
Performance Period, the Performance Criteria and the Performance Goals, and all
other terms of the Award.  The Committee shall also have discretionary
authority to interpret the Plan, to make all factual determinations under the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan.  The Committee may prescribe, amend, and
rescind rules and regulations relating to the Plan.  All
interpretations, determinations, and actions by the Committee shall be final,
conclusive, and binding upon all parties.

       

      (c)           Delegation of
Authority.  The Committee may delegate, to any appropriate
officer or employee of the Company, responsibility for certain ministerial
functions (but not the exercise of discretion) under this Plan.

       

      Section
4.                      Awards

       

      (a)           Grant of
Awards.  The Committee may grant to any Eligible Employee
Cash-Based Awards and/or Share-Based Awards under the Plan with respect to one
or more Performance Periods under the Plan.  Performance Periods may
run consecutively and/or concurrently, as determined by the Committee. Before
the 90th day of the Performance Period, the Committee will determine the type of
the Award, the duration of the Performance Period, the Performance Criteria, the
applicable Performance Goals relating to the Performance Criteria, and the
amount and terms of payment to be made upon achievement of the Performance
Goals.

       

      (b)           Performance
Criteria.  For purposes of Awards granted under the Plan, the
“Performance Criteria” shall be one or any combination of the following, for the
Company or any identified subsidiary or business unit, as determined by the
Committee at the time of the Award:  net income, earnings per share,
operating income, book value per share, return on equity, stock price
performance, cash flow, and underwriting gain or loss.  Each of the
Performance Criteria shall be applied and interpreted in accordance with GAAP,
Statutory Accounting Principles, if applicable, or such other objective measure
as established by the Committee at the time of the Award.

       

      (c)           Performance Goals.
For purposes of Awards granted under the Plan, the “Performance Goals” shall be
the levels of achievement relating to the Performance Criteria selected by the
Committee for the Award.  The Performance Goals shall be expressed as
an objective formula or standard that precludes discretion to increase the
amount of compensation payable that would otherwise be due upon attainment of
the goal.  The Performance Goals may be applied on an absolute basis
or relative to an identified index or peer group, as specified by the Committee.
The Performance Goals may be applied by the Committee after excluding charges
for restructurings, discontinued operations, extraordinary items, and other
unusual or non-recurring items, and the cumulative effects of accounting
changes, each as determined in accordance with GAAP, Statutory Accounting
Principles, if applicable, or such other objective measure established by the
Committee at the time of the Award, provided the adjustments are specified at
the time the Award is established.

       

      (d)           Maximum
Awards.  The maximum amount that may become payable to any one
Participant during any one calendar year under all Cash-Based Awards is limited
to $3,000,000.  The maximum number of Common Shares (including
Restricted Shares) and/or Share Units that may be subject to all Share-Based
Awards granted to any one Participant during any one calendar year is limited to
100,000 Common Shares and/or Share Units.

       

      (e)           Negative
Discretion.  Notwithstanding anything else contained in the
Plan to the contrary, the Committee shall have the right, in its discretion, (i)
to reduce or eliminate the amount otherwise payable to any Participant under an
Award and (ii) to establish rules or procedures that have the effect of limiting
the amount payable to any Participant to an amount that is less than the maximum
amount otherwise payable under an Award.  The Committee shall not have
discretion to increase the amount that is otherwise payable to any Participant
under an Award.

       

      Section
5.                      Payment
of Awards

       

      (a)           Certification.  Following
the conclusion of the Performance Period of an Award, the Committee shall
certify in writing whether the Performance Goals for that Performance Period
have been achieved, or certify the degree of achievement, if
applicable.

       

      (b)           Payment. Upon
certification of the Performance Goals for a Cash-Based Award, the Committee
shall determine the amount of payment to the Participant pursuant to the Award,
if any.  Upon certification of the Performance Goals for a Share-Based
Award, the Committee shall determine the number of Common Shares, Restricted
Shares and/or Share Units payable to the Participant pursuant to the Award, if
any.  Notwithstanding the foregoing, both Cash-Based Awards and
Share-Based Awards may be paid in any combination of cash, Common Shares,
Restricted Shares and/or Share Units, as determined by the Committee in its
discretion, based upon the Fair Market Value of the Common Shares at the time of
payment.

       

      (c)           Share
Restrictions.  Any Common Shares, Restricted Shares or Share
Units payable in respect of an Award shall be subject to such terms, conditions,
restrictions and/or limitations as the Committee shall determine in its
discretion.  Any Common Shares that become payable under an Award
shall be paid from the Common Shares authorized under the Company’s 2006 Share
Incentive Plan or any successor plan, and shall be subject to the terms and
conditions of such plan.

       

      (d)           Employment
Requirement.  In the event of the termination of employment of
a Participant with the Company or a subsidiary before the payment of an Award,
the Award shall be forfeited and automatically be cancelled without further
action of the Company or the Committee, subject to such conditions as may be
approved by the Committee for certain circumstances of termination of
employment, such as death or disability, if approved by the Committee in its
sole discretion.

       

      (e)           Tax
Withholding.  Any payment under this Plan shall be subject to
applicable federal, state or local income and employment taxes and any other
amounts that the Company is required by law to deduct and withhold from such
payment.

       

      (f)           Deferral of
Payments.  The Committee may in its discretion grant an Award
that provides a Participant the opportunity to elect in writing to defer up to
100% of the payment of amounts payable under the Award, with the election to be
made in the manner specified by the Committee.  The Committee may in
its discretion provide for interest or other investment return on any such
deferred amounts.

       

      Section
6.                      General
Provisions

       

      (a)           Effective
Date.  Subject to the approval of the Company’s shareholders,
the Plan shall be effective with respect to calendar years beginning on or after
January 1, 2004.

       

      (b)           Amendment and
Termination.  The Company may, from time to time, by action of
the Board, amend, suspend or terminate any or all of the provisions of the Plan,
but no such amendment, suspension or termination shall adversely affect the
rights of any Participant with respect to Awards then
outstanding.  Notwithstanding the foregoing, no amendment will be
effective without shareholder approval if such approval is required to satisfy
the requirements of Section 162(m).  For purposes of Section 162(m),
the material terms of the performance goals under the Plan must generally be
re-approved by the shareholders no later than the first general meeting of
shareholders occurring in the fifth year following the year in which the
material terms were last approved.

       

      (c)           Other
Compensation.  Nothing contained in the Plan shall prohibit the
Company or any subsidiary from establishing other additional incentive
compensation arrangements for one or more employees of the Company or from
paying compensation outside of the terms of the Plan, whether or not such
compensation qualifies as performance-based compensation under Section
162(m).

       

      (d)           No Right to
Employment.  Nothing in the Plan shall be deemed to give any
Participant the right to remain employed by the Company or any subsidiary or to
limit, in any way, the right of the Company or any subsidiary to terminate, or
to change the terms of, a Participant’s employment at any time.

       

      (e)           Governing
Law.  The Plan shall be governed by and construed in accordance
with the laws of New York, without regard to choice-of-law rules.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}]]