Document:

unit-ex102_198.htm

Portions of this document have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed.  Redacted portions are indicated with the notation “[**]”.

 

Exhibit 10.2

 

Uniti Group Inc.
2019 SHORT-TERM incentive PLAN

 

This 2019 Short-Term Incentive Plan (this “Plan”) of Uniti Group Inc., a Maryland corporation (the “Corporation”), became effective on May 7, 2019 (the “Effective Date”).

 

Section 1.    Definitions.  The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context:

(a)“Award” means any Short-Term Incentive Bonus granted under this Plan.

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

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Committee” means the Compensation Committee of the Board which has been appointed to administer this Plan.  

(e)“Corporation” means Uniti Group Inc., a Maryland corporation, and any direct or indirect subsidiary thereof.

(f)“Eligible Officer” means an officer of the Corporation holding the positions set forth in Section 3 of this Plan.

(g)“Employee” means an individual who is an employee of the Corporation who is reported on the payroll records as a common‐law employee.

(h)“Plan” means this 2019 Short-Term Incentive Plan of the Corporation.

(i)“Short-Term Incentive Bonus” means the incentive compensation granted to an Eligible Officer pursuant to Section 4 of this Plan.

(j)“Subsidiary” means an entity at least 50% of the total combined voting power of all classes of stock which is owned by the Corporation, either directly or through one or more other Subsidiaries.

Section 2.    Administration.  This Plan will be administered by the Committee.  In addition to any other powers granted to the Committee, the Committee will have the following powers:

(a)to determine whether and to what extent Short-Term Incentive Bonuses are to be granted under this Plan to Eligible Officers;

(b)to determine whether the performance metrics required to receive Short‐Term Incentive Bonuses have been satisfied and to what extent they have been satisfied;

 

(c)to construe and interpret this Plan;

(d)to require, at the time Short‐Term Incentive Bonuses are to be paid, the making of any representations or agreements that the Committee may deem necessary or advisable in order for the Corporation to comply with the securities laws of the United States of America or of any state or any rule or regulation thereunder;

(e)to provide for satisfaction of an Eligible Officer’s tax liabilities arising in connection with this Plan; and

(f)to make all other determinations and take all other actions necessary or advisable for the administration of this Plan.

Any determinations or actions made or taken by the Committee pursuant to this Section 2 will be binding and final.

Section 3.    Eligibility.  The individuals holding the following executive officer positions of the Corporation on the Effective Date shall be eligible to receive Short‐Term Incentive Bonuses under this Plan:

(a)President and Chief Executive Officer

(b)Executive Vice President and Chief Financial Officer; and

(c)Executive Vice President and General Counsel.

Section 4.    Short‐Term Incentive Bonuses.  Short‐Term Incentive Bonuses shall be awarded to the Eligible Officers as set forth in this Section 4 and Exhibit A to this Plan.  Short-Term Incentive Bonuses shall be payable in cash upon the attainment of the criteria set forth on Exhibit A as the Committee shall determine, in its sole discretion.

Section 5.    Termination or Amendment.  The Committee or Board may amend or terminate this Plan in any respect at any time. Committee or Board approval must be accompanied by (a) stockholder approval in those cases in which amendment requires stockholder approval under applicable law or regulations or the requirements of the principal exchange or interdealer quotation system on which the shares of common stock of the Corporation are listed or quoted, and (b) affected Eligible Officer approval if the amendment or termination would adversely affect the holder’s rights under any outstanding grants or Awards.  The Short‐Term Incentive Bonus provisions may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Committee or the Board.  

Section 6.    Effectiveness of this Plan.  This Plan is effective as of the Effective Date which is the date of adoption of this Plan by the Committee.

Section 7.    Term of this Plan.  This Plan will terminate on the date all benefits anticipated by this Plan have been paid.

Section 8.    Indemnification of Committee.  In addition to such other rights of indemnification as they may have as directors of the Corporation or as members of the Committee, the members of the Committee will be indemnified by the Corporation against the reasonable expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with this Plan or any grant or Award hereunder, and 

 

against all amounts reasonably paid by them in settlement thereof or paid by them in satisfaction of a judgment in any such action, suit or proceeding, if such members acted in good faith and in a manner that they believed to be in, and not opposed to, the best interests of the Corporation.

Section 9.    General Provisions.  

(a)The establishment of this Plan will not confer upon any Eligible Officer or Employee, any legal or equitable right against the Corporation, any Subsidiary or the Committee, except as expressly provided in this Plan or an employment or other agreement of the Eligible Officer, if any.

(b)This Plan does not constitute inducement or consideration for the employment of any Employee, nor is it a contract of employment between the Corporation or any Subsidiary and any Employee.  Participation in this Plan, or the receipt of a grant or Award hereunder, will not give an Employee any right to be retained in the service of the Corporation or any Subsidiary.

(c)The interests of any Employee under this Plan are not subject to the claims of creditors and may not, in any way, be assigned, alienated or encumbered except as otherwise provided herein.

(d)The Corporation may withhold any federal, state or local taxes required with respect to any distribution under this Plan.  The Employee shall take whatever action the Committee deems appropriate with respect to withholding of taxes, including, but not limited to, the Employee remitting to the Corporation any taxes required to be withheld by the Corporation under federal, state or local law as a result of the distribution.

(e)Notwithstanding anything contained herein to the contrary, this Plan shall be administered and operated in accordance with any applicable laws and regulations, including, but not limited to, Section 409A of the Code.  The Corporation reserves the right to amend this Plan at any time in order for this Plan to comply with any such laws and regulations.

(f)This Plan will be governed, construed and administered in accordance with the laws of Maryland.

(g)If any provision of this Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of this Plan, and this Plan shall be construed and enforced as if such provision had not been included.

IN WITNESS WHEREOF, the Corporation, by its duly authorized officer, has executed this Plan on the Effective Date as first set forth above and as duly authorized by the Committee.

 

UNITI GROUP INC.

 

 

By: /s/ Kenneth A. Gunderman

Name:  Kenneth A. Gunderman

Title:President and Chief Executive Officer

 

Exhibit A to 

2019 Short-Term Incentive Plan

 

	
 
	
1.
	
Annual STIP Bonus.  Metrics applicable to Uniti Group Inc. CEO, CFO and GC:

 

A.Consolidated AFFO(1) (20% weight):

			
	
Threshold
	
Target
	
Superior

	
[**]
	
[**]
	
[**]

 

B.Consolidated Adjusted EBITDA(1) (20% weight):

			
	
Threshold
	
Target
	
Superior

	
[**]
	
[**]
	
[**]

 

C.Net Leverage(1)  (40% weight):

			
	
Threshold
	
Target
	
Superior

	
[**]
	
[**]
	
[**]

 

D.Personal Goals (20%) as determined by the Compensation Committee

 

	
 
	
E.
	
Payouts for each component will be interpolated between levels.  Potential Payouts at each level are as follows:

				
	
Performance Achievement Level
	
Potential as Percent of Base Salary

	
CEO
	
CFO
	
GC

	
Threshold

Target

Superior
	
75%

150%

225%
	
50%

100%

150%

 

	
 
	
2.
	
Special 2019 Bonus Opportunity.

 

	
 
	
•
	
Upon completion of [**], the Compensation Committee will consider special bonus payments.

 

	
 
	
•
	
Eligible management will be the NEOs and direct reports to the CEO, as well as other individuals identified by the CEO or the Compensation Committee.

 

	
 
	
•
	
Bonus opportunities will be up to 75% of each employee’s target bonus.

 

	
 
	
•
	
Individual payouts will be recommended by the CEO and at the discretion of the Compensation Committee

 

	
 
	
•
	
Specific, measurable performance metrics [**] may be added at a later date.

 

 

	
(1) 
	
Definition to be consistent with public reporting. Excludes M&A, capital markets activity and any effect of dispositions, contributions to joint ventures, [**] (i.e. [**]), any effect of [**] or additional business expansion not contemplated in the Annual Operating Plan (“AOP”), such as entering new markets or rolling out / developing new products. Metric is based on AOP and will be adjusted to account for timing differences resulting from actual closing dates of acquisitions and dispositions compared to estimated closing dates contemplated in the AOP.catc-ex1020_11.htm

 

Ex: 10.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Executive Short-Term Incentive Plan

 

Plan Summary

 

2019

 

 

Introduction and Objective

Cambridge Trust’s Annual Incentive Plan is designed to recognize and reward management for their collective contributions to the Bank’s success.  The Plan focuses on financial measures that are critical to the Bank’s growth and profitability. Individually and collectively, we all have the ability to influence and drive our success.  When Cambridge Trust succeeds, our employees will succeed. This document summarizes the elements and features of the Plan.

In short, the objectives of the Incentive Plan are to:

	
 
	
•
	
Focus executive attention on key business metrics.

	
 
	
•
	
Align pay with organizational and individual performance.

	
 
	
•
	
Encourage teamwork and collaboration across all areas of the Bank. Our collective contributions will drive improved business results.

	
 
	
•
	
Motivate and reward the achievement of specific and measurable performance objectives.

	
 
	
•
	
Provide competitive total cash compensation.

	
 
	
•
	
Provide significant reward for achieving and exceeding performance results.

	
 
	
•
	
Enable the Bank to attract and retain the talent needed to drive success.

Eligibility

	
 
	
•
	
Employees hired during the Plan year will receive pro-rated awards based on their month of hire.

	
 
	
•
	
Participants must be an active employee as of the last day of the measurement period to receive an award, unless they terminate due to death or disability (as determined by the company). Individuals who terminate for these reasons during the plan year will receive a pro- rated award as further explained in the Terms and Conditions of this plan.

Performance Period

 

The performance period and plan operates on a calendar year basis (January 1 – December 31). Actual payout awards are made in cash following year-end after Cambridge Bancorp’s financial results and performance are known.

 

Incentive Payout Opportunity

 

Each participant will have a target incentive opportunity based on his/her role. The target incentive will reflect a percentage of base salary and be determined consistent with competitive market practices. Actual awards will vary based on achievement of specific goals. The opportunity reflects a range of potential awards. Actual awards may range from 0% of target (for not achieving threshold performance) to 150% of target (for stretch performance).

 

The table on Exhibit A summarizes the incentive ranges for the 2019 Plan year.

 

2

 

Incentive Plan Measures

 

Each participant will have defined performance goals that will determine his/her annual incentive award. There are two performance categories: Bank and Individual. The table on Exhibit A provides guidelines for the allocation of participant’s incentives for each performance component.  The specific allocation of goals will be weighted to reflect the focus and contribution for each role/level in the Bank. Weightings for each performance goal will be determined for each participant at the beginning of each plan year.

 

Plan Trigger:  In order for the Annual Incentive Plan to ‘activate’, Cambridge Trust must achieve at least 50% of its targeted operating income before securities gains and losses. If the Bank does not meet this level, the plan will only pay awards at the Committee’s discretion.

 

Bank Performance

 

The Bank performance goals for 2019 are Return on Equity (After-Tax) and Pre-tax Operating Income. The ROE (after-tax) performance will be compared to budget but will only pay out if the Bank’s ROE is at the 75th percentile or higher vs. peers.  The peer index is defined as Commercial Banks with assets $500M - $5B, located in the Northeast (CT, MA, ME, NH, NJ, NY, PA, RI and VT) and traded on NYSE, NASDAQ, and OTCBB. The operating income goal will be tied to Cambridge Trust’s fiscal year budget and reflects operating income prior to security gains/losses and taxes and other extraordinary items.

 

The table below shows the specific performance goal at threshold, target and stretch for 2019. A minimum achievement of threshold level performance is required for the plan to pay for each component.

 

	
Bank Performance
	
2019 Performance Goals

	
 

Measures
	
 

Threshold
	
 

Target
	
 

Stretch

	
 

Return on Equity (after tax)
	
80% - No Payout if below 75th Percentile of Peer Index Performance
	
Per Budget
	
120% of Budgeted ROE (after tax)

	
Operating Income

(before security gains/ losses and taxes)
	
 

50%
	
 

Per Budget
	
 

120%

 

Individual Performance

 

In addition to the Bank performance, participants will have individual goals (up to 5 key objectives) that will focus on either department/team performance (e.g. lending growth, deposit growth) and/or individual performance. The mix of these goals will vary by role. Where possible, performance targets and ranges for each measure will be set at the beginning of the plan year. If performance-to- goal cannot be quantified, Committee discretion will be used to evaluate goal attainment as follows:

 

	
 

Performance
	
 

Did not Achieve
	
 

Partially Achieved
	
 

Fully Achieved
	
 

Clearly Exceeded

	
Award as % of Target
	
0% to 25%
	
26% to 90%
	
91% to 110%
	
111% to 150%

 

3

 

Discretion within performance zones will allow for the quality of the result and the impact of external circumstances on performance. For example, if the CEO made great progress toward goal attainment under difficult circumstances, he might receive an award of 85%, even though the goal was not reached. The same CEO progress toward goal attainment reached under favorable circumstances might only result in a 30% award.

 

Payouts

 

Payouts will be made in cash as soon as possible after the closing of Bank financials each year but typically during the month of February. Awards are calculated based on actual performance relative to target. For Bank goals, achieving threshold performance will pay out at 50% of target incentive, target performance will pay out 100% of target, and stretch performance will pay out at 150% of target incentive. Performance below threshold will result in a 0% payout. 

 

Actual payouts for each performance goal will be interpolated between threshold. target and stretch levels to reward incremental improvement. Payouts are assessed by component such that one goal may achieve stretch and another may achieve only threshold for individual goals, the range of payout will be 0%- 150% in accordance with the payout grid above.

 

Illustration

 

The table below is an illustration of a simple plan design for a SVP (Tier 4) with a base salary of $150,000 and an incentive target of 35% of base salary ($52,500). Goals and weightings are for illustration purposes only. This example assumes that Cambridge Trust’s Peer Index ROE performance was at or higher than the 75th percentile and that the Operating Income met the budgeted target.

 

	
Participant Goals
	
Performance and Payout

	
Performance

Measure
	
Performance Goal

threshold/target/stretch
	
 

Weight
	
 

$
	
Actual

Performance
	
Payout

Allocation

(0% - 150%)
	
 

Payout ($)

	
ROE (after tax)
	
 

8.8% / 11% / 13.2%
	
 

37.5%
	
 

$19,687
	
 

8.8%
	
 

50%
	
 

$9,844

	
Operating

Income
	
 

$13.3M / $16.6M / $19.9M
	
 

37.5%
	
 

$19,687
	
 

$16.6M
	
 

100%
	
 

$19,687

	
Individual performance Goals
	
 

TBD
	
 

25%
	
 

$13,125
	
 

Stretch
	
 

150%
	
 

$19,687

	
TOTAL
	
 
	
100%
	
$52,500
	
90% payout
	
$49,218

 

This participant’s payout of $49,218 is 90% of target. The payout reflects Cambridge Trust’s ROE performance at “threshold”, Operating Income at target and one Individual goal at stretch and another that was not achieved.

4

 

Terms and Conditions

 

Effective Date

 

This Program is effective January 1, 2019 to reflect plan year January 1, 2019 to December 31, 2019. The Plan is reviewed and approved annually by the Bank’s Compensation Committee to ensure proper alignment with the Bank’s business objectives. Cambridge Trust retains the rights as described below to amend, modify or discontinue the Plan at any time during the specified period. The Incentive Plan will remain in effect until December 31, 2019.

 

Program Administration

 

The Plan is authorized by the Compensation Committee, which reports to the Board of Directors. The Compensation Committee has the sole authority to interpret the Plan and to make or nullify any rules and procedures, as necessary, for proper administration. Any determination by the Committee will be final and binding on all participants.

 

Program Changes or Discontinuance

 

Cambridge Trust has developed the plan based on existing business, market and economic conditions. If substantial changes occur that affect these conditions, Cambridge Trust may add to, amend, modify or discontinue any of the terms or conditions of the plan at any time.

 

The Compensation Committee and Board of Directors also have the ability to adjust/modify or cancel plan payouts to reflect results from regulatory and/or safety and soundness exams.

 

The Compensation Committee may, at its sole discretion, waive, change or amend the Plan, as it deems appropriate.

 

Incentive Award Payments

 

Awards will be paid as a cash bonus before the end of the first quarter following the Plan year. Awards will be paid out as a percentage of a participant’s base salary earned during the year as of December 31 for a given calendar year. Incentive awards will be considered taxable income to participants in the year paid and will be subject to withholding for required income and other applicable taxes.

 

Any rights accruing to a participant or his/her beneficiary under the Plan shall be solely those of an unsecured general creditor of Cambridge Trust. Nothing contained in the Plan, and no action taken pursuant to the provisions hereof, will create or be construed to create a trust of any kind, or a pledge, or a fiduciary relationship between Cambridge Trust or the CEO and the participant or any other person. Nothing herein will be construed to require Cambridge Trust or the CEO to maintain any fund or to segregate any amount for a participant’s benefit.

 

New Hires, Promotions, and Transfers

 

New participants will receive a pro rata incentive award based on their month of hire during their initial Plan year.

 

A participant whose work schedule changes during the Plan year will be eligible for prorated treatment that reflects his/her time in the different schedules.

 

5

 

If a participant changes his/her role or is promoted during the Plan year, he/she will be eligible for the new role’s target incentive award on a pro rata basis (i.e. the award will be prorated based on the number of months employed in the respective positions.)

 

Termination of Employment

 

If a Plan participant is terminated by the Bank for any other reason than retirement, death or disability prior to award payouts, no incentive award will be paid. To encourage employees to remain in the employment of Cambridge Trust, a participant must be an active employee of the Bank at the time of the award. (See exceptions for death and disability.)

 

Retirement, Disability and Death

 

Individuals who will be retiring must be an active employee as of December 31 of the plan year in order to receive a payout. If an employee retires prior to this date, the individual will not receive an award. For the purposes of this plan, retirement is defined as age 65; consistent with guidelines established in Cambridge Trust’s existing retirement plan(s).

 

If a participant is disabled by an accident or illness, and is disabled long enough to be placed on long- term disability, his/her bonus award for the Plan period shall be prorated so that no award will be earned during the period of long-term disability.

 

In the event of death, Cambridge Trust will pay to the participant’s estate the pro rata portion of the award that had been earned by the participant.

 

Ethics and Interpretation

 

If there is any ambiguity as to the meaning of any terms or provisions of this plan or any questions as to the correct interpretation of any information contained therein, the Bank’s interpretation expressed by the Compensation Committee will be final and binding.

 

The altering, inflating, and/or inappropriate manipulation of performance/financial results or any other infraction of recognized ethical business standards will subject the employee to disciplinary action up to and including termination of employment. In addition, any incentive compensation as provided by the plan to which the employee would otherwise be entitled will be revoked.

 

Participants who have willfully engaged in any activity, injurious to the Bank, will upon termination of employment, death, or retirement, forfeit any incentive award earned during the award period in which the termination occurred.

Clawback

 

In the event that Cambridge Trust is required to prepare an accounting restatement due to a significant error, omission or fraud (as determined by the members of the Compensation Committee or the Board of Directors), each executive officer who is considered a member of “Senior Management” shall reimburse the Bank for part or the entire incentive award made to such executive officer on the basis of having met or exceeded specific targets for performance periods. For purposes of this policy, (i) the term “incentive awards” means awards under the Bank’s Annual Incentive Plan (AIP), the amount of which is determined in whole or in part upon specific performance targets relating to the financial results of the Bank; and (ii) the term “Senior Management” means employees in SVP roles and above who are eligible to participate in the Bank’s Annual Incentive Plan (AIP). The Bank may seek to reclaim incentives within a three-year period of the incentive payout, even if the participant has terminated employment.

6

 

Miscellaneous

 

The Plan will not be deemed to give any participant the right to be retained in the employ of Cambridge Trust, nor will the Plan interfere with the right of Cambridge Trust to discharge any participant at any time.

 

In the absence of an authorized, written employment contract, the relationship between employees and Cambridge Trust is one of at-will employment. The Plan does not alter the relationship.

 

This incentive plan and the transactions and payments hereunder shall, in all respect, be governed by, and construed and enforced in accordance with the laws of the state of Massachusetts.

 

Each provision in this Plan is severable, and if any provision is held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not, in any way, be affected or impaired thereby.

7

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