Document:

exhibit10209d0012_mod001

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:  (a) By completing items 8 and 15, and returning                         or (c) By separate letter or electronic communication which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE   RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If   by virtue of this amendment you desire to change an offer already submitted, such change may be made by letter or electronic communication, provided each letter or electronic  communication makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified. E. IMPORTANT: Contractor    is not    is required to sign this document and return  copies to the issuing office. AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE 2. AMENDMENT/MODIFICATION NUMBER 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQUISITION NUMBER 5. PROJECT NUMBER  (If applicable) 7. ADMINISTERED BY (If other than Item 6) CODE STANDARD FORM 30  (REV. 11/2016)  Prescribed by GSA FAR (48 CFR) 53.243 FACILITY CODE 9A. AMENDMENT OF SOLICITATION NUMBER 9B. DATED (SEE ITEM 11) 10A. MODIFICATION OF CONTRACT/ORDER NUMBER 10B. DATED (SEE ITEM 13) 11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS          The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers is extended. is not extended.  12. ACCOUNTING AND APPROPRIATION DATA (If required) copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; 13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NUMBER AS DESCRIBED IN ITEM 14. CHECK ONE A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NUMBER  IN ITEM 10A. B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation  data, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b). C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF: D. OTHER (Specify type of modification and authority) Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect. 15C. DATE SIGNED 15A. NAME AND TITLE OF SIGNER (Type or print) 16C. DATE SIGNED 16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print) 14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.) PAGE    OF  PAGES 6. ISSUED BY CODE 8. NAME AND ADDRESS OF CONTRACTOR (Number, street, county, State and ZIP Code) (X) CODE 15B. CONTRACTOR/OFFEROR (Signature of person authorized to sign) 16B. UNITED STATES OF AMERICA (Signature of Contracting Officer)  Previous edition unusable Please see continuation page... 1 10 EDFSA09D0012P00126 DEC 15, 2021 FSA-FS2 United States Department of Education Federal Student Aid/Mission Support Group 830 First St NE - Suite 91F3 Washington DC 20202 Elvis Taylor 202-377-4013 elvis.taylor@ed.gov See Block 6 00030773 EDFSA09D0012 JUN 17, 2009 See Schedule ✖ Mutual Agreement of the Parties ✖ 1 Wesley Beemer, Contracting Officer 202-377-3710    Wesley.Beemer@ed.gov SEP 24, 2021 DUNS: 967379496 Cage Code: 5J3D5 GREAT LAKES EDUCATIONAL LOAN SERVICES, INC. 2401 INTERNATIONAL LN. MADISON WI 53704 Modification Amount: $0.00 Modification Obligated Amount: $0.00 ✖ Wesley Beemer Digitally signed by Wesley  Beemer  Date: 2021.09.24 18:18:50 -04'00' 

 

Attachment Page PAGE 2 OF  10   EDFSA09D0012P00126 The purpose of modification P00126 is to revise contract ED-FSA-09-D-0012 (Great Lakes) as  follows:    A. Update FAR clause 52.216-22, Indefinite Quantity, to allow performance under this contract  until December 14, 2023. See Attachment 1A. (reference previous mod P00115)                                   B. Incorporate the following other changes into the contract, replace Attachment A-4   (reference previous modification P00125), and Update C.2 Attachments/Supplemental  Documents (previously updated in modification P00125):                 1. New Service Level Agreement Performance Metrics (new addition to contract)    A. FSA will evaluate the Contractor against new performance-related Service Level Agreement Metrics  (“SLA Metrics”) on a quarterly basis, and these new SLA Metrics will be a substantial driver in assigning  new borrower accounts, which will also occur on a quarterly basis.    B. New SLA Metrics  1. Customer Satisfaction  minimum threshold: 70%   2. Abandon Rate    no higher than 4.0%   3. Interaction Quality Monitoring minimum threshold: 95%  4. Accuracy Rate   minimum threshold: 95%    C. Federal Student Aid (FSA) intends to, but is not required to, enhance its measurement of Customer  Satisfaction by adding to or revising elements of its borrower survey and by focusing its analysis on  customers who had a recent interaction with the Contractor.    D. FSA intends to, but is not required to, enhance its measurement of Interaction Quality Monitoring by  increasing the sample size of interactions it measures.     2. Replace Future Borrower Allocation Methodology Attachment A-4 (reference previous  modification P00125)    A.   Metrics and weighting of metrics:                      1. Service Level Agreement Metrics (Weighting: 65%)    a. 25% Customer Satisfaction     b. 15% Abandon Rate     c. 15% Quality Monitoring    d. 10% Accuracy Rate                      2. Portfolio Performance Metrics (Weighting: 35%)   a. 20% of borrowers current (defined for allocation methodology purposes only as <31 days  delinquent)   b. 10% of borrowers 31-90 days delinquent   c. 5% of borrowers >90 days delinquent    B. Within each of the three time-in-delinquency borrower segments in the Portfolio Performance Metrics       identified above, each segment will be evaluated against the borrower segments below:    1.  Segment #1: 20% Borrowers who previously defaulted        2.  Segment #2: 35% At-risk borrowers   a. Have not graduated and first entered repayment since 2014 OR    b. Entered repayment for the first time within the last 36 months OR  

 

Attachment Page PAGE 3 OF  10   EDFSA09D0012P00126 c. Exited hardship, unemployment or natural disaster deferment or forbearance in the last 48  months OR  d. In FY22, any borrower who was more than 90 days delinquent during the year prior to the  pay pause. In FY23, any borrower who was more than 90 days delinquent in the past year.             3.  Segment #3: 15% Parent PLUS and Consolidation loans        4.  Segment #4: 30% All other borrowers    C. FSA will retain the current ranking/scoring methodology as it ranks Contractors for allocation of new  borrowers. For example, if there are six Contractors pursuing a particular SLA metric that is worth 10%  of the overall score, the top scoring Contractor on that metric would receive a “Ranking Score” of 6,  which would be multiplied by the weighting of the metric (10%) for a total of 60 points. If two or more  Contractors receive the same metric score those Contractors will receive the same Ranking Score (e.g.,  if two Contractors tie for 2nd place out of 6 Contractors, both Contractors will receive a Ranking Score of  4.5). Because the metrics collectively add up to 100%, if there are six Contractors seeking new borrower  allocation then the highest number of possible points a Contractor could achieve in each quarter is 600.  The percentage or number of loans the Contractor receives in any allocation of new borrower accounts  remains in the sole discretion of FSA.      D. Additional changes to the scoring methodology:  1. If a Contractor fails to meet an SLA metric, the Contractor’s Ranking Score for that SLA metric will  be reduced by 1.  2. If a Contractor either: (1) fails to meet all the SLA metrics in one review period, or (2) has the  lowest cumulative score of all Contractors for 3 of the last 4 review periods, FSA reserves the right to  not allocate any new borrowers to that Contractor for that period. This provision in no way limits  FSA’s discretion to allocate current or future loans among Contractors as provided for in other  provisions of the contract.   3. The Contractor’s cumulative score (adding up all of Contractor’s SLA and portfolio metrics) will  then be divided by the total of all of the cumulative scores from all of the loan Contractors to  determine the new borrower allocation rates.      3. New Contact Center Requirements (new addition to contract)  A. Minimum Contact Center Hours:   1. Mon  0800-2300 EST      Tue – Fri 0800-2000 EST        Sat 1000-1400 EST  B. Availability of Spanish speaking representatives: Ensure Spanish callers have access to    Spanish speaking contact center representatives during open hours.  C. Call Retention: Record and retain 100% of incoming/outbounds calls for a minimum of 1 year.  D. Call Monitoring: Have the capability for FSA to perform live monitoring of calls.       4. Additional Oversight and Accountability Provisions  A. Replace - Compliance with Federal, State and Local Laws: The Contractor shall comply with all  Federal, State and local laws, rules and regulations applicable to its performance under this  contract to the extent State and local laws, rules and regulations are not preempted by Federal  law.   B. New - Qualified Immunity: The Contractor agrees to waive any claims or defenses of qualified  immunity for lawsuits relating directly to its performance of this contract.  C. New - Complaints: The Contractor will fully and timely respond to borrower complaints related to  the Contractor’s performance of this contract submitted to federal, state, or local government  agencies, including but not limited to the Consumer Financial Protection Bureau.  D. Replace - Access to systems: The Contractor shall provide FSA with full and timely access to  servicing and reporting systems, monitoring capabilities configured across all interaction  

 

Attachment Page PAGE 4 OF  10   EDFSA09D0012P00126 channels, customer-facing websites, quality management systems and credit reporting/dispute  systems.   E. New - Enhanced Reporting  1. Contact Center Statistics (Daily and Weekly)  2. Customer Interaction Logs (Weekly and Monthly)  3. Timeliness (Work in Progress/Oldest Date) Reports (Weekly and Monthly)  4. Volume Reports (Weekly)  5. Forecasting Reports (Weekly and Monthly)   6. Staffing Report (Weekly)  7. Contact Center Quality Control Reports (Monthly)  8. Customer Complaint Logs (Monthly)  9. Credit Reporting and Disputes (Monthly)  10. Internal Quality Assurance and Error Reports (Monthly / Ad hoc)    F. New - Transparency: FSA reserves the right to publicly release data related to the Contractor’s  performance including, but not limited to, call center performance metrics. FSA will strive for  consistency and verification of information published.     5.  Allocation Methodology   The Contractor reaffirms that the allocation or reallocation of borrower loans, including specialty  programs, existing at the time of the effective date of this modification, as well as those that may be  reassigned from existing Contractors, is in the sole discretion of FSA. The Contractor agrees not to  object to or protest FSA’s allocation or reallocation of existing borrower loans, and further waives and  releases all current and future claims against the Department of Education, Office of Federal Student  Aid regarding its account allocation decisions and methodology for existing borrower loans.     All other terms and conditions remain unchanged.   

 

Attachment Page PAGE 5 OF  10   EDFSA09D0012P00126 Attachment 1A: Revised FAR Clause 52.216-22, Indefinite Quantity      OLD    INDEFINITE QUANTITY (OCT 1995)    (a) This is an indefinite-quantity  contract for the supplies or services  specified, and effective for the period stated,  in the Schedule. The quantities of supplies  and services specified in the Schedule are  estimates only and are not purchased by this  contract.    (b) Delivery or performance shall be  made only as authorized by orders issued in  accordance with the Ordering clause. The  Contractor shall furnish to the Government,  when and if ordered, the supplies or services  specified in the Schedule up to and  including the quantity designated in the  Schedule as the "maximum." The  Government shall order at least the quantity  of supplies or services designated in the  Schedule as the "minimum."    (c) Except for any limitations on  quantities in the Order Limitations clause or  in the Schedule, there is no limit on the  number of orders that may be issued. The  Government may issue orders requiring  delivery to multiple destinations or  performance at multiple locations.    (d) Any order issued during the  effective period of this contract and not  completed within that period shall be  completed by the Contractor within the time  specified in the order. The contract shall  govern the Contractor’s and Government’s  rights and obligations with respect to that  order to the same extent as if the order were  completed during the contract’s effective  period; provided, that the Contractor shall  not be required to make any deliveries under  this contract after December 15, 2019  through December 14, 2021.    (End of clause)  NEW    INDEFINITE QUANTITY (OCT 1995)    (a) This is an indefinite-quantity  contract for the supplies or services  specified, and effective for the period stated,  in the Schedule. The quantities of supplies  and services specified in the Schedule are  estimates only and are not purchased by this  contract.    (b) Delivery or performance shall be  made only as authorized by orders issued in  accordance with the Ordering clause. The  Contractor shall furnish to the Government,  when and if ordered, the supplies or services  specified in the Schedule up to and  including the quantity designated in the  Schedule as the "maximum." The  Government shall order at least the quantity  of supplies or services designated in the  Schedule as the "minimum."    (c) Except for any limitations on  quantities in the Order Limitations clause or  in the Schedule, there is no limit on the  number of orders that may be issued. The  Government may issue orders requiring  delivery to multiple destinations or  performance at multiple locations.    (d) Any order issued during the  effective period of this contract and not  completed within that period shall be  completed by the Contractor within the time  specified in the order. The contract shall  govern the Contractor’s and Government’s  rights and obligations with respect to that  order to the same extent as if the order were  completed during the contract’s effective  period; provided, that the Contractor shall  not be required to make any deliveries under  this contract after December 14, 2023.    (End of clause)  

 

Attachment Page PAGE 6 OF  10   EDFSA09D0012P00126 Section C- Description/Specifications/Work Statement    The following has been modified:    C.2. Attachments/Supplemental Documents  Number Title  A-1 Additional Servicer—Initial Requirements Document (Version 21.0)  A-2 Additional Servicer—Intermediate Requirements Document (Version 6.0)  A-3 Additional Servicer—Full Requirements Document (Version 6.0)  A-4 Ongoing Allocation Methodology (Version 9.0)  A-5 Sample—Ongoing Allocation Metric Calculation (Version 4.0)  A-6 Servicing Pricing Definitions (Version 11.0)  A-7 Borrower Status Reporting (Retention) (Version 4.0)  A-8 Quarterly Delinquency Reduction Compensation Report (Version 2.0)  A-9 Monthly Invoice Report (Version 2.0)  A-10 Wage Determinations  A-11 PIV-I Reporting Deliverables                                                                            

 

Attachment Page PAGE 7 OF  10   EDFSA09D0012P00126   Attachment A-4    Servicer Allocation Metrics    FSA will evaluate the servicer against performance-related Service Level Agreement Metrics (“SLA  Metrics”) and portfolio performance metrics (“Portfolio Metrics”). These new SLA Metrics will be  a substantial driver in assigning new borrower accounts and the SLA thresholds are defined  elsewhere in the contract.    Note: A servicer may be given 0% (zero percent) of the designated new borrower pool, at the  Government's sole discretion.    Performance Periods  The allocation of ongoing volume will be determined quarterly basis based on the performance of  each servicer in relation to the other servicers. Quarterly results will be complied for each servicer  based on the performance measures listed below. Each servicer may be given a percentage of the  designated new borrower pool available to be distributed for the upcoming quarter.     Except where noted above, quarterly scores will be compiled for each servicer, quarters are  defined as:   • Q1 = October 1 to December 31;   • Q2 = January 1 to March 31;   • Q3 = April 1 to June 30, and   • Q4 = July 1 to September 30.    The allocation of future volume will be determined based on the following factors:    Allocation Metrics  1. Servicer Level Agreement Metrics (“SLA Metrics”) – Total Weight 65%  A. 25% Customer Satisfaction Survey: Customer satisfaction survey(s) will be conducted at  least quarterly. The survey will measure borrower satisfaction with the servicer and results will  be based on a scale of 0-100, with 100 representing a perfect score. FSA or an agent of FSA will  conduct the survey(s).     B. 15% Abandon Rate: The percentage of calls that are terminated by the caller once offered  out of the Interactive Voice Response (IVR) menu to be answered by an agent.    C. 15% Quality Monitoring: The percentage of customer interactions that received a passing  score. FSA or an agent of FSA will score the interactions.    D. 10% Accuracy Rate: The percentage of tasks performed by the servicer and reviewed by FSA  that were completed correctly the first time. FSA or an agent of FSA will evaluate the accuracy  of the tasks performed.    For “SLA Metrics” a higher score is better except for the “Abandon Rate” SLA where a lower score is  better.    2. Portfolio Performance Metrics (“Portfolio Metrics”) – Total Weight 35%. These metrics are  measured by combining weighted rankings from each of the Borrower Segments below:    A. 20% Percentage of borrowers “Current” or 1-30 days delinquent: The number of  borrowers with loans in repayment status at the end of the quarter that are current or less  than 31 days delinquent divided by the number of all borrowers with loans held by the servicer  that are in repayment loan status or less than 361 delinquent at the end of the quarter.  

 

Attachment Page PAGE 8 OF  10   EDFSA09D0012P00126   B. 10% Percentage of borrowers 31-90 days delinquent: The number of borrowers with loans  greater than 30 days delinquent and less than 91 days delinquent at the end of the quarter  divided by the number of all borrowers with loans held by the servicer that are in repayment  loan status or less than 361 delinquent at the end of the quarter.    C. 5%  Percentage of borrowers 91-360 days delinquent: The number of borrowers with  loans greater than 90 days delinquent and less than 361 days delinquent at the end of the  quarter divided by the number of all borrowers with loans held by the servicer that are in  repayment loan status or less than 361 delinquent at the end of the quarter.    For “Portfolio Metrics” a higher score is better for “Current” borrowers metric and a lower score  is better for the other two “Portfolio Metrics.” For “Portfolio Metrics” borrowers in school, in  grace, in deferment, in forbearance, in Service Member, and more than 360 days delinquent  status are excluded from both the numerator and denominator in the calculations. Calculations  will be rounded to the hundredth of a percent. Borrowers with loans in multiple repayment  statuses shall be counted once, in the lowest performing repayment status.    Borrower Segments  For each Portfolio Metric identified in 2(A)-(C), each servicer will receive a score, which is  determined by combining weighted rankings from each of the following Borrower Segments:    i) Borrower Segment #1: 20% Borrowers who previously defaulted  ii) Borrower Segment #2: 35% At-risk borrowers (as defined below):  a. Have not graduated and first entered repayment since 2014 OR    b. Entered repayment for the first time within the last 36 months OR  c. Exited hardship, unemployment or natural disaster deferment or forbearance in the last 48  months OR  d. In FY22, any borrower who was more than 90 days delinquent during the year prior to the  CARES Act payment pause. In FY23, any borrower who was more than 90 days delinquent in  the past year.  iii) Borrower Segment #3: 15% Parent PLUS and Consolidation borrowers  iv) Borrower Segment #4: 30% All other borrowers    For each Borrower Segment, FSA will rank each servicer, the best score receiving the h ig h est   va lue  and the worst score receiving the lowest value. The highest value will be determined by the  total number of servicers included in the allocation pool, and the lowest value will be 1. In case of ties,  servicers with identical scores would divide the combined placement points equally.     Once a Borrower Segment rank has been assigned to each servicer in segment, the rank will be  multiplied based on the weighting given to that metric. The weighted scores for all four Borrower  Segments will be added together to arrive at a “Portfolio Metric Score”. Each servicer will one  “Portfolio Metric Score” for each of the three Portfolio Metrics 2(A)-(C).    Allocation Metric Score Comparison Among Servicers  The above calculations will result in a total of 7 scores for each servicer, for each SLA and Portfolio  Metric category.     FSA will compare the scores in each category and provide a “Metric Ranking Score” for each servicer in  that category, with the best score receiving the highest value and the worst score receiving the lowest  value. The highest value will be determined by the total number of servicers included in the allocation  pool, and the lowest value will be 1. In case of ties, servicers with identical scores would divide the  combined placement points equally. In addition, if a servicer fails to meet an SLA metric, its “Metric  Ranking Score” for that SLA metric will be reduced by 1, regardless of where that servicer ranks in  relation to other servicers.  

 

Attachment Page PAGE 9 OF  10   EDFSA09D0012P00126   Once a “Metric Ranking Score” has been assigned to each servicer in a category, the Metric Ranking  Score will be multiplied based on the weighting given to that metric.  All weighted scores for a servicer  will then be added together to arrive at a "Total Score". Each servicer will have one Total Score for  each quarter.    Example illustration: If there are six servicers pursuing a SLA metric that is worth 10% of the Total  Score, the top scoring servicer for that metric would receive a “Metric Ranking Score” of 6, which  would be multiplied by the weighting of the metric (10%) for a total of 60 points. If two servicers tie for  2nd place out of 6 servicers, both servicers would receive a Metric Ranking Score of 4.5 (5 plus 4,  divided by 2) and each would receive 45 points. If a servicer received a preliminary score of 3 but failed  to meet the minimum threshold for the SLA Metric, its score would be reduced by 1 point, for a Metric  Ranking Score of 2 for a total of 20 points.    Allocation of New Volume of Federally Held Debt  Each servicer may be assigned an allocation of new volume by dividing that servicer's Total Score  by the combined total scores of all servicers. The resulting percentage will determine each  servicer's percentage of new volume of Federally Held Debt.    The servicer's percentage of new volume will determine the percentage of new borrowers that  may be sent to the servicer for servicing (loans for existing borrowers may, to the maximum  extent practicable, be sent to the servicer already holding that borrower's other loans).     FSA reserves the right to adjust allocation percentages to whole numbers that total 100.00%, this  may result in rounding and/or truncation to one or more allocation percentages of one/more  servicers.    If a servicer either:   (1) fails to meet all the SLA metrics in one review period, or   (2) has the lowest total score of all servicers for 3 of the last 4 review periods,   FSA reserves the right to not allocate any new borrowers to that servicer for that period.     Consistent with the provisions of the Consolidated Appropriations Act of 2016, FSA also reserves the  right to adjust allocations based on the capacity of each servicer to process new and existing accounts.    If a servicer is out of compliance (for example, but not limited to, financial management or reporting,  security, 0MB Circular A-123, Legislative Mandates, Program Compliance, etc.), that servicer's new  volume may be re-allocated to one or more other servicers. In addition, that servicer's current account  volume may be transferred to another servicer, at the non-compliant servicer's expense.      Record Retention  Each servicer shall maintain a listing of all borrowers within their federal portfolio identifying  which borrowers exist in each status at the time of invoicing and/or metric submissions to FSA.  This information shall be provided to FSA on demand and shall be maintained throughout the  performance period and provided to FSA at the end of the contract period. (See Attachment A- 7,  Borrower Status Reporting)  

 

SCHEDULE Continued ITEM NO. SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE  AMOUNT          Contracting Officer: Wesley Beemer, 202-377-3710,  Wesley.Beemer@ed.gov Primary Contracting Officer Representative:  Patrice Washington, (202) 377-3845,  Patrice.Washington@ed.gov Alternate Contracting Officer Representative(s): Andre Barbosa, 202-377-3332, Andre.Barbosa@ed.gov Primary Technical Point of Contact: None Alternate Technical Point(s) of Contact: None   PAGE 10 OF  10   EDFSA09D0012P00126Document

Exhibit 10.1

SILVERGATE BANK ANNUAL CASH INCENTIVE PLAN

1.Introduction and Objective

This Silvergate Bank (the “Company”) Annual Cash Incentive Plan (the “Plan”) is designed to recognize and reward certain employees of the Company and its affiliates for their individual contributions to the success of the Company. The Plan focuses on financial measures that are critical to the Company’s growth and profitability. This document describes the elements and features of the Plan.  In short, the objectives of the Incentive Plan are to:
•Align pay with performance
•Encourage teamwork and collaboration across all areas of the Company and its affiliates
•Motivate and reward the achievement of specific, measurable performance objectives
•Position total cash compensation to be competitive with market when performance meets expectations
•Motivate and reward employees for achieving/exceeding performance goals
•Enable the Company and its affiliates to attract and retain the talent needed to drive success

2.Eligibility

The Company’s CEO and certain other executive officers of the Company and its affiliates selected by the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) are eligible to participate in the Plan. An employee who becomes a participant after the beginning of the Plan year, whether because he or she is a new hire or because he or she is appointed as an executive officer during a Plan year, is eligible for a prorated award for that Plan year based on the period of the Plan year during which he or she was a participant, provided that an executive must be employed by October 1 of a Plan year to be eligible for an award for that Plan year.

Participants must maintain a satisfactory performance level, as determined by the Committee, and be an active employee of the Company or one of its affiliates as of the award payout date to receive an award, other than exceptions for death, disability and retirement contained herein or as provided in any separate employment agreement between the Company and a Plan participant.

3.Effective Date

The Plan is effective for the year beginning January 1, 2021. The Plan will be reviewed annually by the Committee and the CEO to ensure proper alignment with the Company’s business objectives.  The Company retains the right at any time to discontinue the Plan or to amend it in any respect, including to comply with applicable laws or regulations. The Plan will remain in effect until terminated by the Board.

4.Amendment or Termination of the Plan

The Board or the Committee may, at any time, amend, suspend, or terminate the Plan in whole or in part.

5.Program Administration

The Plan was recommended by the Committee and adopted by the Board. The Committee has the primary authority to interpret the Plan and to make or nullify any rules and procedures, as necessary, 

for Plan administration. Any determination by the Committee will be final and binding on all participants.

6.Performance Period

The performance period and Plan operate on a calendar year basis (January 1 – December 31). The first Plan year is January 1, 2021 to December 31, 2021.

7.Incentive Payout Opportunity

Each participant will have a target incentive opportunity based on competitive market practice for his/her role.  A participant’s award will be based upon a percentage of the participant’s base salary as of December 31 for the Plan year and will be calculated based on whether actual performance with respect to specified metrics meets threshold levels, target levels, or maximum levels for those metrics. The Committee may assign weightings to each of these performance metrics. Threshold performance will pay out a specified percentage of the target award that is less than 100%; target performance will pay out the target award; and maximum performance will pay out a specified percentage of the target award that is greater than 100%. Where actual performance does not meet the threshold level for a particular metric, no award payout will be made with respect to that metric. Actual payouts for each performance metric will be pro-rated (linear interpolation) between threshold and target levels and target and maximum levels to reward incremental improvement. The performance metrics for a particular year and the threshold, target and maximum levels for those metrics will be established each year by the Committee and set forth in Appendix A to this Plan for such year.

8.Plan Trigger

The Committee may condition awards under the Plan for a particular year on whether actual performance meets a specified threshold level for one or more performance metrics, regardless of whether actual performance with respect to other performance metrics meets or exceeds the threshold levels for those metrics. For example, the Committee could determine that no awards will be paid for a particular year unless, for example, earnings per share for that year exceed 50% of the targeted earnings per share goal established by the Committee. Any performance trigger(s) for a Plan year will be stated in Appendix A to this Plan for such year.

9.Award Payouts

Awards for a Plan year will be paid as a cash bonus no later than March 15 following the end of the Plan year. Awards will be calculated based on actual performance relative to the target levels. Awards will be taxable income to participants in the year in which the award is actually 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 the Company. 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 the Company and its affiliates, on the one hand, and a participant or any other person, on the other hand. Nothing herein will be construed to require the Company to maintain any fund or to segregate any amount for a participant’s benefit.

2

Example
Below is an illustration for a hypothetical executive with a base salary of $125,000 and an incentive target of 20% of base salary ($25,000), where the performance metrics are return on average equity (ROAE) and various strategic initiatives. Goal weight and actual performance are provided for illustration only.

																					
	Participant Goals	Performance and Payout
	Performance Metric	Performance Goal threshold/target/maximum
	

Weight
	

$
	Actual Performance	Payout Allocation
(0% - 150%)
	   Payout ($)

	ROA	.84% / .93% /1.02%
	40%	$10,000	Threshold	50%	$5,000
	Strategic Initiative A	threshold/target/maximum	20%	$5,000	Target	100%	$5,000
	Strategic Initiative B	threshold/target/maximum	20%	$5,000	Maximum	150%	$7,500
	Strategic Initiative C	

threshold/target/maximum
	

20%
	

$5,000
	

Below Threshold
	

0%
	

$0

	TOTAL	100%	$25,000	70% payout	$17,500

The initial payout calculated formulaically above can be modified for a final payout between 0%-150% based on individual performance and/or other factors at the discretion of the Committee.

10.Adjustments

The Committee is authorized at any time before, during or after a Plan year, in its discretion, to adjust or modify the terms of Awards or Performance Goals, or specify new Awards, due to such factors as the Committee determines to be relevant, including but in no way limited to extraordinary items, transactions, events or developments, or in recognition of any other unusual, nonrecurring or infrequent events affecting the Company or the financial statements of the Company, or in response to changes in applicable laws, accounting principles, tax rates (and interpretations thereof), business conditions or the Committee's assessment of the business strategy of the Company, or due to any other specific unusual or infrequent events, in each case as determined by the Committee. 

11.Promotions and Transfers

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 award on a prorata basis (i.e. the award will be determined based on the number of months employed in each position.)

12.Termination of Employment

Except in the case of a termination due to a participant’s death, disability or retirement as discussed below, no award will be granted to any participant whose employment with the Company or one of its affiliates is terminated, except as may be required under any employment agreement between the Company and a Plan participant. 

13.Death, Disability or Retirement

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

3

In the event a participant’s employment is terminated due to death or disability (as defined in the Company’s long-term disability policy), the Company will pay to the participant’s estate or to the participant (as the case may be) the pro rata portion of the award that had been earned by the participant through the date of termination.

Participants who retire during the Plan year will receive a pro-rata portion of the award based on the retirement date. For purposes of the Plan, the term “retire” means a participant’s voluntary termination of his or her employment (other than by reason of death or disability) after (i) reaching 55 years of age and (ii) completing 5 years of service with the Company.

14.Clawback

In the event the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws or applicable accounting principles, then each participant who received an award under the Plan will be required to return to the Company his or her award to the extent the accounting restatement shows that a smaller award should have been paid; provided, however, that, notwithstanding the foregoing, no participant or former participant will be required to return any portion of any award to the extent it was paid more than three years prior to the date the Company determines that a restatement is required. To the extent a participant has deferred into a deferred compensation plan of the Company an amount that an accounting restatement shows should not have been awarded, such participant’s account under the deferred compensation plan will be adjusted to reflect such improperly-awarded amount (and earnings and losses thereon).

15.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 herein, the Company’s interpretation expressed by the Committee will be final and binding. It is the intent of the Company that this Plan and each award hereunder comply with the applicable provisions of Section 409A of the Internal Revenue Code, and the Plan shall be so interpreted and administered accordingly, including with respect to any restrictions or other limitations imposed by Section 409A of the Internal Revenue Code on the amount and timing of distributions payable under an award.                                                                                                       

The altering, inflating, and/or inappropriate manipulation of performance/financial results or any other infraction of recognized ethical business standards by a participant will subject that participant to disciplinary action up to and including termination of employment. In addition, that participant’s eligibility for an award under the Plan shall be revoked.

If it is determined by the Committee that a participant has willfully engaged or is willfully engaging in any activity that was or is injurious to the Company or its affiliates, then the participant shall forfeit eligibility for an award for the Plan year in which such determination is made. If it is determined that such activity occurred during a Plan year for which the participant received an award under the Plan, then, subject to any provision of the Company’s deferred compensation plan that does not permit the forfeiture of amounts deferred into such plan, the participant shall return the award to the Company.

4

16.Miscellaneous

The Plan will not be deemed to give any participant the right to be retained in the employ of the Company or any of its affiliates, nor will the Plan interfere with the right of the Company or an affiliate to discharge any participant at any time.

In the absence of a written employment agreement specifically identifying a contractual period of employment for a Plan participant, the relationship between a Plan participant and the Company and its affiliates is one of at-will employment.

This Plan and the transactions and payments hereunder shall, in all respects, be governed by, and construed and enforced in accordance with the laws of the State of California.

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.

5

Appendix A

Cash Incentive Plan 2021 Plan Year Targets and Goals

Incentive Targets

The incentive targets for the 2021 Plan year are set forth in the following table:

															
	2021 Short-Term Incentive Opportunities (% of Base Salary)
	Tier	Below Threshold	Threshold
(50% of Target)
	Target
(100%)
	Maximum
(150% of Target)

	CEO	0%	35%	70%	105%
	CFO	0%	27.5%	55%	82.5%
	COO	0%	27.5%	55%	82.5%
	CSO	0%	25%	50%	75%
	CCO	0%	15%	30%	45%
	CLO	0%	20%	40%	60%
	CHRO	0%	15%	30%	45%

Performance Goals

For Plan year 2021, the performance goals are based on return on average equity (ROAE), various strategic initiatives, and individual performance ratings.  

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00333-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00333-of-00352.parquet"}]]