Document:

Unassociated Document

Exhibit 10.07

 

[Arlington Asset Investment Corp. Letterhead]

 

[Date]

Name

Street Address

City, State Zip

Restricted Stock Award

Dear ________:

You have been granted a Restricted Stock Award pursuant and subject to the terms of the Arlington Asset Investment Corp. 2011 Long-Term Incentive Plan (the “Plan”).  The terms and conditions of your Restricted Stock Award are set forth in this letter and the Plan.  A copy of the Plan is available upon request.  All terms that are used in this letter have the same meaning as set forth in the Plan.

Grant Date.  The Restricted Stock Award was granted to you on ________ __, 20__ (the “Date of Grant”).

Award.  The Restricted Stock Award covers ____ Shares.

[Select Applicable Restriction Period Provision]

[Restriction Period.  The Restricted Stock Award will have a ___ year restriction period (the “Restriction Period”) beginning on the Date of Grant.  (The Restriction Period is the vesting or waiting period before you have full ownership of the Shares subject to the Restricted Stock Award.)  The Restriction Period will lapse ratably for an equal number of shares beginning on the first anniversary of the Date of Grant and continuing on each subsequent anniversary of the Date of Grant until the Restriction Period has lapsed with respect to all of the Shares subject to the Restricted Stock Award.]

 

[Restriction Period.  The Restricted Stock Award will have a ___ year restriction period (the “Restriction Period”) beginning on the Date of Grant.  (The Restriction Period is the vesting or waiting period before you have full ownership of the Shares subject to the Restricted Stock Award.)  The restrictions on all of the Shares subject to the Restricted Stock Award will lapse on the _____ anniversary of the Date of Grant.]

[Restriction Period.  The Restricted Stock Award will have a restriction period (the “Restriction Period”) that began on the Date of Grant.  (The Restriction Period is the vesting or waiting period before you have full ownership of the Shares subject to the Restricted Stock Award.)  The restrictions on the Shares subject to the Restricted Stock Award will lapse on the date, and to the extent that, [describe applicable performance vesting requirements and the number of Shares that will vest based on achievement of the performance vesting requirements]].

 

  

  

  

The Restriction Period may end sooner than the date described in the preceding paragraph as provided in the Plan, e.g., the Restriction Period may end upon a Change in Control.

Upon the lapse of the Restriction Period and satisfaction of your tax withholding obligation (as described in the “Tax Withholding section of the Plan), you will have full ownership rights in the vested Shares.

Dividend Payments and Voting Rights.  During the Restriction Period, any dividends declared by the Company will be paid on the Shares subject to your Restricted Stock Award, but any dividend payments will be treated as compensation reportable on your Form W-2.  Although you will not have full ownership rights, you will benefit from this provision of Share ownership.  During the Restriction Period you also will be entitled to vote the Shares subject to the Restricted Stock Award.

If You Leave the Company.  If your employment with the Company and its affiliates ends before the Restriction Period ends, you will forfeit the Shares subject to the Restricted Stock Award that have not previously vested, i.e., any Shares for which the Restriction Period has not lapsed.  As provided in the Plan, you may vest in some or all of the Shares subject to the Restricted Stock Award if your employment with the Company and its affiliates ends under certain circumstances including on account of your death, disability or retirement or termination as part of a reduction in force.

Transferability.  The Shares subject to the Restricted Stock Award and your rights under the Restricted Stock Award may not be sold, assigned, transferred or pledged during the Restriction Period, other than by will or the laws of descent and distribution.

Change in Capital Structure.  The terms of the Restricted Stock Award shall be adjusted as provided in the Plan in the event that the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidation of Shares or other similar changes in capitalization.

Plan Controls.  In the event of any conflict between the provisions of the Plan and this letter, the provisions of the Plan as in effect on the Date of Grant shall govern.  By signing this letter you agree to be bound by all of the terms and provisions of the Plan and acknowledge that a copy of the Plan has been made available to you.

No Employment Rights.  This letter and the grant of the Restricted Stock Award do not confer upon you any right with respect to continuance of employment with the Company or an affiliate and do not interfere with the right of the Company or an affiliate to terminate your employment.

 

  

  

  

Governing Law.  This letter and the Restricted Stock Award will be governed by the laws of the Commonwealth of Virginia other than those provisions of Virginia law that would require the application of the laws of another state.

Taxes.  You are strongly advised to consult your own tax professional concerning the tax implications of the Restricted Stock Award in your particular circumstances.  The Company cannot and does not provide you with tax advice.

Please contact _________________ at ___________ if you have any questions regarding the Restricted Stock Award.

You must sign the enclosed copy of this letter in the space provided below in order to accept the Restricted Stock Award.  The signed copy of this letter should be returned to ___________ at _______________________.

Sincerely,

Name

Title

Enclosure

Acceptance

I hereby accept the grant of the Restricted Stock Award in accordance with the terms and conditions set forth above and as prescribed by the Plan.

	Date:  	 	 	 	 
	 	 	 	[Name of Participant]ex10_08.htm

EXHIBIT 10.08

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made between Arlington Asset Investment Corp., a Virginia corporation (the “Company”), and [__________] (“Indemnitee”).

 

The Company and Indemnitee desire that Indemnitee serve or continue to serve as a director and/or an officer of the Company.  In view of the potential risks of personal liability to which Indemnitee may be exposed as a result of his service as a director and/or an officer of the Company, in view of the fact that the Amended and Restated Articles of Incorporation of the Company (“Articles of Incorporation”) require the Company to indemnify directors, and in order to induce Indemnitee to serve or continue to serve as a director and/or an officer of the Company, the Company desires and intends hereby to provide indemnification (including advancement of Expenses) against any and all liabilities asserted against Indemnitee in any and all Proceedings to the fullest extent permitted by the Virginia Stock Corporation Act.  For and in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

1.           Certain Definitions.  For purposes of this Agreement, the following definitions apply herein:

 

(a)           “Disinterested Directors” shall mean directors who are not, at the time, parties to the Proceeding for which indemnification is sought.

 

(b)           “Expenses” includes, without limitation, expenses of investigations, judicial or administrative proceedings or appeals, amounts paid in settlement by or on behalf of Indemnitee, attorneys’ fees, witness fees and expenses, excise taxes assessed on the Indemnitee with respect to any employee benefit plan, fees and expenses of accountants and other advisors, retainers and disbursements and advances thereon, and any amounts expended in asserting a claim for indemnification, but shall not include the amount of judgments, fines or penalties or other liabilities assessed against and incurred by Indemnitee or on Indemnitee’s behalf in connection with a Proceeding.

 

 

 

 

 

(c)           “Interested Directors” shall mean directors who are, at the time, parties to the Proceeding for which indemnification is sought.

 

(d)           “Proceeding” means any threatened, pending, or completed action, suit, proceeding or appeal, whether civil, criminal, administrative, or investigative and whether formal or informal, including proceedings by or in the right of the Company.

 

2.           Continued Service.  Indemnitee will serve and/or continue to serve faithfully and to the best of his ability, at the will of the Company or under separate contract, if such exists, as a director and/or an officer so long as he is duly elected and qualified to serve in accordance with the provisions of the Articles of Incorporation and Bylaws of the Company or until such time as he tenders his resignation and such resignation becomes effective; provided that nothing contained in this Agreement is intended to create any right to continued service as a director or employment by Indemnitee.

 

3.           Indemnification.  The Company shall indemnify Indemnitee as follows:

 

(a)           Except as provided under Section 3(d), the Company shall indemnify Indemnitee in the event that he is or was a party to or is or was threatened to be made a party to, or otherwise involved in, any Proceeding by reason of the fact that he is or was a director and/or an officer of the Company, or is or was serving the Company or any other legal entity (including any employee benefit plan) in any capacity at the request of the Company while a director and/or an officer, against all liabilities and Expenses incurred by him or on his behalf in connection with such Proceeding.  Indemnitee shall be eligible for indemnification for claims under this Section 3(a), subject to a determination of such eligibility in accordance with Section 4.  Indemnitee shall be indemnified to the fullest extent allowed by law except that no indemnification shall be provided to the extent that Indemnitee shall have been adjudged to be liable for willful misconduct or knowing violation of the criminal law in the performance of his duties or to the extent that indemnification otherwise is expressly prohibited by applicable law (including without limitation pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended).  Service as a director and/or an officer of a legal entity controlled, directly or indirectly, by the Company shall be deemed service at the request of the Company.  The termination of a Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere its equivalent shall not, of itself, create a presumption that a director or officer acted in such a manner as to make such director or officer ineligible for indemnification under this Section.  Without limiting the foregoing, the Company shall indemnify Indemnitee against all Expenses incurred by him in connection with a Proceeding to which he is or was a party because he is or was a director and/or an officer of the Company in which he entirely prevails in the defense.

 

 

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(b)           Any indemnification under Section 3(a) (unless otherwise ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination (in accordance with Section 4) that indemnification of Indemnitee is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 3(a).  Such indemnification shall be made within 5 days after the determination (in accordance with Section 4) that indemnification of the Indemnitee is proper.

 

(c)           Except as provided under Section 3(d), unless a determination has been made in accordance with Section 4 that the facts then known to those making the determination would not permit indemnification, Expenses incurred by Indemnitee in defending a Proceeding to which Indemnitee is or was a party or is or was threatened to be made a party by reason of the fact that he is or was a director and/or an officer of the Company, or is or was serving the Company or any other legal entity in any capacity at the request of the Company while a director and/or an officer, shall be paid by the Company in advance of the final disposition of such Proceeding within 30 days of the receipt by the Company of a written statement of request for advancement of Expenses (“Undertaking”) by Indemnitee averring that (i) he in good faith believes that he has met the standard of conduct required for indemnification set forth in Section 3(a), (ii) he has reasonably incurred or will reasonably incur such Expenses in defending the Proceeding, and (iii) he undertakes to repay such amount if it is ultimately determined that he is not entitled to be indemnified by the Company under this Agreement or otherwise.  The Undertaking shall be an unlimited, unsecured general obligation of Indemnitee and shall be accepted by the Company without reference to Indemnitee’s ability to make repayment.

 

 

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(d)           Notwithstanding anything to the contrary in this Agreement, the Company shall not be obligated to indemnify Indemnitee with respect to any liability or to pay or advance Expenses in any Proceeding commenced by Indemnitee against the Company, other than a Proceeding commenced to enforce a claim for indemnification or a claim for advancement of Expenses, unless, prior to the initiation of such Proceeding, the initiation of such Proceeding is approved by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors, or, if such quorum cannot be obtained, by a majority vote of a committee duly designated by the Board of Directors (in which designation Interested Directors may participate), consisting solely of two or more Disinterested Directors.

 

 

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(e)           The Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent.  The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on or disclosure obligation with respect to the Indemnitee without the Indemnitee’s written consent.  Neither the Company nor the Indemnitee will unreasonably withhold its consent to any proposed settlement.

 

(f)           The rights to indemnification and advancement of Expenses provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under any statute (including without limitation under Sections 13.1-698 and 13-700.1 of the Virginia State Corporation Act), articles of incorporation, bylaw, insurance policy, agreement, vote of shareholders or Disinterested Directors or otherwise, both as to action in his official capacity and as to action in another capacity while serving as a director and/or an officer, and shall continue after Indemnitee has ceased to be a director and/or an officer and whether or not he is serving in any such capacity at the time any liability or Expense is incurred, and shall inure to the benefit of his heirs, executors and administrators.

 

4.           Determination of Right to Indemnification.

 

(a)           For purposes of making the determination in a specific case under Section 3 whether indemnification is permissible, the determination, in the case of an Indemnitee who at any time relevant to the Proceeding to which the claim for indemnification or Expenses relates, served as a member of the Board of Directors, shall be made in one of the following manners:

 

 

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(i)           By the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors, provided that, if such quorum cannot be obtained, the determination will be made by a majority vote of a committee duly designated by the Board of Directors (in which designation Interested Directors may participate), consisting solely of two or more Disinterested Directors; or

 

(ii)          By a special legal counsel selected by:  (A) a quorum of the Board of Directors consisting of Disinterested Directors or a committee formed in accordance with paragraph (i); or (B) if a quorum of the Board of Directors consisting of Disinterested Directors cannot be obtained and a committee as described in paragraph (i) cannot be formed, by a majority vote of the full Board of Directors; or

 

(iii)         By the shareholders, provided that shares owned or voted under the control of Interested Directors may not be voted on the determination.

 

(b)          For purposes of making the determination in a specific case under Section 3 whether indemnification is permissible, the determination, in the case of an Indemnitee who has not at any time relevant to the Proceeding to which the claim for indemnification or Expenses relates, served as a member of the Board of Directors, shall be made as authorized from time to time by general or specific action of the Board of Directors, which action may be taken before or after a claim for indemnification is made.

 

(c)           For the purposes of making the determination under Section 4(a) and 4(b), if a majority of the directors of the Corporation has changed after the date of the alleged conduct giving rise to such a claim for indemnification, such determination and evaluation shall, at the option of the person claiming indemnification or Expenses, be made by special legal counsel selected by such person and subject to the approval of the Board of Directors, which approval shall not be unreasonably withheld.

 

 

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(d)           The special legal counsel may be outside counsel currently or previously employed by the Company, provided that such counsel (i) has not provided legal services to Indemnitee, (ii) does not regularly advise the directors or senior management of the Company with respect to their actions, duties and responsibilities and (iii) has not provided legal services to the Company or Indemnitee with respect to the transaction or matter out of which the Proceeding arose.

 

(e)           The reasonableness of Expenses may be determined in accordance with this Section 4.

 

5.           Notice and Other Indemnification Procedures.

 

(a)           Promptly after receipt by Indemnitee of notice of the commencement of or the threat of commencement of any Proceeding, Indemnitee shall, if Indemnitee believes that indemnification with respect thereto may be sought from the Company and Indemnitee wishes to seek such indemnification, submit to the Board of Directors a written statement requesting indemnification (the “Indemnification Statement”), averring that he has met the applicable standard of conduct set forth in Section 3(a).  Failure to submit an Indemnification Statement shall not prevent Indemnitee from claiming indemnification under this Agreement, unless such failure irreparably impairs the Company’s ability to defend Indemnitee in the Proceeding.

 

(b)           Submission of the Indemnification Statement to the Board of Directors shall create a rebuttable presumption that Indemnitee is entitled to indemnification under this Agreement.  If the determination as to whether indemnification is permissible is to be made by the Disinterested Directors or by special legal counsel, the Disinterested Directors and special legal counsel as the case may be, shall within 60 days after submission of the Indemnification Statement specifically determine that Indemnitee is so entitled, unless it or they make a determination that the Indemnification Statement is with respect to a matter as to which indemnification is not permissible under Section 3(a) (any such matter, an “Excluded Claim”).  If the determination as to whether indemnification is permissible is to be made by the shareholders, the shareholders shall within 120 days after submission of the Indemnification Statement specifically determine that Indemnitee is so entitled, unless it or they make a determination that the Indemnification Statement is with respect to an Excluded Claim.  If the Disinterested Directors or special legal counsel shall have failed to make such determination within 60 days after receipt by the Company of such request, or the shareholders have failed to make such determination within 120 days, the requisite determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification, or unless and until a court shall have determined that such liability relates to an Excluded Claim.

 

 

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(c)           If, at the time of the receipt of an Indemnification Statement, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement of any Proceeding to the insurers in accordance with the procedures set forth in the D&O Insurance policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

(d)           In the event the Company shall be obligated to indemnify or pay the Expenses of any Proceeding against Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of such Proceeding upon the delivery to Indemnitee of written notice of its election so to do, with counsel selected by the Company and approved by Indemnitee, which consent shall not be unreasonably withheld.  After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee shall have the right to employ his own counsel in any such Proceeding at Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company shall not, in fact, have employed counsel to assume the defense of such Proceeding, the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.  Subject to Section 3(e), Indemnitee shall cooperate with all reasonable requests of the Company (at the Company’s expense) in defending or settling a claim.

 

 

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6.           Partial Indemnification.  If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the costs, judgments, penalties, fines, liabilities or Expenses actually and reasonably incurred by him in connection with a Proceeding, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such costs, judgments, penalties, fines, liabilities and Expenses actually and reasonably incurred by him to which the Indemnitee is entitled.

 

7.           Expenses to Enforce Agreement.  In the event that the Indemnitee is a party to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication or award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, the Indemnitee, if he prevails in whole or in part in such action, shall be entitled to recover from the Company and shall be indemnified by the Company against any actual Expenses incurred by him.

 

8.           Liability Insurance.

 

(a)           The Company hereby covenants and agrees that, so long as Indemnitee shall continue to serve as a director and/or an officer of the Company, and thereafter so long as Indemnitee shall be subject to any possible Proceeding by reason of the fact that Indemnitee was a director and/or an officer of the Company, the Company, subject to Section 8(c), shall promptly obtain and maintain in full force and effect directors’ and officers’ liability insurance (“D&O Insurance”) in reasonable amounts from established and reputable insurers.

 

 

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(b)           In all policies of D&O Insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and/or officers.

 

(c)           Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain D&O Insurance if the Company determines in good faith that such insurance is not reasonably available, the premium costs for such insurance are disproportionate to the amount of coverage provided or the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit.

 

9.           Merger, Consolidation or Sale of Assets.  In the event that the Company shall be a constituent corporation in a consolidation or merger, whether the Company is the resulting or surviving corporation or is absorbed, Indemnitee shall stand in the same position under this Agreement with respect to the resulting, surviving or changed corporation as he would have with respect to the Company if its separate existence had continued.  The Board of Directors of the Company shall use its best efforts to make any sale or transfer of substantially all of the assets of the Company contingent upon the acquiring party or a parent of the acquiring party expressly assuming or guaranteeing the Company’s obligations under this Agreement.

 

10.         Subrogation.  In the event of payment under this Agreement or pursuant to Article 7.3 of the Company’s Articles of Incorporation, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

 

 

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11.         Severability.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected.

 

12.         Governing Law and Consent to Jurisdiction.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to its conflict of laws rules.  The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the Commonwealth of Virginia for all purposes in connection with any action or Proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in the state courts of the Commonwealth of Virginia.

 

13.         Modification, Survival.  This Agreement may be modified only by an instrument in writing signed by both parties hereto.  The provisions of this Agreement shall survive the termination of Indemnitee’s service as a director and/or an officer of the Company.

 

14.         Successors and Assigns.  This Agreement shall be binding upon all successors and assigns of the Company and any successors by merger or otherwise by operation of law, and shall be binding upon and inure to the benefit of the heirs, executors and administrators of Indemnitee.

 

15.         Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one and the same instrument.

 

 

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16.         Headings; References; Pronouns.  The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.  References herein to Section numbers are to Sections of this Agreement.  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as appropriate.

 

17.         Notices.  All notices, requests, demands or other communications hereunder shall be in writing and shall be deemed to have been duly given and received (i) if delivered by hand, on the date so delivered, or (ii) if sent by overnight courier, on the next business day after being so sent, or (iii) if sent by facsimile, on the day so sent:

 

	 	
(a)

	
If to the Indemnitee, to:

	
[________________]

	 	  	  	
[________________]

	 	  	  	
[________________]

	 	  	  	
[________________]

	 	  	  	
[________________]

	 	  	  	Facsimile number: [________________]
	 	 	 	 
	 	
(b)

	
If to the Company, to:

	
Arlington Asset Investment Corp.

	 	  	  	
1001 Nineteenth Street North

	 	  	  	
Arlington, VA 22209

	 	  	  	
Attn:  [________________]

	 	  	  	
Facsimile number:  [________________]

 

or to such other address as may be furnished to the Indemnitee by the Company or to the Company by the Indemnitee, as the case may be.

 

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as of the [____] day of [_________], 20[__].

	  	  	 	
ARLINGTON ASSET INVESTMENT CORP.

	 
	  	  	 	  	  	 
	
Attest:

	
/s/

	 	
By:

	  	 
	  	  	 	  	
Name:

	 
	  	  	 	  	
Title:

	 
	  	  	 	  	  	 
	  	  	 	
INDEMNITEE

	 
	  	  	 	  	  	 
	  	  	 	  	 

 

 

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