Document:

Exhibit 10.3

 

WALKER & DUNLOP, INC.

2010 EQUITY INCENTIVE PLAN

 

PERFORMANCE STOCK UNIT AGREEMENT

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants performance stock units relating to shares of its common stock, par value $0.01 per share (the “Stock”) to the Participant named below, subject to the achievement of performance goals and vesting conditions set forth in the attached Performance Stock Unit Agreement (the “Agreement”). Additional terms and conditions of the grant are set forth on this cover sheet to the Agreement and in the Agreement and the Company’s 2010 Equity Incentive Plan (as amended from time to time, the “2010 Plan”).

 

Participant Name:

 

Grant Date:

 

Threshold Number of Performance Stock Units:

 

Target Number of Performance Stock Units:

 

Maximum Number of Performance Stock Units:

 

By your signature below, you agree to all of the terms and conditions described in the Agreement and in the 2010 Plan, copies of which will be provided on request. You acknowledge that you have carefully reviewed the 2010 Plan, and agree that the 2010 Plan will control in the event any provision of this cover sheet or Agreement should appear to be inconsistent.

 

	
Participant:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
(Signature)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Company:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
(Signature)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    

 

Attachment

 

This is not a stock certificate or a negotiable instrument.

 

 

WALKER & DUNLOP, INC.

2010 EQUITY INCENTIVE PLAN

 

PERFORMANCE STOCK UNIT AGREEMENT

 

	
Performance   Stock Units
    	
 
    	
This   Agreement evidences an award of performance stock units in the number set   forth on the cover sheet and subject to the terms and conditions set forth in   the Agreement and the 2010 Plan (the “Performance Stock Units”).

 

Subject   to satisfaction of the time-based vesting requirement set forth below, the   number of shares of Stock, if any, that may be issued pursuant to the terms   of this Agreement will be calculated based on the attainment, as determined   by the Committee, of the performance goals described in Exhibit A   to this Agreement (the “Performance Goals”)   over the period beginning on                            and ending on                            (the “Performance Period”), which   number of shares of Stock may be equal to all or a portion, including none,   of the Maximum Number of Performance Stock Units set forth on the cover   sheet. If the Performance Goals are not achieved during the Performance   Period, you will forfeit all of your unvested Performance Stock Units as of   the end of the Performance Period, except as otherwise provided in this   Agreement.
    
	
 
    	
 
    	
 
    
	
Performance   Stock Unit Transferability
    	
 
    	
Your   Performance Stock Units may not be sold, assigned, transferred, pledged,   hypothecated, or otherwise encumbered, whether by operation of law or   otherwise, nor may the Performance Stock Units be made subject to execution,   attachment or similar process. If you attempt to do any of these things, you   will immediately forfeit your Performance Stock Units.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
Your   Performance Stock Units will vest on the date the Committee certifies the   achievement of the Performance Goals following the close of the Performance   Period (the “Certification Date”), and   subject to your continued Service from the Grant Date through the   Certification Date, but only to the extent that the Performance Goals have   been satisfied. Promptly following the completion of the Performance Period   (and no later than 75 days following the end of the Performance Period), the   Committee will review and certify in writing (i) whether, and to what   extent, the Performance Goals for the Performance Period have been achieved,   and (ii) the number of Performance Stock Units that will vest. Such   certification will be final, conclusive and binding. Notwithstanding the   foregoing or anything in this Agreement to the contrary, the Committee   reserves the right to adjust the number of Performance Stock Units that will   vest based on the achievement of the Performance Goals downward, including to   zero, in its sole discretion. You will forfeit to the Company all of the   unvested Performance Stock Units to the extent the specified Performance   Goals have not been achieved, as determined by the Committee, effective as of   the Certification Date.
    
	
 
    	
 
    	
 
    
	
Vesting   upon Termination of Service
    	
 
    	
Death   or Disability. If your Service terminates during the   Performance Period as a result of your death or Disability, your Performance   Stock Units will vest as to the Target Number of Performance Stock Units set   forth on the cover sheet on the effective date of your termination of   Service. If your Service terminates following the end of the Performance   Period but prior to the Certification Date, your Performance Stock Units will   vest to the extent that 
    

 

2

 

	
 
    	
 
    	
the   Performance Goals have been satisfied as if your Service had not terminated, effective   as of the Certification Date. 

 

Termination   without Cause or for Good Reason. If your Service   terminates prior to the Certification Date because of your involuntary   termination of Service by the Company without Cause or your voluntary   termination for Good Reason (as defined below), you will vest in a pro rata   portion of the Performance Stock Units that vest to the extent that the   Performance Goals have been satisfied as if your Service had not terminated,   which pro rata portion will be calculated by multiplying the total number of   the Performance Stock Units that vest based on actual performance by a   fraction, the numerator of which equals the number of days that you provided   Service during the Performance Period and the denominator of which equals the   total number of days in the Performance Period, effective as of the   Certification Date. 

 

Other   Terminations. If, prior to the Certification Date, you incur a   termination of Service for any reason other than those specified above,   whether voluntary or involuntary and prior to a Change in Control, you will   forfeit to the Company all of the unvested Performance Stock Units on the   date of your termination of Service. 

 

For   purposes of this Agreement, unless otherwise provided in an applicable   agreement with the Company, “Good Reason”   for termination will mean, without your consent: (i) the assignment to   you of substantial duties or responsibilities inconsistent with your position   at the Company, or any other action by the Company that results in a substantial   diminution of your duties or responsibilities other than any such reduction   that is remedied by the Company within 30 days of receipt of written notice   thereof from you; (ii) a requirement that you work principally from a   location that is 35 miles further from your residence than your principal   place of employment as of the Date of Grant; (iii) a ten percent or   greater reduction in your aggregate base salary and other compensation   (including any target bonus amount and/or retirement plan, welfare plans and   fringe benefits) taken as a whole, excluding any reductions caused by the   failure to achieve performance targets; or (iv) any material breach by   the Company of your employment agreement, if any. Good Reason will not exist   pursuant to any subsection in the foregoing sentence unless (A) you have   delivered written notice to the Company within 90 days of the occurrence of   the event constituting Good Reason, and (B) the Company fails to remedy   the circumstances giving rise to your notice within 30 days of receipt of   notice. In addition, you must terminate your employment for Good Reason at a   time agreed reasonably with the Company, but in any event within 150 days   from the occurrence of the event constituting Good Reason. For purposes of   Good Reason, the Company will be defined to include any successor to the   Company that has assumed the obligations of the Company through merger,   acquisition, stock purchase, asset purchase or otherwise.
    
	
 
    	
 
    	
 
    
	
Change   in Control
    	
 
    	
Notwithstanding   the vesting schedule set forth above, upon the consummation of a Change in   Control during the Performance Period, you will vest in a number of   Performance Stock Units equal to the greater of (i) the number of   Performance Stock Units that would vest based on pro rata actual performance   of the Performance Goals as of a date reasonably proximal to the date of the 
    

 

3

 

	
 
    	
 
    	
consummation   of the Change in Control, as determined by the Committee in its sole   discretion, and that level of performance will be treated as achieved   immediately prior to the Change in Control, or (ii) the Target Number of   Performance Stock Units set forth on the cover sheet. Notwithstanding the   foregoing, if the Company achieves Return on Equity (as defined below) during   the Performance Period of   [          ], as of a date   reasonably proximal to the date of the consummation of the Change in Control,   as determined by the Committee in its sole discretion, the Maximum Number of   Performance Stock Units will vest.

 

For   purposes of this agreement “Return on Equity”   means the Company’s net income, as reported in the Company’s audited   financial statements, divided by the average common stockholders’ equity,   determined in accordance with U.S. generally accepted accounting principles   (“U.S. GAAP”). Net income and   average common stockholders’ equity will be adjusted to exclude any amounts   that are generally required to be reported separately under U.S. GAAP as   Extraordinary Items (as described in Exhibit A).
    
	
 
    	
 
    	
 
    
	
Delivery
    	
 
    	
Delivery   of the shares of Stock represented by your vested Performance Stock Units   will be made as soon as practicable after the date on which your Performance   Stock Units vest and, in any event, by no later than March 15th of the   calendar year after your Performance Stock Units vest.
    
	
 
    	
 
    	
 
    
	
Evidence   of Issuance
    	
 
    	
The   issuance of the shares of Stock with respect to the Performance Stock Units   will be evidenced in such a manner as the Company, in its discretion, deems   appropriate, including, without limitation, book-entry, registration or   issuance of one or more share certificates.
    
	
 
    	
 
    	
 
    
	
Withholding
    	
 
    	
In   the event that the Company or an Affiliate determines that any federal,   state, local or foreign tax or withholding payment is required relating to   this grant of Performance Stock Units, or the issuance of shares of Stock   with respect to this grant, the Company or an Affiliate will have the right   to (i) require you to tender a cash payment, (ii) deduct from   payments of any kind otherwise due to you, (iii) permit or require you   to enter into a “same day sale” commitment with a broker-dealer that is a   member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you   irrevocably elect to sell a portion of the shares of Stock to be delivered in   connection with the Performance Stock Units to satisfy withholding   obligations and whereby the FINRA Dealer irrevocably commits to forward the   proceeds necessary to satisfy the withholding obligations directly to the   Company or an Affiliate, or (iv) withhold the delivery of vested shares   of Stock otherwise deliverable under this Agreement to meet such obligations;   provided that the shares of Stock so   withheld will have an aggregate Fair Market Value not exceeding the minimum   amount of tax required to be withheld by applicable law.
    
	
 
    	
 
    	
 
    
	
Notice   and Non-Solicitation
    	
 
    	
The   following notice and non-solicitation provisions will apply to you unless you   have entered into an applicable employment agreement with the Company or any   Affiliate that has more restrictive notice and non-solicitation provisions   (in which case, the more restrictive provisions in such employment agreement   will apply). 
    

 

4

 

	
 
    	
 
    	
You   agree as a condition of this grant that in the event you decide to leave the   Company or an Affiliate for any reason, you will provide the Company or the   Affiliate with 30 days’ prior notice of your departure (during which period,   in the Company’s or its Affiliate’s sole discretion, you may be placed on   paid leave) and you will not commence employment with anyone else during that   period. For a period of 90 days following the termination of your employment   for any reason, you will not directly or indirectly solicit any employees of   the Company or its Affiliates for employment, or encourage any employee to   leave the Company or an Affiliate.
    
	
 
    	
 
    	
 
    
	
Retention   Rights
    	
 
    	
This   Agreement and the grant of Performance Stock Units evidenced by this   Agreement do not give you the right to be retained by the Company or any   Affiliate in any capacity. Unless otherwise specified in an employment or   other written agreement between the Company or any Affiliate, as applicable,   and you, the Company or any Affiliate, as applicable, reserves the right to   terminate your service with the Company or an Affiliate at any time and for   any reason.
    
	
 
    	
 
    	
 
    
	
Stockholder   Rights
    	
 
    	
You   do not have any of the rights of a stockholder with respect to the   Performance Stock Units unless and until the Stock relating to the   Performance Stock Units has been delivered to you.
    
	
 
    	
 
    	
 
    
	
Clawback
    	
 
    	
The   Performance Stock Units are subject to mandatory repayment by you to the   Company to the extent you are or in the future become subject to any Company   “clawback” or recoupment policy that requires the repayment by you to the   Company of compensation paid by the Company to you in the event that you fail   to comply with, or violate, the terms or requirements of such policy.

 

If   the Company is required to prepare an accounting restatement due to the   material noncompliance of the Company, as a result of misconduct, with any   financial reporting requirement under the securities laws, and you are   subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley   Act of 2002 or you knowingly engaged in the misconduct, were grossly   negligent in engaging in the misconduct, knowingly failed to prevent the   misconduct or were grossly negligent in failing to prevent the misconduct,   you will reimburse the Company the amount of any payment in settlement of the   Performance Stock Units earned or accrued during the 12-month period following   the first public issuance or filing with the Securities and Exchange   Commission (whichever first occurred) of the financial document that   contained such material noncompliance.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced under the laws of the State of   Maryland, other than any conflicts or choice of law rule or principle   that might otherwise refer construction or interpretation of this Agreement   to the substantive law of another jurisdiction.
    
	
 
    	
 
    	
 
    
	
The   2010 Plan
    	
 
    	
The   text of the 2010 Plan is incorporated into this Agreement by reference. 

 

Certain capitalized terms used in this Agreement are defined in the   2010 Plan, and have the meaning set forth in the 2010 Plan. 
    

 

5

 

	
 
    	
 
    	
This   Agreement and the 2010 Plan constitute the entire understanding between you   and the Company regarding this grant of Performance Stock Units. Any prior   agreements, commitments or negotiations concerning this grant are superseded.
    
	
 
    	
 
    	
 
    
	
Data   Privacy
    	
 
    	
To   administer the 2010 Plan, the Company may process personal data about you.   Such data includes, but is not limited to, information provided in this   Agreement and any changes to such information, other appropriate personal and   financial data about you such as your contact information, payroll   information and any other information that might be deemed appropriate by the   Company to facilitate the administration of the 2010 Plan.

 

By   accepting this grant, you give explicit consent to the Company to process any   such personal data.
    
	
 
    	
 
    	
 
    
	
Disclaimer   of Rights
    	
 
    	
The   grant of Performance Stock Units under this Agreement will in no way be   interpreted to require the Company to transfer any amounts to a third party   trustee or otherwise hold any amounts in trust or escrow for payment to you.   You will have no rights under this Agreement or the 2010 Plan other than   those of a general unsecured creditor of the Company. Performance Stock Units   represent unfunded and unsecured obligations of the Company, subject to the   terms and conditions of the 2010 Plan and this Agreement.
    
	
 
    	
 
    	
 
    
	
Code   Section 409A
    	
 
    	
The   grant of Performance Stock Units under this Agreement is intended to comply   with Section 409A to the extent subject thereto, and, accordingly, to   the maximum extent permitted, this Agreement will be interpreted and   administered to be in compliance with Section 409A. Notwithstanding   anything to the contrary in the 2010 Plan or this Agreement, neither the   Company, its Affiliates, the Board nor the Committee will have any obligation   to take any action to prevent the assessment of any excise tax or penalty on   you under Section 409A and neither the Company, its Affiliates, the   Board nor the Committee will have any liability to you for such tax or   penalty.

 

To   the extent that the Performance Share Units constitute “deferred   compensation” under Section 409A, a termination of Service occurs only   upon an event that would be a “separation from service” within the meaning of   Section 409A. If, at the time of your separation from service, (1) you   are a “specified employee” within the meaning of Section 409A, and   (2) the Company makes a good faith determination that an amount payable   on account of your separation from service constitutes deferred compensation   (within the meaning of Section 409A), the payment of which is required   to be delayed pursuant to the six-month delay rule set forth in   Section 409A to avoid taxes or penalties under Section 409A (the   “Delay Period”), then the Company will not pay such amount on the otherwise   scheduled payment date but will instead pay it in a lump sum on the first   business day after the Delay Period (or upon your death, if earlier), without   interest. Each installment of Performance Share Units that vest under this   Agreement (if there is more than one installment) will be considered one of a   series of separate payments for purposes of Section 409A.
    

 

By signing this Agreement, you agree to all of the terms and conditions described above and in the 2010 Plan.

 

6Exhibit 10.7

 

WALKER & DUNLOP, INC.

MANAGEMENT DEFERRED STOCK UNIT PURCHASE PLAN

 

1.                                      INTRODUCTION

 

(a)                                 Adoption of the Plan. The Board of Directors (the “Board”) of Walker & Dunlop, Inc. (the “Company”) adopted the Company’s Management Deferred Stock Unit Purchase Plan (the “Plan”) effective January 10, 2013 (the “Effective Date”) to facilitate the purchase of shares of common stock of the Company, par value $0.01 per share (the “Stock”) by eligible executives of the Company and its Affiliates. “Affiliate” means, with respect to the Company, any company or other trade or business that contracts, is controlled by or is under common control with the Company within the meaning of Regulation 405 of Regulation C under the Securities Act of 1933, as amended (the “Securities Act”).

 

(b)                                 Overview of the Plan. Eligible executives are given the opportunity to purchase shares of Stock with a portion of their annual incentive bonus (the “Bonus”). Delivery of the Stock is delayed to the payment date elected by the eligible executives, as further described below, but the executive’s right to receive the Stock is fully vested and non-forfeitable. It is intended that the portion of the Bonus used to purchase Stock would not be taxable for income tax purposes when the purchase is made. Instead, income taxation would be deferred to the date of delivery of the Stock, as elected by the executive. Each eligible executive who makes a purchase would therefore receive Deferred Stock Units (as defined below) in lieu of a portion of his or her Bonus. Each “Deferred Stock Unit” is a right to receive one share of Stock, which provides for delivery of the underlying share of Stock at a future date consistent with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and all regulations, guidance and other interpretive authority issued thereunder (collectively, “Section 409A”).

 

(c)                                  Summary. This document is the Plan document and part of the prospectus for the Plan. The Plan is first applicable with respect to Bonuses to be earned for calendar year 2013.

 

(d)                                 Applicable Law. The Plan is not a qualified retirement plan under Section 401(a) of the Code and it is not subject to any provision of the Employee Retirement Income Security Act of 1974.

 

2.                                      ADMINISTRATION; AMENDMENT AND TERMINATION

 

(a)                                 The Committee. The Plan will be administered under the supervision of the Compensation Committee of the Board (the “Committee”). The Committee will prescribe guidelines and forms for the implementation and administration of the Plan, interpret the terms of the Plan and make all other substantive decisions regarding the operation of the Plan. The Committee’s decisions in its administration of the Plan are conclusive and binding on all persons.

 

(b)                                 Amendment and Termination. The Board may amend, suspend or terminate the Plan at any time and for any reason. No amendment, suspension or termination will, without the consent of the Participant (as defined below), impair rights or obligations under any Deferred Stock Units previously awarded to the Participant under the Plan.

 

3.                                      PARTICIPATION

 

An employee of the Company or an Affiliate is eligible to participate in the Plan if (a) the employee is designated as an “officer” for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, or (b) the employee is both (i) a member of a select group of management or a highly 

 

1

 

compensated employee under Section 201 of the Employee Retirement Income Security Act of 1974, as amended, and (ii) designated by the Company’s Chief Executive Officer as eligible to participate in the Plan. An eligible executive of the Company or an Affiliate becomes a participant in the Plan (a “Participant”) if the Company notifies the executive of his or her eligibility to participate in the Plan and the executive properly files a completed Bonus Deferral Election Agreement (the “Election Agreement”) with the Company, in a form prescribed by the Committee, during the Open Enrollment Period (as defined below). For purposes of the Plan, “Open Enrollment Period” means (A) for calendar year 2013, the period of time beginning on February 1, 2013 and ending on February 28, 2013 and (B) for calendar years after 2013, the period of time beginning on December 1 and ending on December 31 of the calendar year preceding the calendar year for which a Bonus is earned. The “Election Date” is the last day of the Open Enrollment Period of the applicable calendar year.

 

4.                                      SHARE RESERVE

 

(a)                                 Number of Shares Available. Subject to adjustment as provided in Section 4(b), the number of shares of Stock available for issuance under the Plan is 530,000.  Shares of Stock to be issued under the Plan will be shares acquired on the open market or newly issued shares of the Company.

 

(b)                                 Changes in Stock. If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number or kind of stock or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of stock, exchange of stock, stock dividend or other distribution payable in capital stock, or other increase or decrease in such stock effected without receipt of consideration by the Company occurring after the Effective Date, the Committee will make appropriate adjustments to (i) the number and kind of shares of Stock for which Deferred Stock Units may be granted under the Plan; (ii) the number and kind of shares of Stock for which Deferred Stock Units are outstanding; and (iii) the number of Deferred Stock Units credited to each Participant’s Account (as defined below).

 

5.                                      DEFERRAL ELECTIONS

 

(a)                                 Deferrals. Each Participant may voluntarily elect to receive up to 75% of his or her Bonus in Deferred Stock Units, subject to any conditions and limitations the Committee determines. The Participant will make the election to receive a portion of his or her Bonus in Deferred Stock Units by filing a completed Election Agreement on or before the Election Date of the calendar year for which a Bonus is earned. A Participant’s election to defer a portion of his or her Bonus and receive Deferred Stock Units is irrevocable and may not be changed.

 

(b)                                 New Participants. If the Participant was not previously eligible to participate in the Plan or any plan that must be aggregated with the Plan for purposes of Section 409A, the Participant may elect to defer a portion of his or her Bonus for the calendar year. The Participant’s initial Election Agreement must be filed with the Company within 30 days after the date on which the Participant is notified that he or she is eligible to participate in the Plan. The initial deferral election will be, for the remainder of the then-current calendar year, prorated based on the number of days remaining in the calendar year after the date the Election Agreement is filed with the Company, compared to the total number of days in the calendar year.

 

6.                                      AWARD OF DEFERRED STOCK UNITS

 

(a)                                 Crediting Participant Accounts. On the date that the Bonus is paid (the “Award Date”), the Company will credit a bookkeeping account established and maintained for each Participant (an 

 

2

 

“Account”) with the number of Deferred Stock Units determined by dividing (i) the portion of the Bonus that the Participant elected to defer (not to exceed 75% of such Bonus), by (ii) the Fair Market Value (as defined below) of a share of Stock on such date. For purposes of the Plan, “Fair Market Value” will be determined under the same methodology reflected in the Company’s 2010 Equity Incentive Plan, as may be amended from time to time (the “2010 Plan”).

 

(b)                                 Fractional Shares. No fractional Deferred Stock Units will be credited to a Participant’s Account. Unused cash attributable to a fractional Deferred Stock Unit will be refunded to the Participant, in cash, as soon as practicable following the Award Date.

 

(c)                                  Vesting of Deferred Stock Units. A Participant will be fully vested in each Deferred Stock Unit credited to the Participant’s Account at all times.

 

(d)                                 Distribution Election; Issuance of Shares. Each Participant may specify a distribution date with respect to the Deferred Stock Units (the “Distribution Date”). The election of such Distribution Date will be specified in the Election Agreement with the Company. Any election of a Distribution Date with respect to the Deferred Stock Units is irrevocable as of the Election Date. The Distribution Date specified in the Election Agreement will be either:

 

(i)                                     January 31 of the year immediately following the date of the Participant’s “separation from service” from the Company or an Affiliate, as applicable, within the meaning of Section 409A (the “Separation from Service” and this election, the “Termination Date Election”);

 

(ii)                                  the first to occur of the following: (A) March 15 of the third calendar year following the Award Date and (B) January 31 of the year immediately following the date of the Participant’s Separation from Service (this election, the “Vesting Date Election”); or

 

(iii)                               the first to occur of the following: (A) January 31 of the fifth or tenth, as elected by the Participant, calendar year after the Award Date and (B) January 31 of the year immediately following the date of the Participant’s Separation from Service (this election, the “Deferred Distribution Date Election”).

 

The Company will issue to the Participant one share of Stock for each Deferred Stock Unit on the Distribution Date. Notwithstanding anything to the contrary in the Plan, if on the date of the Participant’s Separation from Service, the Participant is a “specified employee” within the meaning of Section 409A, the shares will be issued on the later to occur of (A) the scheduled Distribution Date and (B) the first day of the seventh month following the date of the Participant’s Separation from Service or, if earlier, the date of the Participant’s death.

 

(e)                                  Change in Control.

 

(i)                                     The Plan and Deferred Stock Units that are outstanding will continue in the manner and under the terms so provided in the event of any Change in Control (as defined below) to the extent that provision is made in writing in connection with such Change in Control for the assumption or continuation of the Deferred Stock Units or for the substitution for the Deferred Stock Units for new common stock units relating to the stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares underlying the award (disregarding any consideration that is not common stock).

 

3

 

(ii)                                  Upon the occurrence of a Change in Control (as defined below) in which outstanding Deferred Stock Units are not being assumed or continued, shares of Stock subject to such Deferred Stock Units will be delivered immediately prior to the occurrence of the Change in Control.

 

For purposes of the Plan, “Change in Control” will have the same meaning as defined in the 2010 Plan. Notwithstanding the foregoing, for purposes of the Plan, in no event will a Change in Control be deemed to have occurred if the transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).

 

(f)                                   Award Agreements. Each award of Deferred Stock Units granted under the Plan will be evidenced by a written agreement between the Company and the Participant memorializing the terms and conditions of the Deferred Stock Units (an “Award Agreement”).

 

7.                                      ISSUANCE OF SHARES OF STOCK DUE TO UNFORESEEABLE EMERGENCY

 

(a)                                 Request for Issuance. If a Participant suffers an Unforeseeable Emergency (as defined below), he or she may submit a written request to the Committee for the issuance of the shares of Stock underlying the Deferred Stock Units in the Participant’s Account. For purposes of the Plan, “Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent; (ii) a loss of the Participant’s property due to casualty; or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, as determined in the sole discretion of the Committee and in accordance with the requirements of Section 409A.

 

(b)                                 No Payment if Other Relief is Available. The Committee will evaluate the Participant’s request for payment due to an Unforeseeable Emergency taking into account the Participant’s and the requirements of Section 409A. In no event will shares of Stock be issued under this Section 7 to the extent the Participant’s hardship can be relieved: (i) through reimbursement or compensation by insurance or otherwise; or (ii) by liquidation of the Participant’s assets, to the extent that liquidation of the Participant’s assets would not itself cause severe financial hardship.

 

(c)                                  Limitation on Issuance of Shares of Stock. The number of shares of Stock issued on account of an Unforeseeable Emergency will not exceed the amount reasonably necessary to satisfy the Participant’s financial need, including amounts necessary to pay any federal, state, local or foreign taxes or penalties reasonably anticipated to result from the issuance of shares of Stock, as determined by the Committee.

 

(d)                                 Cancellation of Deferrals. If a Participant receives an issuance of shares of Stock on account of an Unforeseeable Emergency, the Participant’s Election Agreement for the Election Date in the same calendar year as the date of such issuance will be cancelled and no deferrals will be made with respect to such Election Agreement.

 

8.                                      BENEFICIARY DESIGNATION

 

In the event of a Participant’s death, the Company will issue the shares of Stock underlying the Deferred Stock Units in the Participant’s Account to the Participant’s designated beneficiaries. If the  Participant fails to complete a valid beneficiary designation, the Participant’s beneficiary will be his or her estate.

 

4

 

9.                                      TRANSFERABILITY

 

During a Participant’s lifetime, any issuance of shares of Stock under the Plan will be made only to the Participant. Deferred Stock Units may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Deferred Stock Units be made subject to execution, attachment or similar process.

 

10.                               WITHHOLDING

 

In the event that the Company or an Affiliate determines that any federal, state, local or foreign tax or withholding payment is required relating to the award of Deferred Stock Units under the Plan or the issuance of shares with respect to Deferred Stock Units under the Plan, the Company or an Affiliate will have the right to (a) require the Participant to tender a cash payment; (b) deduct from payments of any kind otherwise due to a Participant; (c) permit or require the Participant to enter into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby the Participant irrevocably elects to sell a portion of the shares of Stock to be delivered in connection with the Deferred Stock Units to satisfy withholding obligations and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the withholding obligations directly to the Company or an Affiliate; or (d) withhold the delivery of shares of Stock otherwise deliverable to a Participant under the Plan to meet such obligations; provided, that shares of Stock so withheld will have an aggregate Fair Market Value not exceeding the minimum amount of tax required to be withheld by applicable law.

 

11.                               FORFEITURE; RECOUPMENT; CLAWBACK

 

(a)                                 The Committee may reserve the right in an Award Agreement to cause a forfeiture of the gain realized by a Participant with respect to Deferred Stock Units on account of actions taken by, or failed to be taken by, the Participant in violation or breach of or in conflict with any (i) employment agreement, (ii) non-competition agreement, (iii) agreement prohibiting solicitation of employees or clients of the Company or any Affiliate, (iv) confidentiality obligation with respect to the Company or an Affiliate, (v) Company policy or procedure, (vi) other agreement, or (vii) any other obligation of the Participant to the Company or any Affiliate, as and to the extent specified in the Award Agreement. The Committee may annul an outstanding award of Deferred Stock Units if the Participant is terminated for Cause (as defined below) or for “cause” as defined in any other agreement between the Company and the Participant, as applicable. For purposes of the Plan, “Cause” means as determined by the Committee or the Board and unless otherwise provided in an applicable agreement with the Company or any Affiliate, (A) gross negligence or willful misconduct in connection with the performance of duties; (B) conviction of a criminal offense (other than minor traffic offenses); (c) a material violation of a Company policy; or (D) a material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Participant and the Company or any Affiliate.

 

(b)                                 Any award of Deferred Stock Units granted under the Plan will be subject to mandatory repayment by the Participant to the Company to the extent the Participant is, or in the future becomes, subject to (i) any Company “clawback” or recoupment policy that is adopted to comply with the requirements of any applicable law, rule or regulation, or otherwise; or (ii) any law, rule or regulation that imposes mandatory recoupment, under circumstances set forth in such law, rule or regulation.

 

(c)                                  If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under

 

5

 

the securities laws, the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 and any Participant who knowingly engaged in the misconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct or was grossly negligent in failing to prevent the misconduct, will reimburse the Company the amount of any payment in settlement of an award of Deferred Stock Units earned or accrued during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

 

(d)                                 Notwithstanding any other provision of the Plan or any provision of any Award Agreement, if the Company is required to prepare an accounting restatement, then Participants will forfeit any Stock received in connection with an award of Deferred Stock Units (or an amount equal to the Fair Market Value of such Stock on the date of delivery if the Participant no longer holds the shares of Stock) if pursuant to the terms of the Award Agreement for such award of Deferred Stock Units, the Bonus used to purchase Deferred Stock Units was explicitly based on the achievement of pre-established performance goals set forth in the bonus plan governing the Bonus (including earnings, gains, or other criteria) that are later determined, as a result of the accounting restatement, not to have been achieved.

 

12.                               GENERAL PROVISIONS

 

(a)                                 Requirements of Law. The Company will not be required to sell or issue any shares of Stock with respect to Deferred Stock Units if the sale or issuance of such shares of Stock would constitute a violation by the Participant, any other individual or entity, or the Company or any Affiliate of any provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Company determines, in its discretion, that the listing, registration or qualification of any shares of Stock with respect to any Deferred Stock Unit upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares of Stock under the Plan, no shares of Stock may be issued or sold to the Participant or any other individual or entity with respect to such Deferred Stock Units unless such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Company. The Company may, but will in no event be obligated to, register any securities covered by the Plan pursuant to the Securities Act. The Company is not obligated to take any affirmative action to cause the issuance of shares of Stock pursuant to the Plan to comply with any law or regulation of any governmental authority.

 

(b)                                 No Right to Continued Service. No provision in the Plan, any Award Agreement or in any Election Agreement will be construed to confer upon any individual or entity the right to remain in the employ or service of the Company or any Affiliate, or to interfere in any way with any contractual or other right or authority of the Company or any Affiliate either to increase or decrease the compensation or other payments to any individual or entity at any time, or to terminate any employment or other relationship between any individual or entity and the Company or any Affiliate.

 

(c)                                  Disclaimer of Rights. The obligation of the Company to pay any benefits pursuant to this Plan will be interpreted as a contractual obligation to pay only those amounts described in the Plan, in the manner and under the conditions prescribed in the Plan. The Plan and the award of Deferred Stock Units under the Plan will in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Participant or beneficiary under the Plan. Participants in the Plan will have no rights under the Plan other than those of a general unsecured creditor of the Company. Deferred Stock Units represent unfunded and unsecured obligations of the 

 

6

 

Company, subject to the terms and conditions of the Plan, the applicable Award Agreement and the Election Agreement.

 

(d)                                 No Obligation to Minimize Taxes. The Company has no duty or obligation to minimize the tax consequences of a Deferred Stock Unit award under the Plan and makes no guarantee regarding the tax treatment of any such Deferred Stock Unit award.

 

(e)                                  Other Provisions. Each award of Deferred Stock Units under the Plan may contain such other terms and conditions not inconsistent with the Plan as the Committee determines, in its sole discretion, and specifies in the applicable Award Agreement.

 

(f)                                   Severability. If any provision of the Plan, any Award Agreement or any Election Agreement is determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions of the Plan, the Award Agreement and the Election Agreement will be severable and enforceable in accordance with their terms, and all provisions will remain enforceable in any other jurisdiction.

 

(g)                                  Governing Law. The validity and construction of the Plan and the instruments evidencing the award of Deferred Stock Units granted under the Plan will be governed by the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan and the instruments evidencing the award of Deferred Stock Units granted under the Plan to the substantive laws of any other jurisdiction.

 

(h)                                 Section 409A. The Plan is intended to comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan will be interpreted and administered to be in compliance with Section 409A. Notwithstanding anything to the contrary in the Plan, neither the Company, its Affiliates, the Board nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A and neither the Company, its Affiliates, the Board nor the Committee will have any liability to any Participant for such tax or penalty.

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00217-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00217-of-00352.parquet"}]]