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Exhibit 10.4  

 
  EMPLOYMENT CONTRACT    
    

        This Contract, entered into this 20th day of October, 1999 by and between Inrad, Inc., with its principal offices at 181 Legrand Avenue, Northvale, NJ
07647 (hereinafter called the "Company"), and Daniel Lehrfeld, residing at 34 Greenwood Drive, New City, New York 10956 (hereinafter called the "Executive"). 

WITNESSETH  

        In consideration of the mutual covenants herein contained and other good and valuable considerations, the parties hereto agree as follows: 

SECTION 1—DUTIES AND TERM OF EMPLOYMENT  

        1.1   The
Company hereby employs the Executive as its President and Chief Operating Officer subject to the order, supervision, and direction of the Board of Directors of the
Company and the current Chief Executive Officer. It is the present intention of the Company to elect Executive as Chief Executive Officer of the Company on or about March 1, 2000. The Company
will promptly appoint Executive to the Board of Directors, and will nominate him for election to the Board at the next meeting of stockholders. 

        1.2   The
Executive hereby accepts this offer of employment and agrees to remain in the employ of the Company in the aforesaid capacity upon the terms, conditions, and
provisions herein stated. 

        1.3   The
term of this Contract shall commence on September 24, 1999 (the "Effective Date") and shall end on the date of the Executive's 65th birthday, or later
at the discretion of the Company's Board of Directors; provided, however, that this Contract may be terminated by the Executive or the Company as provided in Section 5 of this Contract. 

        1.4   During
the term of his employment, the Executive agrees to devote substantially all of his normal business time and attention (reasonable vacations and period of leave
excepted), skill, and efforts to the business conducted by the Company and to continue to act as President and Chief Operating Officer as aforesaid, and faithfully to perform such executive,
administrative, and supervisory duties and to exercise such powers as specified in the Regulations of the Company from time to time and as the Board of Directors may prescribe. Executive shall be
permitted to serve as a Director or Trustee of other organizations, provided such service does not prevent Executive from performing his duties under this Contract. 

        1.5   The
Executive's duties shall be performed principally at the Company's headquarters located in Northvale, NJ, although Executive understands and agrees that travel,
including overseas travel, is an integral part of his responsibilities. If the requirements of the Company, as determined by the Board of Directors, make it desirable to relocate the principal offices
of the Company to another location more than fifty miles from Northvale, NJ, during the term of this Contract, the Executive will be consulted in advance of any such relocation and will not be
required to render services hereunder without his approval. Whether or not such approval is given, the Executive shall be entitled to the Compensation provided for in Section 2. 

SECTION 2—COMPENSATION  

        2.1   The
annual Base Salary of the Employee shall be $160,000. Such salary shall be payable in equal weekly, bi-weekly, or semi-monthly installments, as determined under the
policies of the Company. The Board of Directors of the Company reserves the right to increase the Base Salary of the Executive, and benefits, specified in this instrument, at any time or times during
the term of this Contract, but merely as an amendment to this Section 2, and all the other terms, provisions, and conditions of this Contract shall continue in force and effect as herein
provided. 

        2.2   The
Executive will work with the Executive Committee of the Board of Directors of the Company to define and establish an Incentive Cash Bonus Plan, subject to the
approval of the Board of Directors, covering all executives and employees, to come into effect for Calendar Year 2000 and thereafter. Executive shall be a participant in said Plan, as well as in
subsequent plans (if any) which may hereafter be adopted. Pursuant to said plan, it shall be possible for Executive to earn a bonus provided that the prescribed targets and objectives set out in the
Cash Bonus Plan are achieved. 

        2.3   In
consideration of the covenants of the Executive under this Contract and his services to the Company, and as an inducement for the Executive to enter into this
Contract, the Company hereby grants to the Executive: 

	a)
	An
 option to purchase 100,000 shares of the Company's common stock at $0.625 per share which the parties agree is the fair market value of that stock on the date hereof. This option
is hereby granted pursuant to the Incentive Stock Option provisions of the Company's Key Employee Compensation Program adopted by the Company's shareholders on June 20, 1996, and attached hereto as
Schedule 1 (the "Plan"), and is subject to all the terms and conditions of the Plan; provided, however, that the Company shall use its best efforts to cause the 

 

stockholders
to make whatever changes to the Plan are necessary to conform the Plan to this Agreement if they can do so in a manner consistent with the provisions of the Internal Revenue Code relating
to Incentive Stock Options. 

	b)
	When
the Executive shall become the Chief Executive Officer of the Company, he shall be entitled to receive options to purchase an additional 310,000 shares of the common stock of the
Company pursuant to the provisions of the Plan. These options shall be granted according to the following schedule, and shall be exercisable, when vested in accordance with the Plan, at the market
price of the Company's stock on the date such options are granted: 

110,000
shares on the first anniversary of the Contract

100,000 shares on the second anniversary of the Contract

100,000 shares on the third anniversary of the Contract 

After
the third anniversary of this Agreement, or at any time that it so determines, the Board may grant, but shall not be obligated to grant, additional Incentive Stock Options to Employee. 

        2.4   The
Executive will be reimbursed for his reasonable expenses, including but not limited to travel and communication expenses, incurred while on, or in connection with,
Company business. 

SECTION 3—BENEFITS  

        3.1   Executive
shall be entitled to receive all benefits generally made available to executives of the Company, as set forth on Schedule 2 attached hereto. 

SECTION 4—NONCOMPETITION AND SECRECY  

        4.1   So
long as this Contract is in effect, and for a period of nine months thereafter, the Executive shall not become or serve as an officer or employee of or consultant to
an individual, partnership, or corporation, or owner or part owner of any business (however this shall not prohibit ownership of not more than 5% of the voting stock of any publicly held corporation),
or member of any partnership, limited partnership, LLC or other entity which conducts a business which, in the reasonable judgment of the Board of Directors of the Company, competes with the Company
in any geographic area where the Company is doing business when this Contract terminates or expires, unless the Executive shall have obtained the written consent of the Board of Directors of the
Company. 

        4.2   Except
for actions taken in the course of his employment hereunder, at no time shall Executive knowingly divulge, furnish, or make accessible to any outside person or
firm any information of a proprietary nature or secret information or trade secrets of the Company not previously disclosed (unless written consent of the Company is first obtained). 

SECTION 5—TERMINATION  

        5.1   Termination
By Company. 

	a)
	Company
shall have the right to terminate this Contract under the following circumstances:

	i)
	Upon
death of the Executive.

	ii)
	Upon
notice from Company to Executive in the event of an illness or other disability which has incapacitated him from performing his duties, in the good faith opinion of
the Board of Directors, for three consecutive months or six non-consecutive months in any eighteen month period,

	iii)
	For
good cause upon notice from Company. Termination by Company of Executive's employment "for good cause" as used in this Contract shall be limited to the commitment
of a significant act of dishonesty such as misappropriation of funds, the conviction of a felony, gross negligence or repeated malfeasance by the Executive in the performance of his duties under this
Contract (despite receiving specific written cure notices from the Company and being given 30 days to substantially remedy such failure), or the voluntary resignation by Executive as an employee of
the Company without the prior written consent of the Company and without "Good Reason" as defined in Section 5.2b.

	iv)
	Upon
45 days written notice, without "good cause". 

2

 

	b)
	If
this Contract is terminated pursuant to paragraphs 5.1a) i) or ii) hereof, Executive or his estate shall be entitled to receive 100% of his Base Salary for
12 months following the date of on which his employment ceases together with the bonus provided for in Section 2.2 hereof with respect to that 12 month period. Company may
purchase insurance to cover all or any part of its obligations set forth in the preceding sentence, and Executive agrees to take a physical examination to facilitate the obtaining of such insurance.

	c)
	If
this Contract is terminated pursuant to paragraph 5.1a iii) above, Executive shall be entitled to receive his Base Salary so long as he is working but not otherwise
and all Bonus payments accrued through the effective date of his termination, but all accrued but unused vacation and sick pay and all granted but non-vested stock options shall be forfeit. In that
event, the severance and separation provisions of Section 6 shall not be applicable.

	d)
	If
this Contract is terminated by Company pursuant to paragraph 5.1a) iv) hereof (i.e., without "good cause"), the severance and separation benefit provisions of
Section 6 of this Contract shall apply.

	e)
	Whenever
compensation is payable to Executive hereunder during a time when he is partially or totally disabled and such disability (except for the provisions hereof) would entitle him
to disability income or to salary continuation payments from Company according to the terms of any plan now or hereafter provided by Company or according to any Company policy in effect at the time of
such disability, the compensation payable to him hereunder shall be inclusive of any such disability income or salary continuation and shall not be in addition thereto. If disability is payable to
executive under an insurance policy paid for by the Company, the amounts paid to him by said insurance company shall be considered part of the payments to be made by Company to him pursuant to this
section, and shall not be in addition thereto. 

        5.2   Termination
By Executive 

	a)
	Executive
shall have the right to terminate his employment without good reason upon delivery of 45 days written notice to the Company. When Executive terminates his employment pursuant
to this sub-section, he shall be entitled to receive his Base Salary so long as he is working but not otherwise and all Bonus payments accrued through the effective date of his termination, but all
granted but non-vested stock options shall be forfeit.

	b)
	Executive
shall have the right to terminate his employment for good reason under this Contract upon 45 days' notice to Company given within 60 days after the occurrence of an
event described in sub-sections i) or ii) and within 180 days after the occurrence of an event described in sub-sections iii below. For the purpose of this Contract "for good
reason" shall be understood to mean the occurrence of any of the following events:

	i)
	Executive
is not elected as Chief Executive Officer on or about March 1, 2000, or is not retained as Chief Executive Officer and a member of the Board of Directors
after March 1, 2000.

	ii)
	Company
acts to materially reduce Executive's duties and responsibilities or compensation hereunder.

	iii)
	In
 the event that the Company is (or substantially all of its assets are) sold to, or combined with, another entity, or is dissolved, Executives duties and
responsibilities shall be deemed to be materially reduced for purposes hereof if his authority with respect to the business of the Company after the sale is substantially less than it was before the
sale, or the Executive does not report directly to the Chief Executive Officer of the acquiring corporation, or his title does not remain President of the Company, or the geographic location of the
performance of the Executive's duties in the resulting new entity changes by more than 50 miles from Northvale, NJ.

	iv)
	Company
acts to change the geographic location of the performance of the Executive's duties by more than 50 miles without his prior written consent.

	c)
	If
this Contract is terminated by Executive pursuant to paragraph 5.2 b) hereof (i.e., "for good reason"), the severance and separation benefit provisions of Section 6 of
this Contract shall apply. If this Contract is terminated by Executive pursuant to paragraph 5.2 a) hereof (i.e., "without good reason"), the severance and separation benefit provisions of
Section 6 of this Contract shall not be applicable. 

SECTION 6—SEVERANCE AND SEPARATION BENEFITS  

        6.1   If
this Contract is terminated by the Company without good cause pursuant to paragraph 5.1 a)iv), hereof, or if Company shall terminate Executive's
employment under this Contract in any other way that is a breach of this Contract by Company, or if the Executive shall terminate this Contract for good reason pursuant to paragraph 5.2b
hereof, the following shall apply: 

3

 

	a)
	The
Company will pay to the Executive an amount equal 12 months of Base Salary and cash bonus payments paid to Executive during the preceding 12 months. The payments will
be made in 12 equal monthly installments, without interest, commencing one month after the effective date of such termination.

	b)
	All
stock options granted to Executive pursuant to Section 2.3 of this Contract shall vest immediately upon termination and shall be exercisable at any time during a period of
one year following termination.

	c)
	The
Executive will receive continuance of all medical insurance, dental insurance, and short and long-term disability insurance benefits covering the Executive for a period terminating
on the earlier of i) 12 months after the date of termination of employment or longer to the extent that COBRA is applicable, or ii) the commencement of equivalent benefits from a
new employer. Executive will continue to pay to Company an amount equal to the Executive's regular contribution for such participation. If the existing policies do not permit such continued
participation, or if the Company so selects, the Company shall arrange to have issued for the benefit of the Executive equivalent benefits, provided further that the Executive shall not be required to
pay any premiums or other charges or amounts on an after tax basis than that which Executive would have paid in order to participate in Employer's plans.

	d)
	The
Executive will receive 12 months executive outplacement assistance with Lee, Hecht, Harrison, Woodcliff Lake, NJ, at a cost to the Company not to exceed $9,000. 

SECTION 7—DISPUTES  

        7.0   Any
dispute, controversy, or claim arising under this Contract shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then
in effect. The controversy or claim shall be submitted to three arbitrators, one of whom shall be chosen by the Company, one of whom shall be chosen by the Executive, and the third of whom shall be
chosen by the two so selected. The party desiring arbitration shall give written notice to the other party of its desire to arbitrate the particular matter in question, naming the arbitrator selected
by it. 

        If
the other party shall fail within a period of 15 days to after such notice to have given a reply in writing naming the arbitrator selected by it, then the party not in default may
apply to the American Arbitration Association for the appointment of the second arbitrator. If the two arbitrators chosen as above should fail within 15 days to after their selection to agree
on the third arbitrator, then either party may apply to the American Arbitrator Association for the appointment of an arbitrator to fill the place so remaining vacant. The decision of any two of the
arbitrators shall be final and binding upon the parties hereto and shall be delivered in writing signed in triplicate by the concurring arbitrators to each of the parties hereto. Judgment upon the
award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 

SECTION 8—BINDING CONTRACT  

        8.0   This
Contract shall be binding upon and inure to the benefit of the Executive, his heirs, distributees and assigns and upon the Company, its successors and assigns and
the acquirer of substantially all the Company's assets. Executive may not, without the express written permission of the Company, assign or pledge any rights or obligations hereunder to any person,
firm, or corporation. 

SECTION 9—AMENDMENT; WAIVER  

        9.0   This
instrument contains the entire Contract of the parties with respect to the employment of Executive by Company. No amendment or modification of this Contract shall
be valid unless evidenced by a written instrument executed by the parties hereto. No waiver by either party of any breach by the other party of any provision or condition of this Contract shall be
deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time. 

SECTION 10—GOVERNING LAW  

        10.0 This
Contract shall be governed by and construed in accordance with the laws of the State of New Jersey. 

SECTION 11—NOTICES  

        11.0 All
notices which a party is required or may desire to give to the other party under or in conjunction with this Contract shall be given in writing by addressing the
same to the other party as follows: 

4

 

If
to Executive to: 

Daniel
Lehrfeld

34 Greenwood Drive

New City, NY 10956 

If
to Company, to: 

Inrad,
Inc.

181 Legrand Avenue

Northvale, NJ 07647

Attn:  Chairman of the Board 

Or
at such other place as may be designated in writing by like notice. Any notice shall be deemed to have been given within 48 hours after being addressed as required herein and deposited,
first-class postage prepaid, in the United States mail. 

5

 

        IN
WITNESS THEREOF, the parties have executed this Contract as of the day and year first written above. 

	

 	
 	

 /s/  DANIEL LEHRFELD       
 Daniel Lehrfeld
	

 	
 	
INRAD, INC.
	

 	
 	
By:	

 /s/  WARREN RUDERMAN       
 Warren Ruderman, President

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EMPLOYMENT CONTRACTExhibit 10.2

 

 

BIMINI
MORTGAGE MANAGEMENT, INC.

2003 LONG TERM
INCENTIVE COMPENSATION PLAN

 

 

 

	
  1.

  	
   

  	
  DEFINITIONS.

  	
   

  	
   

  
	
  2.

  	
   

  	
  EFFECTIVE
  DATE AND TERMINATION OF PLAN.

  	
   

  	
   

  
	
  3.

  	
   

  	
  ADMINISTRATION
  OF PLAN.

  	
   

  	
   

  
	
  4.

  	
   

  	
  SHARES AND
  UNITS SUBJECT TO THE PLAN.

  	
   

  	
   

  
	
  5.

  	
   

  	
  PROVISIONS APPLICABLE
  TO STOCK OPTIONS.

  	
   

  	
   

  
	
  6.

  	
   

  	
  PROVISIONS
  APPLICABLE TO RESTRICTED STOCK.

  	
   

  	
   

  
	
  7.

  	
   

  	
  PROVISIONS
  APPLICABLE TO PHANTOM SHARES.

  	
   

  	
   

  
	
  8.

  	
   

  	
  PROVISIONS
  APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS.

  	
   

  	
   

  
	
  9.

  	
   

  	
  OTHER
  STOCK-BASED AWARDS

  	
   

  	
   

  
	
  10.

  	
   

  	
  TAX
  WITHHOLDING.

  	
   

  	
   

  
	
  11.

  	
   

  	
  REGULATIONS
  AND APPROVALS.

  	
   

  	
   

  
	
  12.

  	
   

  	
  INTERPRETATION
  AND AMENDMENTS; OTHER RULES.

  	
   

  	
   

  
	
  13.

  	
   

  	
  CHANGES IN
  CAPITAL STRUCTURE.

  	
   

  	
   

  

 

i

 

BIMINI
MORTGAGE MANAGEMENT, INC.

2003 LONG TERM
INCENTIVE COMPENSATION PLAN

 

Bimini Mortgage Management, Inc., a Maryland corporation, wishes to
attract key employees, Directors and consultants to the Company and its
Subsidiaries and induce key employees, Directors and consultants to remain with
the Company and its Subsidiaries, and encourage them to increase their efforts
to make the Company’s business more successful whether directly or through its
Subsidiaries.  In furtherance thereof,
the Bimini Mortgage Management, Inc. 2003 Long Term Incentive Compensation Plan
is designed to provide equity-based incentives to key employees, Directors and
consultants of the Company and its Subsidiaries.  Awards under the Plan may be made to selected key employees,
Directors and consultants of the Company and its Subsidiaries in the form of
Options, Restricted Stock, Phantom Shares, Dividend Equivalent Rights or other
forms of equity-based compensation.  The
Plan is effective as of August 13, 2004 and is an amendment and complete
restatement of a predecessor hereto adopted effective May 4, 2004.

1. DEFINITIONS

Whenever used
herein, the following terms shall have the meanings set forth below:

“Award,” except where referring to a particular category of grant under
the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted
Stock, Phantom Shares, Dividend Equivalent Rights and other equity-based Awards
as contemplated herein.

“Award Agreement” means a written agreement in a form approved by the
Committee to be entered into between the Company and the Participant as provided
in Section 3.

“Board” means
the Board of Directors of the Company.

“Cause” means, unless otherwise provided in the Participant’s Award
Agreement, (i) engaging in (A) willful or gross misconduct or
(B) willful or gross neglect; (ii) repeatedly failing to adhere to the
directions of superiors or the Board or the written policies and practices of
the Company or its Subsidiaries or its affiliates; (iii) the commission of a
felony or a crime of moral turpitude, dishonesty, breach of trust or unethical
business conduct, or any crime involving the Company or its Subsidiaries, or
any affiliate thereof; (iv) fraud, misappropriation or embezzlement; (v) a
material breach of the Participant’s employment agreement (if any) with the
Company or its Subsidiaries or its affiliates; (vi) acts or omissions
constituting a material failure to perform substantially and adequately the
duties assigned to the Participant,; (vi) any illegal act detrimental to the
Company or its Subsidiaries or its affiliates; or (vii) repeated failure to
devote substantially all of Participant’s business time and efforts to the
Company if required by Participant’s employment agreement; provided, however,
that, if at any particular time the Participant is subject to an effective
employment agreement with the Company, then, in lieu of the foregoing
definition, “Cause” shall at that time have such meaning as may be specified in
such employment agreement.

“Change in
Control” shall mean the happening of any of the following:

(i)            any
“person,” including a “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, but excluding the Company, any entity controlling,
controlled by or under common control with the Company, any

 

 

 

employee benefit plan of the Company or any such entity,
and with respect to any particular Participant, the Participant and any “group”
(as such term is used in Section 13(d)(3) of the Exchange Act) of which the
Participant is a member, is or becomes the “beneficial owner” (as defined in
Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of either (A) the combined voting power of
the Company’s then outstanding securities or (B) the then outstanding Shares
(in either such case other than as a result of an acquisition of securities
directly from the Company); provided, however, that, in no event shall a Change
in Control be deemed to have occurred upon an initial public offering of the
Common Stock under the Securities Act; or

(ii)           any
consolidation or merger of the Company where the shareholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, shares representing in
the aggregate 50% or more of the combined voting power of the securities of the
corporation issuing cash or securities in the consolidation or merger (or of
its ultimate parent corporation, if any); or

(iii)          there
shall occur (A) any sale, lease, exchange or other transfer (in one transaction
or a series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company, other than a
sale or disposition by the Company of all or substantially all of the Company’s
assets to an entity, at least 50% of the combined voting power of the voting
securities of which are owned by “persons” (as defined above) in substantially
the same proportion as their ownership of the Company immediately prior to such
sale or (B) the approval by shareholders of the Company of any plan or proposal
for the liquidation or dissolution of the Company; or

(iv)          the
members of the Board at the beginning of any consecutive 24-calendar-month
period (the “Incumbent Directors”) cease for any reason other than due to death
to constitute at least a majority of the members of the Board; provided that
any director whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the members of
the Board then still in office who were members of the Board at the beginning
of such 24-calendar-month period, shall be deemed to be an Incumbent Director.

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

“Committee” means the Compensation Committee of the Board.

“Common Stock” means the Company’s Class A Common Stock, par value
$.001 per share, either currently existing or authorized hereafter.

“Company”
means the Bimini Mortgage Management, Inc., a Maryland corporation.

“Director”
means a non-employee director of the Company or its Subsidiaries.

“Disability” means, unless otherwise provided by the Committee in the
Participant’s Award Agreement, a disability which renders the Participant
incapable of performing all of his or her

 

2

 

material duties for a period of at least 180
consecutive or non-consecutive days during any consecutive twelve-month period.

“Dividend Equivalent Right” means a right awarded under Section 8 of
the Plan to receive (or have credited) the equivalent value of dividends paid
on Common Stock.

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

“Fair Market
Value” per Share as of a particular date means (i) if Shares are then listed on
a national stock exchange, the closing sales price per Share on the exchange
for the last preceding date on which there was a sale of Shares on such
exchange, as determined by the Committee, (ii) if Shares are not then listed on
a national stock exchange but are then traded on an over-the-counter market,
the average of the closing bid and asked prices for the Shares in such
over-the-counter market for the last preceding date on which there was a sale
of such Shares in such market, as determined by the Committee, or (iii) if
Shares are not then listed on a national stock exchange or traded on an
over-the-counter market, such value as the Committee in its discretion may in
good faith determine; provided that, where the Shares are so listed or traded,
the Committee may make such discretionary determinations where the Shares have
not been traded for 10 trading days.

 

“Grantee” means an employee, Director or consultant granted Restricted
Stock, Phantom Shares or Dividend Equivalent Rights hereunder.

“Incentive Stock Option” means an “incentive stock option” within the
meaning of Section 422(b) of the Code.

“Non-Qualified
Stock Option” means an Option which is not an Incentive Stock Option.

“Option” means the right to purchase, at a price and for the term fixed
by the Committee in accordance with the Plan, and subject to such other
limitations and restrictions in the Plan and the applicable Award Agreement, a
number of Shares determined by the Committee.

“Optionee” means an employee or Director of, or consultant to, the Company
to whom an Option is granted, or the Successors of the Optionee, as the context
so requires.

“Option Price”
means the exercise price per Share.

“Participant”
means a Grantee or Optionee.

“Phantom Share” means a right, pursuant to the Plan, of the Grantee to
payment of the Phantom Share Value.

“Phantom Share Value,” per Phantom Share, means the Fair Market Value
of a Share of Class A Common Stock, or, if so provided by the Committee, such
Fair Market Value to the extent in excess of a base value established by the
Committee at the time of grant.

“Plan” means the Company’s 2003 Long Term Incentive Compensation Plan,
as set forth herein and as the same may from time to time be amended.

“Restricted
Stock” means an award of Shares that are subject to restrictions hereunder.

“Retirement” means, unless otherwise provided by the Committee in the
Participant’s Award Agreement, the Termination of Service (other than for
Cause) of a Participant on or after the

 

3

 

Participant’s attainment of age 65 or on or after the
Participant’s attainment of age 55 with five consecutive years of service with
the Company and or its Subsidiaries or its affiliates.

“Securities Act” means the Securities Act of 1933, as amended.

“Settlement
Date” means the date determined under Section 7.4(c).

“Shares” means
shares of Class A Common Stock of the Company.

“Subsidiary” means any corporation (other than the Company) that is a
“subsidiary corporation” with respect to the Company under Section 424(f) of
the Code.  In the event the Company
becomes a subsidiary of another company, the provisions hereof applicable to
subsidiaries shall, unless otherwise determined by the Committee, also be
applicable to any company that is a “parent corporation” with respect to the
Company under Section 424(e) of the Code.

“Successor of the Optionee” means the legal representative of the
estate of a deceased Optionee or the person or persons who shall acquire the
right to exercise an Option by bequest or inheritance or by reason of the death
of the Optionee.

“Termination of Service” means a Participant’s termination of
employment or other service, as applicable, with the Company and its
Subsidiaries.  Cessation of service as
an officer, employee, Director or consultant shall not be treated as a
Termination of Service if the Participant continues without interruption to
serve thereafter in another one (or more) of such other capacities.

2. EFFECTIVE DATE AND TERMINATION OF
PLAN.

The effective date of the Plan as initially adopted is December 1,
2003.  The Plan shall not become
effective unless and until it is approved by the shareholders of the
Company.  The Plan shall terminate on,
and no Award shall be granted hereunder on or after, the 10-year anniversary of
the earlier of the approval of the Plan by (i) the Board or (ii) the
shareholders of the Company; provided, however, that the Board may at any time
prior to that date terminate the Plan.

3. ADMINISTRATION OF PLAN.

(a)   The Plan
shall be administered by the Committee appointed by the Board. The Committee,
upon and after such time as it is covered in Section 16 of the Exchange
Act,  shall consist of at least two
individuals each of whom shall be a “nonemployee director” as defined in Rule
16b-3 as promulgated by the Securities and Exchange Commission (“Rule 16b-3”)
under the Exchange Act and shall, at such times as the Company is subject to
Section 162(m) of the Code (to the extent relief from the limitation of Section
162(m) of the Code is sought with respect to Awards), qualify as “outside
directors” for purposes of Section 162(m) of the Code.  The acts of a majority of the members
present at any meeting of the Committee at which a quorum is present, or acts
approved in writing by a majority of the entire Committee, shall be the acts of
the Committee for purposes of the Plan. 
If and to the extent applicable, no member of the Committee may act as
to matters under the Plan specifically relating to such member.  If no Committee is designated by the Board
to act for these purposes, the Board shall have the rights and responsibilities
of the Committee hereunder and under the Award Agreements.

(b)   Subject to
the provisions of the Plan, the Committee shall in its discretion as reflected
by the terms of the Award Agreements (i) authorize the granting of Awards to
key employees, Directors and consultants of the Company and its Subsidiaries;
and (ii) determine the eligibility of an employee, Director or consultant to
receive an Award, as well as determine the number of Shares to be covered under
any Award Agreement, considering the position and responsibilities of the
employee,

 

4

Director or
consultant, the nature and value to the Company of the employee’s, Director’s
or consultant’s present and potential contribution to the success of the
Company whether directly or through its Subsidiaries and such other factors as
the Committee may deem relevant.  In the case of grants to Directors, the grants
shall, unless otherwise provided by the Board, be made and administered by the
Board rather than the Committee.

(c)   The Award
Agreement shall contain such other terms, provisions and conditions not
inconsistent herewith as shall be determined by the Committee.  In the event that any Award Agreement or
other agreement hereunder provides (without regard to this sentence) for the
obligation of the Company or any affiliate thereof to purchase or repurchase
Shares from a Participant or any other person, then, notwithstanding the
provisions of the Award Agreement or such other agreement, such obligation
shall not apply to the extent that the purchase or repurchase would not be
permitted under governing state law. 
The Participant shall take whatever additional actions and execute
whatever additional documents the Committee may in its reasonable judgment deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on the Participant pursuant to the express
provisions of the Plan and the Award Agreement.

(d)   Without
limiting the generality of the Committee’s discretion hereunder, the Committee
may (subject to such considerations as may arise under Section 16 of the
Exchange Act, or under other corporate, securities or tax laws) take any steps
it deems appropriate, that are not inconsistent with the purposes and intent of
the Plan, to establish performance-based criteria applicable to Awards
otherwise permitted to be granted hereunder, and to attempt to procure
shareholder approval with respect thereto, to take into account the provisions
of Section 162(m) of the Code.

4. SHARES AND UNITS SUBJECT TO THE PLAN.

4.1           In General.

(a)   Subject to
Section 4.2, and subject to adjustments as provided in Section 13, the total
number of Shares subject to Options granted under the Plan, Shares of
Restricted Stock and Phantom Shares granted under the Plan, in the aggregate,
may not exceed 4,000,000; provided, however, that no such grant may cause the
total number of Shares subject to all outstanding grants to exceed 10% of the
number of Shares outstanding at the time of the grant.  Shares distributed under the Plan may be
treasury Shares or authorized but unissued Shares.  Any Shares that have been granted as Restricted Stock or that
have been reserved for distribution in payment for Options or Phantom Shares
but are later forfeited or for any other reason are not payable under the Plan
may again be made the subject of Awards under the Plan.

(b)   Shares
subject to Dividend Equivalent Rights, other than Dividend Equivalent Rights
based directly on the dividends payable with respect to Shares subject to
Options or the dividends payable on a number of Shares corresponding to the
number of Phantom Shares awarded, shall be subject to the limitation of Section
4.1(a).

(c)   The
certificates for Shares issued hereunder may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer hereunder
or under the Award Agreement, or as the Committee may otherwise deem
appropriate.

(d)   No award
may be granted under the 2003 Long Term Incentive Compensation Plan to any
person who, assuming exercise of all options and payment of all awards held by
such person, would own or be deemed to own more than 9.8% of the outstanding
shares of Common Stock.

4.2           Options.

5

 

Subject to adjustments pursuant to Section 13, and subject to the last
sentence of Section 4.1(a), Options with respect to an aggregate of no more
than 4,000,000 Shares may be granted under the Plan, or, if less, 10% of the
number of Shares outstanding at the time of the grant.  Subject to adjustments pursuant to Section
13, in no event may any Optionee receive Options for more than 2,000,000 Shares
over the life of the Plan.  The
aggregate Fair Market Value, determined as of the date an Option is granted, of
the Common Stock for which any Optionee may be awarded Incentive Stock Options
which are first exercisable by the Optionee during any calendar year under the
Plan (or any other stock option plan required to be taken into account  under Section 422(d) of the Code) shall not
exceed $100,000.

5.  PROVISIONS APPLICABLE TO STOCK
OPTIONS.

5.1           Grant of Option.

Subject to the other
terms of the Plan, the Committee shall, in its discretion as reflected by the
terms of the applicable Award Agreement: (i) determine and designate from time
to time those key employees, Directors and consultants of the Company and its
Subsidiaries to whom Options are to be granted and the number of Shares to be
optioned to each employee, Director and consultant; (ii) determine whether to
grant Options intended to be Incentive Stock Options, or to grant Non-Qualified
Stock Options, or both (to the extent that any Option does not qualify as an
Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option); provided that Incentive Stock Options may only be granted to
employees; (iii) determine the time or times when and the manner and condition
in which each Option shall be exercisable and the duration of the exercise
period; (iv) designate each Option as one intended to be an Incentive Stock
Option or as a Non-Qualified Stock Option; and (v) determine or impose other
conditions to the grant or exercise of Options under the Plan as it may deem
appropriate.

 

5.2           Option Price.

The Option Price shall be determined by the Committee on the date the
Option is granted and reflected in the Award Agreement, as the same may be
amended from time to time.  Any
particular Award Agreement may provide for different exercise prices for
specified amounts of Shares subject to the Option.  The Option Price with respect to each Incentive Stock Option, or
other Option intended to qualify for relief from the restrictions of Section
162(m) of the Code, shall not be less than 100% (or, for Incentive Stock
Options, 110%, in the case of an individual described in Section 422(b)(6) of
the Code (relating to certain 10% owners)) of the Fair Market Value of a Share
on the day the Option is granted.

5.3           Period of Option and Vesting.

(a)   Unless
earlier expired, forfeited or otherwise terminated, each Option shall expire in
its entirety upon the 10th anniversary of the date of grant or shall have such
other shorter term as is set forth in the applicable Award Agreement (except
that, in the case of an individual described in Section 422(b)(6) of the Code
(relating to certain 10% owners) who is granted an Incentive Stock Option, the
term of such Option shall be no more than five years from the date of
grant).  The Option shall also expire,
be forfeited and terminate at such times and in such circumstances as otherwise
provided hereunder or under the Award Agreement.

(b)   Each
Option, to the extent that the Optionee has not had a Termination of Service
and the Option has not otherwise lapsed, expired, terminated or been forfeited,
shall first become exercisable according to the terms and conditions set forth
in the Award Agreement, as determined by the Committee at the time of grant.
Unless otherwise determined by the Committee at the time of the grant, such stock
options shall vest ratably, in annual installments, over a five-year period
beginning on the date of the grant. 
Unless otherwise provided in the Award Agreement, no Option (or portion
thereof) shall 

 

6

 

ever be
exercisable if the Optionee has a Termination of Service before the time at
which such Option would otherwise have become exercisable, and any Option that
would otherwise become exercisable after such Termination of Service shall not
become exercisable and shall be forfeited upon such termination.  Notwithstanding the foregoing provisions of
this Section 5.3(b), Options exercisable pursuant to the schedule set forth by
the Committee at the time of grant may be fully or more rapidly exercisable or
otherwise vested at any time in the discretion of the Committee.  Upon and after the death of an Optionee,
such Optionee’s Options, if and to the extent otherwise exercisable hereunder
or under the applicable Award Agreement after the Optionee’s death, may be
exercised by the Successors of the Optionee.

5.4           Exercisability Upon and After Termination of Optionee.

(a)   Subject to
provisions of the Award Agreement, in the event the Optionee has a Termination
of Service other than by the Company or its Subsidiaries for Cause, or other
than by reason of death, Retirement or Disability, no exercise of an Option may
occur after the expiration of the three-month period to follow the termination,
or if earlier, the expiration of the term of the Option as provided under
Section 5.3(a); provided that, if the Optionee should die after the Termination
of Service, such termination being for a reason other than Disability or
Retirement, but while the Option is still in effect, the Option (if and to the
extent otherwise exercisable by the Optionee at the time of death) may be
exercised until the earlier of (i) one year from the date of the Termination of
Service of the Optionee, or (ii) the date on which the term of the Option
expires in accordance with Section 5.3(a).

(b)   Subject to
provisions of the Award Agreement, in the event the Optionee has a Termination
of Service on account of death or Disability or Retirement, the Option (whether
or not otherwise exercisable) may be exercised until the earlier of (i) one
year from the date of the Termination of Service of the Optionee, or (ii) the
date on which the term of the Option expires in accordance with Section 5.3.

(c)   Notwithstanding
any other provision hereof, unless otherwise provided in the Award Agreement,
if the Optionee has a Termination of Service by the Company for Cause, the
Optionee’s Options, to the extent then unexercised, shall thereupon cease to be
exercisable and shall be forfeited forthwith.

5.5           Exercise of Options.

(a)   Subject to
vesting, restrictions on exercisability and other restrictions provided for
hereunder or otherwise imposed in accordance herewith, an Option may be
exercised, and payment in full of the aggregate Option Price made, by an
Optionee only by written notice (in the form prescribed by the Committee) to
the Company specifying the number of Shares to be purchased.

(b)   Without
limiting the scope of the Committee’s discretion hereunder, the Committee may
impose such other restrictions on the exercise of Incentive Stock Options
(whether or not in the nature of the foregoing restrictions) as it may deem
necessary or appropriate.

(c)   If Shares
acquired upon exercise of an Incentive Stock Option are disposed of in a
disqualifying disposition within the meaning of Section 422 of the Code by an
Optionee prior to the expiration of either two years from the date of grant of
such Option or one year from the transfer of Shares to the Optionee pursuant to
the exercise of such Option, or in any other disqualifying disposition within
the meaning of Section 422 of the Code, such Optionee shall notify the Company
in writing as soon as practicable thereafter of the date and terms of such
disposition and, if the Company (or any affiliate thereof) thereupon has a
tax-withholding obligation, shall pay to the Company (or such affiliate)

 

7

 

an amount equal to
any withholding tax the Company (or affiliate) is required to pay as a result
of the disqualifying disposition.

5.6           Payment.

(a)   The
aggregate Option Price shall be paid in full upon the exercise of the
Option.  Payment must be made by one of
the following methods:

(i)            a
certified or bank cashier’s check;

(ii)           the
proceeds of a Company loan program or third-party sale program or a notice
acceptable to the Committee given as consideration under such a program, in
each case if permitted by the Committee in its discretion, if such a program
has been established and the Optionee is eligible to participate therein;

(iii)          if
approved by the Committee in its discretion, Shares of previously owned Common
Stock, which have been previously owned for more than six months, having an
aggregate Fair Market Value on the date of exercise equal to the aggregate
Option Price; or

(iv)          by
any combination of such methods of payment or any other method acceptable to
the Committee in its discretion.

(b)   Except in
the case of Options exercised by certified or bank cashier’s check, the
Committee may impose limitations and prohibitions on the exercise of Options as
it deems appropriate, including, without limitation, any limitation or
prohibition designed to avoid accounting consequences which may result from the
use of Common Stock as payment upon exercise of an Option.

(c)   The
Committee may provide that no Option may be exercised with respect to any
fractional Share.  Any fractional Shares
resulting from an Optionee’s exercise that is accepted by the Company shall in
the discretion of the Committee be paid in cash.

5.7           Exercise by Successors.

An Option may be exercised, and payment in full of the aggregate Option
Price made, by the Successors of the Optionee only by written notice (in the
form prescribed by the Committee) to the Company specifying the number of
Shares to be purchased.  Such notice
shall state that the aggregate Option Price will be paid in full, or that the
Option will be exercised as otherwise provided hereunder, in the discretion of
the Company or the Committee, if and as applicable.

5.8           Nontransferability of Option. 

Each Option
granted under the Plan shall be nontransferable by the Optionee except by will
or the laws of descent and distribution of the state wherein the Optionee is
domiciled at the time of his death; provided, however, that the Committee may
(but need not) permit other transfers, where the Committee concludes that such
transferability (i) does not result in accelerated U.S. federal income
taxation, (ii) does not cause any Option intended to be an Incentive Stock
Option to fail to be described in Section 422(b) of the Code, and (iii) is
otherwise appropriate and desirable.

5.9           Deferral.

 

8

 

 

The Committee may establish a program under which Participants will
have Phantom Shares subject to Section 7 credited upon their exercise of
Options, rather than receiving Shares at that time.

6. PROVISIONS APPLICABLE TO
RESTRICTED STOCK.

6.1           Grant of Restricted Stock.

Subject to the other terms of the Plan, the Committee may, in its
discretion as reflected by the terms of the applicable Award Agreement:  (i) authorize the granting of Restricted
Stock to key employees, Directors and consultants of the Company and its
Subsidiaries; (ii) provide a specified
purchase price for the Restricted Stock (whether or not the payment of a
purchase price is required by any state law applicable to the Company);
(iii) determine the restrictions applicable to Restricted Stock and (iv)
determine or impose other conditions to the grant of Restricted Stock under the
Plan as it may deem appropriate. Restricted Stock may be awarded on an annual
basis.

6.2           Certificates.

(a)   Unless otherwise determined
by the Committee, each Grantee of Restricted Stock shall be issued a stock
certificate in respect of Shares of Restricted Stock awarded under the
Plan.  Each such certificate shall be
registered in the name of the Grantee.  
Without limiting the generality of Section 4.1(c), the certificates for
Shares of Restricted Stock issued hereunder may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer hereunder
or under the Award Agreement, or as the Committee may otherwise deem
appropriate, and, without limiting the generality of the foregoing, shall bear
a legend referring to the terms, conditions, and restrictions applicable to
such Award, substantially in the following form:

The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Bimini Mortgage Management, Inc. 2003 Long Term Incentive
Compensation Plan and an Award Agreement entered into between the registered
owner and Bimini Mortgage Management, Inc. 
Copies of such Plan and Award Agreement are on file in the offices of
Bimini Mortgage Management, Inc., at 3305 Flamingo Drive, Suite 100, Vero
Beach, Florida 32963.

(b)   The Committee
shall require that the stock certificates evidencing such Shares be held in
custody by the Company until the restrictions hereunder shall have lapsed, and
that, as a condition of any Award of Restricted Stock, the Grantee shall have
delivered to the Company a stock power, endorsed in blank, relating to the
stock covered by such Award.  If and when such restrictions so lapse, the stock
certificates shall be delivered by the Company to the Grantee or his or her
designee as provided in Section 6.3 (and the stock power shall be so delivered
or shall be discarded).

6.3           Restrictions and Conditions.

Unless otherwise provided by the Committee, the Shares of Restricted
Stock awarded pursuant to the Plan shall be subject to the following
restrictions and conditions:

(i)      Subject
to the provisions of the Plan and the Award Agreements, during a period
commencing with the date of such Award and ending on the date the period of
forfeiture with respect to such Shares lapses, the Grantee shall not be
permitted voluntarily or

 

9

 

involuntarily to sell, transfer, pledge, anticipate,
alienate, encumber or assign Shares of Restricted Stock awarded under the Plan
(or have such Shares attached or garnished). 
Subject to the provisions of the Award Agreements and clauses (iv) and
(v) below, the period of forfeiture with respect to Shares granted hereunder
shall lapse as provided in the applicable Award Agreement.  Notwithstanding the foregoing, unless
otherwise expressly provided by the Committee, the period of forfeiture with
respect to such Shares shall only lapse as to whole Shares.

(ii)     Subject
to the provisions of the Plan and Award Agreements, unless otherwise determined
by the Committee at the time of grant, the period of forfeiture described in
clause (i) shall be a three-year period, and restriction shall lapse ratably in
annual installments over the period.  In
addition, unless otherwise provided by the Committee at the time of the grant,
50% of each grant of Restricted Stock granted pursuant to the Plan shall also
be subject to the Company’s achieving such financial hurdles, pre-determined by
the Committee, as the Committee may determine are applicable for each of the
applicable three years.

(iii)    Except
as provided in the foregoing clause (i), below in this clause (iii), in Section
13, or otherwise provided in the applicable Award Agreement, the Grantee shall
have, in respect of the Shares of Restricted Stock, all of the rights of a
shareholder of the Company, including the right to vote the Shares, and, except
as provided below, the right to receive any cash dividends.  The Committee may provide in the Award
Agreement that cash dividends on such Shares shall be held by the Company
(unsegregated as a part of its general assets) until the period of forfeiture
lapses (and forfeited if the underlying Shares are forfeited), and paid over to
the Grantee as soon as practicable after such period lapses (if not forfeited),
or alternatively may provide for other treatment of such dividends (including
without limitation the crediting of Phantom Shares in respect of dividends or
other deferral provisions). 
Certificates for Shares (not subject to restrictions hereunder) shall be
delivered to the Grantee or his or her designee promptly after, and only after,
the period of forfeiture shall lapse without forfeiture in respect of such
Shares of Restricted Stock.

(iv)    Except if
otherwise provided in the applicable Award Agreement, and subject to clause (v)
below, if the Grantee has a Termination of Service by the Company and its
Subsidiaries for Cause, or by the Grantee for any reason, during the applicable
period of forfeiture, then (A) all Shares still subject to restriction shall
thereupon, and with no further action, be forfeited by the Grantee, and (B) the Company shall pay to the Grantee as
soon as practicable (and in no event more than 30 days) after such termination
an amount equal to the lesser of (x) the amount paid by the Grantee for such
forfeited Restricted Stock as contemplated by Section 6.1, and (y) the Fair
Market Value on the date of termination of the forfeited Restricted Stock.

(v)     Subject
to the provisions of the Award Agreement, in the event the Grantee has a
Termination of Service on account of death or Disability or Retirement during
the applicable period of forfeiture, then restrictions under the Plan will
immediately lapse on all Restricted Stock granted to the applicable Grantee.

7. PROVISIONS APPLICABLE TO PHANTOM
SHARES.

7.1           Grant of Phantom Shares.

 

 

10

 

Subject to the other
terms of the Plan, the Committee shall, in its discretion as reflected by the
terms of the applicable Award Agreement: 
(i) authorize the granting of Phantom Shares to key employees, Directors
and consultants of the Company and its Subsidiaries and (ii) determine or
impose other conditions to the grant of Phantom Shares under the Plan as it may
deem appropriate.

 

7.2           Term.

The Committee may provide in an Award Agreement that any particular
Phantom Share shall expire at the end of a specified term.

7.3           Vesting.

Phantom Shares shall vest
as provided in the applicable Award Agreement.

 

7.4           Settlement of Phantom Shares.

(a)   Each vested
and outstanding Phantom Share shall be settled by the transfer to the Grantee
of one Share; provided that, the Committee at the time of grant may provide
that a Phantom Share may be settled (i) in cash at the applicable Phantom Share
Value, (ii) in cash or by transfer of Shares as elected by the Grantee in
accordance with procedures established by the Committee or (iii) in cash or by
transfer of Shares as elected by the Company.

(b)   Phantom
Shares shall be settled with a single-sum payment by the Company; provided
that, with respect to Phantom Shares of a Grantee which have a common
Settlement Date, the Committee may permit the Grantee to elect in accordance
with procedures established by the Committee to receive installment payments
over a period not to exceed 10 years.

(c)           (i)            The
Settlement Date with respect to a Grantee is the first day of the month to
follow the Grantee’s Termination of Service, provided that a Grantee may elect,
in accordance with procedures to be adopted by the Committee, that such
Settlement Date will be deferred as elected by the Grantee to a time permitted
by the Committee under procedures to be established by the Committee.  Unless otherwise determined by the
Committee, elections under this Section 7.4(c)(i) must be made at least six
months before, and in the year prior to the year in which, the Settlement Date
would occur in the absence of such election.

                (ii)           Notwithstanding Section 7.4(c)(i), the Committee may
provide that distributions of Phantom Shares can be elected at any time in
those cases in which the Phantom Share Value is determined by reference to Fair
Market Value to the extent in excess of a base value, rather than by reference
to unreduced Fair Market Value.

                (iii)          Notwithstanding the foregoing, the Settlement Date, if not
earlier pursuant to this Section 7.4(c), is the date of the Grantee’s death.

(d)   Notwithstanding
the other provisions of this Section 7, in the event of a Change in Control,
the Settlement Date shall be the date of such Change in Control and all amounts
due with respect to Phantom Shares to a Grantee hereunder shall be paid as soon
as practicable (but in no event more than 30 days) after such Change in
Control, unless such Grantee elects otherwise in accordance with procedures
established by the Committee.

(e)   Notwithstanding
any other provision of the Plan, a Grantee may receive any amounts to be paid
in installments as provided in Section 7.4(b) or deferred by the Grantee as
provided in 

 

11

 

Section 7.4(c) in
the event of an “Unforeseeable Emergency.” 
For these purposes, an “Unforeseeable Emergency,” as determined by the
Committee in its sole discretion, is a severe financial hardship to the Grantee
resulting from a sudden and unexpected illness or accident of the Grantee or
“dependent,” as defined in Section 152(a) of the Code, of the Grantee, loss of
the Grantee’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Grantee.  The circumstances that
will constitute an Unforeseeable Emergency will depend upon the facts of each
case, but, in any case, payment may not be made to the extent that such
hardship is or may be relieved:

(i)            through
reimbursement or compensation by insurance or otherwise,

(ii)           by
liquidation of the Grantee’s assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship, or

(iii)          by
future cessation of the making of additional deferrals under Section 7.4 (b)
and (c).

Without
limitation, the need to send a Grantee’s child to college or the desire to
purchase a home shall not constitute an Unforeseeable Emergency.  Distributions of amounts because of an
Unforeseeable Emergency shall be permitted to the extent reasonably needed to satisfy
the emergency need.

7.5           Other Phantom Share Provisions.

(a)   Rights to
payments with respect to Phantom Shares granted under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, garnishment, levy, execution, or other legal
or equitable process, either voluntary or involuntary; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or
garnish, or levy or execute on any right to payments or other benefits payable
hereunder, shall be void.

(b)   A Grantee
may designate in writing, on forms to be prescribed by the Committee, a
beneficiary or beneficiaries to receive any payments payable after his or her
death and may amend or revoke such designation at any time.  If no beneficiary designation is in effect
at the time of a Grantee’s death, payments hereunder shall be made to the
Grantee’s estate.  If a Grantee with a
vested Phantom Share dies, such Phantom Share shall be settled and the Phantom Share
Value in respect of such Phantom Shares paid, and any payments deferred
pursuant to an election under Section 7.4(c) shall be accelerated and paid, as
soon as practicable (but no later than 60 days) after the date of death to such
Grantee’s beneficiary or estate, as applicable.

(c)   The Committee
may establish a program under which distributions with respect to Phantom
Shares may be deferred for periods in addition to those otherwise contemplated
by foregoing provisions of this Section 7. 
Such program may include, without limitation, provisions for the
crediting of earnings and losses on unpaid amounts, and, if permitted by the
Committee, provisions under which Participants may select from among
hypothetical investment alternatives for such deferred amounts in accordance
with procedures established by the Committee.

(d)   Phantom
Shares (including for purposes of this Section 7.5(d) any accounts established
to facilitate the implementation of Section 7.4(c)), are solely a device for
the measurement and determination of the amounts to be paid to a Grantee under
the Plan.  Each Grantee’s right in the
Phantom Shares is limited to the right to receive payment, if any, as may
herein be provided.  The Phantom Shares
do not constitute Common Stock and shall not be treated as (or as giving rise
to) property or as a trust fund of any kind; provided, however, that the
Company may establish a mere bookkeeping 

 

12

 

 

reserve to meet
its obligations hereunder or a trust or other funding vehicle that would not cause
the Plan to be deemed to be funded for tax purposes or for purposes of Title I
of the Employee Retirement Income Security Act of 1974, as amended.  The right of any Grantee of Phantom Shares
to receive payments by virtue of participation in the Plan shall be no greater
than the right of any unsecured general creditor of the Company.

(e)   Notwithstanding
any other provision of this Section 7, any fractional Phantom Share will be
paid out in cash at the Phantom Share Value as of the Settlement Date.

(f)    No Phantom
Share shall be construed to give any Grantee any rights with respect to Shares
or any ownership interest in the Company. 
Except as may be provided in accordance with Section 8, no provision of
the Plan shall be interpreted to confer upon any Grantee any voting, dividend
or derivative or other similar rights with respect to any Phantom Share.

7.6           Claims Procedures.

(a)   The
Grantee, or his beneficiary hereunder or authorized representative, may file a
claim for payments with respect to Phantom Shares under the Plan by written
communication to the Committee or its designee.  A claim is not considered filed until such communication is
actually received.  Within 90 days (or,
if special circumstances require an extension of time for processing, 180 days,
in which case notice of such special circumstances should be provided within
the initial 90-day period) after the filing of the claim, the Committee will
either:

(i)            approve
the claim and take appropriate steps for satisfaction of the claim; or

(ii)           if
the claim is wholly or partially denied, advise the claimant of such denial by
furnishing to him a written notice of such denial setting forth (A) the
specific reason or reasons for the denial; (B) specific reference to pertinent
provisions of the Plan on which the denial is based and, if the denial is based
in whole or in part on any rule of construction or interpretation adopted by
the Committee, a reference to such rule, a copy of which shall be provided to
the claimant; (C) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of the
reasons why such material or information is necessary; and (D) a reference to
this Section 7.6 as the provision setting forth the claims procedure under the Plan.

(b)   The
claimant may request a review of any denial of his claim by written application
to the Committee within 60 days after receipt of the notice of denial of such
claim.  Within 60 days (or, if special
circumstances require an extension of time for processing, 120 days, in which
case notice of such special circumstances should be provided within the initial
60-day period) after receipt of written application for review, the Committee
will provide the claimant with its decision in writing, including, if the
claimant’s claim is not approved, specific reasons for the decision and
specific references to the Plan provisions on which the decision is based.

8. PROVISIONS APPLICABLE TO DIVIDEND
EQUIVALENT RIGHTS.

8.1           Grant of Dividend Equivalent Rights.

Subject to the other terms of the Plan, the Committee shall, in its
discretion as reflected by the terms of the Award Agreements, authorize the
granting of Dividend Equivalent Rights to key

 

 

13

 

employees, Directors and consultants of the Company
and its Subsidiaries based on the dividends declared on Common Stock, to be
credited as of the dividend payment dates, during the period between the date
an Award is granted, and the date such Award is exercised, vests or expires, as
determined by the Committee.  Such
Dividend Equivalent Rights shall be converted to cash or additional Shares of
Common Stock by such formula and at such time and subject to such limitation as
may be determined by the Committee. 
With respect to Dividend Equivalent Rights granted with respect to
Options intended to be qualified performance-based compensation for purposes of
Section 162(m) of the Code, such Dividend Equivalent Rights shall be payable
regardless of whether such Option is exercised.  If a Dividend Equivalent Right is granted in respect of another
Award hereunder, then, unless otherwise stated in the Award Agreement, in no
event shall the Dividend Equivalent Right be in effect for a period beyond the
time during which the applicable portion of the underlying Award is in effect.

8.2           Certain Terms.

(a)   The term of
a Dividend Equivalent Right shall be set by the Committee in its discretion.

(b)   Unless
otherwise determined by the Committee, a Dividend Equivalent Right is
exercisable or payable only while the Participant is an employee, Director or
consultant.

(c)   Payment of
the amount determined in accordance with Section 8.1 shall be in cash, in
Common Stock or a combination of the both, as determined by the Committee.

(d)   The Committee
may impose such employment-related conditions on the grant of a Dividend
Equivalent Right as it deems appropriate in its discretion.

8.3           Other Types of Dividend Equivalent Rights.

The Committee may establish a program under which Dividend Equivalent
Rights of a type not described in the foregoing provisions of this Section 8
may be granted to Participants.  For
example, and without limitation, the Committee may grant a dividend equivalent
right in respect of each Share subject to an Option or with respect to a
Phantom Share, which right would consist of the right (subject to Section 8.4)
to receive a cash payment in an amount equal to the dividend distributions paid
on a Share from time to time.

8.4           Deferral.

(a)   The
Committee may establish a program under which Participants (i) will have
Phantom Shares credited, subject to the terms of Sections 7.4 and 7.5 as though
directly applicable with respect thereto, upon the granting of Dividend
Equivalent Rights, or (ii) will have payments with respect to Dividend
Equivalent Rights deferred.

(b)   The
Committee may establish a program under which distributions with respect to
Dividend Equivalent Rights may be deferred. 
Such program may include, without limitation, provisions for the
crediting of earnings and losses on unpaid amounts, and, if permitted by the
Committee, provisions under which Participants may select from among
hypothetical investment alternatives for such deferred amounts in accordance
with procedures established by the Committee.

9. OTHER EQUITY-BASED AWARDS

 

14

 

The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including, without limitation, the grant of shares based upon certain
conditions, the grant of securities convertible into Common Stock and the grant
of stock appreciation rights.  The
provisions of Section 13 and other provisions of the Plan applicable to types
of Awards specifically provided for under the Plan shall be applied in the
discretion of the Committee with appropriate adjustment to Awards under this
Section 9.

10.  TAX WITHHOLDING.

10.1         In General.

The Company shall be entitled to withhold from any payments or deemed
payments any amount of tax withholding determined by the Committee to be
required by law.  Without limiting the
generality of the foregoing, the Committee may, in its discretion, require the
Participant to pay to the Company at such time as the Committee determines the
amount that the Committee deems necessary to satisfy the Company’s obligation
to withhold federal, state or local income or other taxes incurred by reason of
(i) the exercise of any Option, (ii) the lapsing of any restrictions applicable
to any Restricted Stock, (iii) the receipt of a distribution in respect of
Phantom Shares or Dividend Equivalent Rights or (iv) any other applicable
income-recognition event (for example, an election under Section 83(b) of the
Code).

10.2         Share Withholding.

(a)   Upon
exercise of an Option, the Optionee may, if approved by the Committee in its
discretion, make a written election to have Shares then issued withheld by the
Company from the Shares otherwise to be received, or to deliver previously
owned Shares, in order to satisfy the liability for such withholding
taxes.  In the event that the Optionee
makes, and the Committee permits, such an election, the number of Shares so
withheld or delivered shall have an aggregate Fair Market Value on the date of
exercise sufficient to satisfy the applicable withholding taxes.  Where the exercise of an Option does not
give rise to an obligation by the Company to withhold federal, state or local
income or other taxes on the date of exercise, but may give rise to such an
obligation in the future, the Committee may, in its discretion, make such
arrangements and impose such requirements as it deems necessary or appropriate.

(b)   Upon
lapsing of restrictions on Restricted Stock (or other income-recognition
event), the Grantee may, if approved by the Committee in its discretion, make a
written election to have Shares withheld by the Company from the Shares
otherwise to be released from restriction, or to deliver previously owned
Shares (not subject to restrictions hereunder), in order to satisfy the
liability for such withholding taxes. 
In the event that the Grantee makes, and the Committee permits, such an
election, the number of Shares so withheld or delivered shall have an aggregate
Fair Market Value on the date of exercise sufficient to satisfy the applicable
withholding taxes.

(c)   Upon the
making of a distribution in respect of Phantom Shares or Dividend Equivalent
Rights, the Grantee may, if approved by the Committee in its discretion, make a
written election to have amounts (which may include Shares) withheld by the
Company from the distribution otherwise to be made, or to deliver previously
owned Shares (not subject to restrictions hereunder), in order to satisfy the
liability for such withholding taxes. 
In the event that the Grantee makes, and the Committee permits, such an
election, any Shares so withheld or delivered shall have an aggregate Fair
Market Value on the date of exercise sufficient to satisfy the applicable
withholding taxes.

10.3         Withholding Required.

 

15

 

Notwithstanding anything contained in the Plan or the Award Agreement
to the contrary, the Participant’s satisfaction of any tax-withholding
requirements imposed by the Committee shall be a condition precedent to the
Company’s obligation as may otherwise be provided hereunder to provide Shares
to the Participant and to the release of any restrictions as may otherwise be
provided hereunder, as applicable; and the applicable Option, Restricted Stock,
Phantom Shares or Dividend Equivalent Rights shall be forfeited upon the
failure of the Participant to satisfy such requirements with respect to, as
applicable, (i) the exercise of the Option, (ii) the lapsing of restrictions on
the Restricted Stock (or other income-recognition event) or (iii) distributions
in respect of any Phantom Share or Dividend Equivalent Right.

11. REGULATIONS AND APPROVALS.

(a)   The
obligation of the Company to sell Shares with respect to an Award granted under
the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining
of all such approvals by governmental agencies as may be deemed necessary or
appropriate by the Committee.

(b)   The
Committee may make such changes to the Plan as may be necessary or appropriate
to comply with the rules and regulations of any government authority or to
obtain tax benefits applicable to an Award.

(c)   Each grant
of Options, Restricted Stock, Phantom Shares (or issuance of Shares in respect
thereof) or Dividend Equivalent Rights (or issuance of Shares in respect
thereof), or other Award under Section 9 (or issuance of Shares in respect
thereof), is subject to the requirement that, if at any time the Committee
determines, in its discretion, that the listing, registration or qualification
of Shares issuable pursuant to the Plan is required by any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance of Options, Shares of Restricted Stock, Phantom
Shares, Dividend Equivalent Rights, other Awards or other Shares, no payment
shall be made, or Phantom Shares or Shares issued or grant of Restricted Stock
or other Award made, in whole or in part, unless listing, registration,
qualification, consent or approval has been effected or obtained free of any
conditions in a manner acceptable to the Committee.

(d)   In the
event that the disposition of stock acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act, and
is not otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required under the Securities Act, and the
Committee may require any individual receiving Shares pursuant to the Plan, as
a condition precedent to receipt of such Shares, to represent to the Company in
writing that such Shares are acquired for investment only and not with a view
to distribution and that such Shares will be disposed of only if registered for
sale under the Securities Act or if there is an available exemption for such
disposition.

(e)   Notwithstanding
any other provision of the Plan, the Company shall not be required to take or
permit any action under the Plan or any Award Agreement which, in the
good-faith determination of the Company, would result in a material risk of a
violation by the Company of Section 13(k) of the Exchange Act.

12.  INTERPRETATION AND AMENDMENTS;
OTHER RULES.

The Committee may make such rules and regulations and establish such
procedures for the administration of the Plan as it deems appropriate.  Without limiting the generality of the
foregoing, the Committee may (i) determine the extent, if any, to which
Options, Phantom Shares or Shares (whether

 

16

 

or not Shares of Restricted Stock) or Dividend
Equivalent Rights shall be forfeited (whether or not such forfeiture is
expressly contemplated hereunder); (ii) interpret the Plan and the Award
Agreements hereunder, with such interpretations to be conclusive and binding on
all persons and otherwise accorded the maximum deference permitted by law; and
(iii) take any other actions and make any other determinations or decisions
that it deems necessary or appropriate in connection with the Plan or the
administration or interpretation thereof. 
In the event of any dispute or disagreement as to the interpretation of
the Plan or of any rule, regulation or procedure, or as to any question, right
or obligation arising from or related to the Plan, the decision of the
Committee shall be final and binding upon all persons.  Unless otherwise expressly provided
hereunder, the Committee, with respect to any grant, may exercise its
discretion hereunder at the time of the Award or thereafter. No action which is
otherwise permitted under or in connection with the Plan shall be prohibited
hereunder merely because it constitutes a repricing of an Award, and, in
furtherance of the foregoing, the Committee is expressly authorized and
empowered, without limitation, to effect repricings that are consistent with
the terms of the Plan.  The Board may
amend the Plan as it shall deem advisable, except that no amendment may
adversely affect a Participant with respect to an Award previously granted
unless such amendments are required in order to comply with applicable laws;
provided, however, that the Plan may not be amended without shareholder
approval in any case in which amendment in the absence of shareholder approval would
cause the Plan to fail to comply with any applicable legal requirement or
applicable exchange or similar rule.

13. CHANGES IN CAPITAL STRUCTURE.

(a)   If (i) the Company or its Subsidiaries shall
at any time be involved in a merger, consolidation, dissolution, liquidation,
reorganization, exchange of shares, sale of all or substantially all of the
assets or stock of the Company or its Subsidiaries or a transaction similar
thereto, (ii) any stock dividend, stock split, reverse stock split, stock
combination, reclassification, recapitalization or other similar change in the
capital structure of the Company or its Subsidiaries, or any distribution to
holders of Common Stock other than cash dividends, shall occur or (iii) any
other event shall occur which in the judgment of the Committee necessitates
action by way of adjusting the terms of the outstanding Awards, then:

 

 

17

 

(x)  the maximum aggregate number of Shares which
may be made subject to Options and Dividend Equivalent Rights under the Plan,
the maximum aggregate number and kind of Shares of Restricted Stock that may be
granted under the Plan, the maximum aggregate number of Phantom Shares and
other Awards which may be granted under the Plan may be appropriately adjusted
by the Committee in its discretion; and

(y) the Committee may take any such action
as in its discretion shall be necessary to maintain each Optionees’ rights
hereunder (including under their Award Agreements) with respect to Options,
Phantom Shares and Dividend Equivalent Rights (and, as appropriate, other
Awards under Section 9), so that they are substantially proportionate to the
rights existing in such Options, Phantom Shares and Dividend Equivalent Rights
(and other Awards under Section 9) prior to such event, including, without
limitation, adjustments in (A) the number of Options, Phantom Shares and
Dividend Equivalent Rights (and other Awards under Section 9) granted, (B) the
number and kind of shares or other property to be distributed in respect of
Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under
Section 9 as applicable), (C) the Option Price and Phantom Share Value, and (D)
performance-based criteria established in connection with Awards; provided that,
in the discretion of the Committee, the foregoing clause (D) may also be
applied in the case of any event relating to a Subsidiary if the event would
have been covered under this Section 13(a) had the event related to the
Company.

 

To the extent that such action shall include
an increase or decrease in the number of Shares (or units of other property
then available) subject to all outstanding Awards, the number of Shares (or
units) available under Section 4 shall be increased or decreased, as the case
may be, proportionately, as may be determined by the Committee in its
discretion.

(b)   Any Shares
or other securities distributed to a Grantee with respect to Restricted Stock
or otherwise issued in substitution of Restricted Stock shall be subject to the
restrictions and requirements imposed by Section 6, including depositing the
certificates therefor with the Company together with a stock power and bearing
a legend as provided in Section 6.2(a).

(c)   If the
Company shall be consolidated or merged with another corporation or other
entity, each Grantee who has received Restricted Stock that is then subject to
restrictions imposed by Section 6.3(a) may be required to deposit with the
successor corporation the certificates for the stock or securities or the other
property that the Grantee is entitled to receive by reason of ownership of
Restricted Stock in a manner consistent with Section 6.2(b), and such stock,
securities or other property shall become subject to the restrictions and
requirements imposed by Section 6.3(a), and the certificates therefor or other
evidence thereof shall bear a legend similar in form and substance to the
legend set forth in Section 6.2(a).

(d)   If a Change
in Control shall occur, then the Committee may make such adjustments as it, in
its discretion, determines are necessary or appropriate in light of the Change
in Control, provided that the Committee determines that such adjustments do not
have an adverse economic impact on the Participant as determined at the time of
the adjustments.

(e)   The
judgment of the Committee with respect to any matter referred to in this
Section 13 shall be conclusive and binding upon each Participant without the
need for any amendment to the Plan.

14.  MISCELLANEOUS.

14.1         No Rights to Employment or Other Service.

 

18

 

Nothing in the Plan or in any grant made pursuant to the Plan shall
confer on any individual any right to continue in the employ or other service
of the Company or its Subsidiaries or interfere in any way with the right of
the Company or its Subsidiaries and its shareholders to terminate the
individual’s employment or other service at any time.

14.2         Right of First Refusal; Right of Repurchase.

At the time of grant, the Committee may provide in connection with any
grant made under the Plan that Shares received hereunder shall be subject to a
right of first refusal pursuant to which the Company shall be entitled to
purchase such Shares in the event of a prospective sale of the Shares, subject
to such terms and conditions as the Committee may specify at the time of grant
or (if permitted by the Award Agreement) thereafter, and to a right of
repurchase, pursuant to which the Company shall be entitled to purchase such
Shares at a price determined by, or under a formula set by, the Committee at
the time of grant or (if permitted by the Award Agreement) thereafter.

14.3         No Fiduciary Relationship.

Nothing contained in the Plan (including without limitation Sections
7.5(c) and 8.4(b), and no action taken pursuant to the provisions of the Plan,
shall create or shall be construed to create a trust of any kind, or a
fiduciary relationship between the Company or its Subsidiaries, or their
officers or the Committee, on the one hand, and the Participant, the Company,
its Subsidiaries or any other person or entity, on the other.

14.4         Notices.

All notices under the Plan shall be in writing, and if to the Company,
shall be delivered to the Board or mailed to its principal office, addressed to
the attention of the Board; and if to the Participant, shall be delivered
personally, sent by facsimile transmission or mailed to the Participant at the
address appearing in the records of the Company.  Such addresses may be changed at any time by written notice to
the other party given in accordance with this Section 14.4.

14.5         Exculpation and Indemnification.

The Company shall indemnify and hold harmless the members of the Board
and the members of the Committee from and against any and all liabilities,
costs and expenses incurred by such persons as a result of any act or omission
to act in connection with the performance of such person’s duties,
responsibilities and obligations under the Plan, to the maximum extent
permitted by law.

14.6         Captions.

The use of captions in this Plan is for convenience.  The captions are not intended to provide
substantive rights.

14.7         Governing Law.

THE PLAN SHALL BE
GOVERNED BY THE LAWS OF FLORIDA WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF
LAWS.

 

19

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