Document:

Exhibit 10.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEERFIELD
CAPITAL CORP.

 

FIRST
AMENDED AND RESTATED

 

STOCK
INCENTIVE PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEERFIELD CAPITAL
CORP.

FIRST AMENDED AND
RESTATED

STOCK INCENTIVE
PLAN

 

TABLE
OF CONTENTS

 

	
  Section

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.01.

  	
  Acquiring
  Person

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.02.

  	
  Administrator

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.03.

  	
  Affiliate

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.04.

  	
  Agreement

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.05.

  	
  Associate

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.06.

  	
  Board

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.07.

  	
  Change
  in Control

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.08.

  	
  Code

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.09.

  	
  Committee

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.10.

  	
  Common
  Stock

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.11.

  	
  Company

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.12.

  	
  Continuing
  Director

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.13.

  	
  Control
  Change Date

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.14.

  	
  Corresponding
  SAR

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.15.

  	
  Exchange
  Act

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.16.

  	
  Fair
  Market Value

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.17.

  	
  Incentive
  Award

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.18.

  	
  Manager

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.19.

  	
  Option

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.20.

  	
  Participant

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.21.

  	
  Performance
  Measure

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.22.

  	
  Performance
  Period

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.23.

  	
  Performance
  Shares

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.24.

  	
  Person

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.25.

  	
  Plan

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.26.

  	
  Qualified
  Affiliate

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.27.

  	
  Related
  Entity

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.28.

  	
  SAR

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.29.

  	
  Stock
  Award

  	
  5

  

 

i

 

DEERFIELD CAPITAL
CORP.

FIRST AMENDED AND
RESTATED

STOCK INCENTIVE
PLAN

 

	
  ARTICLE II PURPOSES

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE III ADMINISTRATION

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV ELIGIBILITY

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE V COMMON STOCK
  SUBJECT TO PLAN

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.01.

  	
  Common
  Stock Issued

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.02.

  	
  Aggregate
  Limit

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.03.

  	
  Participant Limit

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.04.

  	
  Reallocation
  of Shares

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI OPTIONS

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.01.

  	
  Award

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.02.

  	
  Option
  Price

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.03.

  	
  Maximum
  Option Period

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.04.

  	
  Nontransferability

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.05.

  	
  Transferable
  Options

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.06.

  	
  Employee
  Status

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.07.

  	
  Exercise

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.08.

  	
  Payment

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.09.

  	
  Change
  in Control

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.10.

  	
  Shareholder
  Rights

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.11.

  	
  Disposition
  of Shares

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII SARS

  	
  9

  
	
   

  	
   

  	
   

  
	
  7.01.

  	
  Award

  	
  9

  
	
   

  	
   

  	
   

  
	
  7.02.

  	
  Maximum
  SAR Period

  	
  9

  
	
   

  	
   

  	
   

  
	
  7.03.

  	
  Nontransferability

  	
  9

  
	
   

  	
   

  	
   

  
	
  7.04.

  	
  Transferable
  SARs

  	
  9

  
	
   

  	
   

  	
   

  
	
  7.05.

  	
  Exercise

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.06.

  	
  Change
  in Control

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.07.

  	
  Employee
  Status

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.08.

  	
  Settlement

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.09.

  	
  Shareholder
  Rights

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII STOCK AWARDS

  	
  11

  
	
   

  	
   

  	
   

  
	
  8.01.

  	
  Award

  	
  11

  
	
   

  	
   

  	
   

  
	
  8.02.

  	
  Vesting

  	
  11

  

 

ii

 

DEERFIELD CAPITAL
CORP.

FIRST AMENDED AND
RESTATED

STOCK INCENTIVE
PLAN

 

	
  8.03.

  	
  Performance
  Objectives

  	
  11

  
	
   

  	
   

  	
   

  
	
  8.04.

  	
  Employee
  Status

  	
  11

  
	
   

  	
   

  	
   

  
	
  8.05.

  	
  Change
  in Control

  	
  11

  
	
   

  	
   

  	
   

  
	
  8.06.

  	
  Shareholder
  Rights

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX PERFORMANCE
  SHARE AWARDS

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.01.

  	
  Award

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.02.

  	
  Earning
  the Award

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.03.

  	
  Payment

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.04.

  	
  Shareholder
  Rights

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.05.

  	
  Nontransferability

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.06.

  	
  Transferable
  Performance Shares

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.07.

  	
  Employee
  Status

  	
  13

  
	
   

  	
   

  	
   

  
	
  9.08.

  	
  Change
  in Control

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE X INCENTIVE AWARDS

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.01.

  	
  Award

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.02.

  	
  Earning
  the Award

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.03.

  	
  Shareholder
  Rights

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.04.

  	
  Nontransferability

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.05.

  	
  Transferable
  Incentive Awards

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.06.

  	
  Employee
  Status

  	
  14

  
	
   

  	
   

  	
   

  
	
  10.07.

  	
  Change
  in Control

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI LIMITATION ON
  BENEFITS

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII ADJUSTMENT
  UPON CHANGE IN COMMON STOCK

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII COMPLIANCE
  WITH LAW AND APPROVAL OF REGULATORY BODIES

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV GENERAL
  PROVISIONS

  	
  16

  
	
   

  	
   

  	
   

  
	
  14.01.

  	
  Effect
  on Employment and Service

  	
  16

  
	
   

  	
   

  	
   

  
	
  14.02.

  	
  Unfunded
  Plan

  	
  16

  
	
   

  	
   

  	
   

  
	
  14.03.

  	
  Rules of
  Construction

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV AMENDMENT

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI DURATION OF
  PLAN

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII EFFECTIVE
  DATE OF PLAN

  	
  17

  

 

iii

 

ARTICLE I

DEFINITIONS

 

1.01.                      Acquiring
Person

 

Acquiring Person means that a Person, considered alone
or together with all Control Affiliates and Associates of that Person, is or
becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of securities representing more than fifty percent
(50%) of the Company’s then outstanding securities entitled to vote generally
in the election of the Board.

 

1.02.                      Administrator

 

Administrator means the Committee and any delegate of
the Committee that is appointed in accordance with Article III.

 

1.03.                      Affiliate

 

Affiliate means any “subsidiary” or “parent”
corporation (as such terms are defined in Section 424 of the Code) of the
Company.

 

1.04.                      Agreement

 

Agreement means a written agreement (including any
amendment or supplement thereto) between the Company and a Participant
specifying the terms and conditions of a Stock Award, an Incentive Award, an
award of Performance Shares or an Option or SAR granted to such Participant.

 

1.05.                      Associate

 

Associate, with respect to any Person, is defined in Rule 12b-2
of the General Rules and Regulations under the Exchange Act.  An Associate does not include the Company or
a majority-owned subsidiary of the Company.

 

1.06.                      Board

 

Board means the Board of Directors of the Company.

 

1.07.                      Change
in Control

 

Change in Control means (i) the ownership or
acquisition by any Person (other than a Qualified Affiliate) of more than fifty percent (50%) of the
Company’s then outstanding voting securities; (ii) the merger or
consolidation of the Company with or into any other Person (other than a
Qualified Affiliate), if, immediately following the merger or consolidation,
Persons who did not own outstanding voting securities immediately before the
merger or consolidation directly or indirectly own more than fifty percent
(50%) of the outstanding shares of voting stock of the surviving entity; (iii) any
one or a series of related sales or conveyances to any Person (other than any
one or more Qualified Affiliates) of all or substantially all of the assets of
the Company; (iv) the complete liquidation or dissolution of the Company;
or (v) Continuing Directors cease to be a majority of the Board.

 

1.08.                      Code

 

Code means the Internal Revenue Code of 1986, and any
amendments thereto.

 

1

 

1.09.                      Committee

 

Committee means the Compensation Committee of the
Board.  During any period in which the
Board does not have a Compensation Committee references in this Plan to the “Committee”
shall mean the Board.

 

1.10.                      Common
Stock

 

Common Stock means the common shares of beneficial
interest of the Company.

 

1.11.                      Company

 

Company means Deerfield Capital Corp., a Maryland
corporation.

 

1.12.                      Continuing
Director

 

Continuing Director means any member of the Board,
while a member of the Board and who was a member of the Board on the effective
date of the adoption of this First Amended and Restated Deerfield Capital Corp.
Stock Incentive Plan or whose nomination for or election to the Board was
recommended or approved by a majority of the Continuing Directors who were then
members of the Board.

 

Control Affiliate with respect to any Person, means an
affiliate as defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.

 

1.13.                      Control
Change Date

 

Control Change Date means the date on which a Change
in Control occurs.  If a Change in
Control occurs on account of a series of transactions, the “Control Change Date”
is the date of the last of such transactions.

 

1.14.                      Corresponding
SAR

 

Corresponding SAR means an SAR that is granted in
relation to a particular Option and that can be exercised only upon the surrender
to the Company, unexercised, of that portion of the Option to which the SAR
relates.

 

1.15.                      Exchange
Act

 

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

 

1.16.                      Fair
Market Value

 

Fair Market Value means, on any given date, the fair
market value of a share of Common Stock as determined by the Committee using
any reasonable method in good faith.

 

1.17.                      Incentive
Award

 

Incentive Award means an award which, subject to such
terms and conditions as may be prescribed by the Committee, entitles the
Participant to receive a cash payment from the Company or an Affiliate.

 

1.18.                      Manager

 

Manager means Deerfield Capital Management LLC or any
other person or entity that may become the manager of the Company after December 17,
2004.

 

2

 

1.19.                      Option

 

Option means a stock option that entitles the holder
to purchase from the Company a stated number of shares of Common Stock at the
price set forth in an Agreement.

 

1.20.                      Participant

 

Participant means an employee of the Company or an
Affiliate, the Manager or any employee of the Manager who provides services to
the Company, a member of the Board, or a person or entity that provides
services to the Company or an Affiliate and who satisfies the requirements of Article IV
and is selected by the Administrator to receive an award of Performance Shares,
a Stock Award, an Incentive Award, an Option, an SAR or a combination thereof.

 

1.21.                      Performance
Measure

 

“Performance Measure” means any one or more of the following selected by the Administrator to measure the performance, for a Performance Period, by the Company, an Affiliate or a business or portfolio unit or segment of the Company or an Affiliate.  A Performance Measure may be (a) an absolute amount or a percentage of an amount, (b) relative to the performance of other companies or benchmarks or indexes, (c) based on absolute values or values based on a share of Common Stock (Share), (d) based on absolute or percentage change in the Performance Measure over a specified period, and (e) basic, diluted or adjusted.  Each Performance Measure shall, to the extent applicable, be determined in accordance with generally accepted accounting principles as consistently applied by the Company, or such other standard applied by the Administrator and, to the extent permitted under Code Section 162(m), adjusted to omit the effects of non-recurring, non-cash or other items, as determined by the Administrator.
 

·                  Total shareholder return, whether
measured as (i) total stock price appreciation plus value of dividends
paid; (ii) the per annum compounded rate of increase in the Fair Market
Value of an investment in Shares on the first day of the Performance Period (assuming
purchase of Shares at their fair market value on such day) through the last day
of the Performance Period, plus all dividends or distributions paid with
respect to such Shares during the Performance Period, and assuming reinvestment
in Shares of all such dividends and distributions; or (iii) other
appropriate method.

 

·                  Total shareholder returns compared with such returns generated by similar businesses.
 

·                  Return on equity.

 

·                  Return on invested capital or assets.

 

·                  Net return on net investment or on
average net investment.

 

·                  REIT taxable income.

 

·                  Cash dividends per Share.

 

·                  Cash flow, cash or funds available
for distributions, and adjusted funds from operations or cash flow.

 

·                  Share price appreciation, meaning an
increase in the price or value of the Shares after the date of grant of an
award, and changes (or the absence thereof) in the price per Share or aggregate
market price of the Shares.

 

·                  GAAP net income.

 

3

 

·                  Total revenues, whether consolidated
or by specific product line.

 

·                  EBITDA, meaning aggregate consolidated
net income for the specified period plus (without duplication and only to the
extent such amount was deducted in calculating such consolidated net income)
any one or more of the following items on a consolidated basis: (i) specified
categories of interest expense; (ii) income taxes; (iii) depreciation
expense; and (iv) amortization expense; and  minus (without duplication and only to the
extent such amount was included in calculating such consolidated net income)
any one or more of the following items on a consolidated basis: (v) specified
categories of interest income; and (vi) other income appropriately
excluded.

 

·                  Operating earnings, meaning income
before taxes, or other appropriate measure of calculating operating earnings.

 

·                  Net earnings.

 

·                  Book value.

 

·                  Ratio of pre-tax net income to gross
income.

 

·                  Assets under investment management
(AUM), whether in total, in specific strategies, funds or accounts, or any
combination thereof.

 

·                  Return on AUM, whether in total or in
specific strategies, funds or accounts.

 

·                  Investment management fees, whether
asset-based, performance-based or any combination thereof, and whether in
total, or in specific strategies, funds or accounts, or any combination
thereof.

 

·                  New originations of assets.

 

·                  Performance with respect to any one
or more of the following specific parameters: revenue, cost, expense, AUM,
investment return or other financial targets, on an absolute basis or relative
to one or more benchmarks or indexes.

 

1.22.                      Performance
Period

 

Performance Period means a fiscal year of the Company or any other
period designated by the Administrator, over which the attainment of one or
more Performance Measures will be calculated to determine a Participant’s
rights in respect of an award.

 

1.23.                      Performance
Shares

 

Performance Shares means an award, in the amount
determined by the Administrator, stated with reference to a specified number of
shares of Common Stock, that in accordance with the terms of an Agreement
entitles the holder to receive a cash payment or shares of Common Stock or a
combination thereof.

 

1.24.                      Person

 

Person means any human being, firm, corporation,
partnership, or other entity.  “Person”
also includes any human being, firm, corporation, partnership, or other entity
as defined in sections 13(d)(3) and 14(d)(2) of the Exchange
Act.  The term “Person” does not include
the Company or any Related Entity, and the term Person does not include any
employee-benefit plan maintained by the Company or any Related Entity, and any
person or entity organized, appointed, or established by the Company or any
Related Entity for or pursuant to the terms of any such 

 

4

 

employee-benefit plan,
unless the Board determines that such an employee-benefit plan or such person
or entity is a “Person”.

 

1.25.                      Plan

 

Plan means this First Amended and Restated Deerfield
Capital Corp. Stock Incentive Plan, adopted on July 2, 2007, which amends
and restates the Deerfield Triarc Capital Corp. Stock Incentive Plan, adopted
on December 17, 2004 (the “Initial Plan”)

 

1.26.                      Qualified
Affiliate

 

Qualified Affiliate means (i) any
directly or indirectly wholly owned subsidiary of the Company; (ii) any
employee benefit plan (or related trust) sponsored or maintained by the Company
or by any entity controlled by the Company; or (iii) any Person directly
or indirectly controlling or controlled by or under common control with the
Company, the Manager or Triarc Companies, Inc. as of the date that the
First Amended and Restated Stock Incentive Plan is adopted by the Board,
including without limitation, Nelson Peltz, Peter May and any Persons
directly or indirectly controlled by or under common control with Nelson Peltz
or Peter May.  For purposes of this
definition, “controlled” when used with respect to any specified Person means
the power to direct or cause the direction of the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

1.27.                      Related
Entity

 

Related Entity means any entity that is part of a
controlled group of corporations or is under common control with the Company
within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code.

 

1.28.                      SAR

 

SAR means a stock appreciation right that in accordance
with the terms of an Agreement entitles the holder to receive, with respect to
each share of Common Stock encompassed by the exercise of such SAR, the amount
determined by the Administrator and specified in an Agreement.  In the absence of such a determination, the
holder shall be entitled to receive, with respect to each share of Common Stock
encompassed by the exercise of such SAR, the excess of the Fair Market Value on
the date of exercise over the Fair Market Value on the date of grant.    References to “SARs” include both
Corresponding SARs and SARs granted independently of Options, unless the
context requires otherwise.

 

1.29.                      Stock
Award

 

Stock Award means shares of Common Stock awarded to a
Participant under Article VIII.

 

ARTICLE II

PURPOSES

 

The Plan is intended to assist the Company and its
Affiliates in recruiting and retaining individuals and other service providers
with ability and initiative by enabling such persons or entities to participate
in the future success of the Company and its Affiliates and to associate their
interests with those of the Company and its shareholders.  The Plan is intended to permit the grant of
both Options qualifying under Section 422 of the Code (“incentive stock
options”) and Options not so qualifying, and the grant of SARs, Stock Awards,
Performance Shares and Incentive Awards in accordance with the Plan and
procedures that may be established by the Administrator.  No Option that is intended to be an incentive
stock option shall be invalid for failure to qualify as an incentive stock
option.  The proceeds received by the
Company from the sale of shares of Common Stock pursuant to this Plan shall be
used for general corporate purposes.

 

5

 

ARTICLE III

ADMINISTRATION

 

The Plan shall be administered by the
Administrator.  The Administrator shall
have authority to grant Stock Awards, Incentive Awards, Performance Shares,
Options and SARs upon such terms (not inconsistent with the provisions of this
Plan), as the Administrator may consider appropriate.  Such terms may include conditions (in
addition to those contained in this Plan), on the exercisability of all or any
part of an Option or SAR or on the transferability or forfeitability of a Stock
Award, an Incentive Award or an award of Performance Shares.  Notwithstanding any such conditions, the
Administrator may, in its discretion, (i) accelerate the time at which any
Option or SAR may be exercised, or the time at which a Stock Award may become
transferable or nonforfeitable or the time at which an award of Performance
Shares may be settled or (ii) suspend the forfeiture of any award made
under this Plan.  In addition, the
Administrator shall have complete authority to interpret all provisions of this
Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan.  The express grant in the Plan of any specific
power to the Administrator shall not be construed as limiting any power or
authority of the Administrator.  Any
decision made, or action taken, by the Administrator in connection with the
administration of this Plan shall be final and conclusive.  Neither the Administrator nor any member of
the Committee shall be liable for any act done in good faith with respect to
this Plan or any Agreement, Option, SAR, Stock Award, Incentive Award or award
of Performance Shares.  All expenses of
administering this Plan shall be borne by the Company.

 

The Committee, in its discretion, may delegate to one
or more officers of the Company all or part of the Committee’s authority and
duties with respect to grants and awards to individuals who are not subject to
the reporting and other provisions of Section 16 of the Exchange Act.  The Committee may revoke or amend the terms
of a delegation at any time but such action shall not invalidate any prior
actions of the Committee’s delegate or delegates that were consistent with the
terms of the Plan and the Committee’s prior delegation.

 

ARTICLE IV

ELIGIBILITY

 

Any employee of the Company or an Affiliate (including
a corporation that becomes an Affiliate after the adoption of this Plan), the
Manager or any employee of the Manager who provides services to the Company,
any member of the Board and any person or entity that provides services to the
Company or an Affiliate (including a corporation that becomes an Affiliate
after the adoption of this Plan) is eligible to participate in this Plan if the
Administrator, in its sole discretion, determines that such person or entity
has contributed significantly or can be expected to contribute significantly to
the profits or growth of the Company or an Affiliate.

 

ARTICLE V

COMMON
STOCK SUBJECT TO PLAN

 

5.01.                     Common
Stock Issued

 

Upon the award of Common Stock pursuant to a Stock
Award or in settlement of an award of Performance Shares, the Company may issue
Common Stock from its authorized but unissued Common Stock.  Upon the exercise of any Option or SAR, the
Company may deliver to the Participant (or the Participant’s broker if the
Participant so directs), shares of Common Stock from its authorized but
unissued Common Stock.

 

5.02.                     Aggregate
Limit

 

The maximum aggregate number of shares of Common Stock
that may be issued under this Plan pursuant to the exercise of SARs and Options
and the grant of Stock Awards and the settlement of Performance Shares is equal
to 6,136,725 shares of Common Stock.  (This
amount includes those shares of Common Stock issued or issuable under awards
granted pursuant to the Initial Plan.)  The
maximum aggregate number of shares of Common 

 

6

 

Stock that may be issued under this Plan and the
maximum number of shares that may be issued upon the exercise of incentive
stock options shall be subject to adjustment as provided in Article XII.

 

5.03.                     Participant Limit

 

No Person may be granted Options,
SARs, Performance Shares or Stock Awards in any calendar year which, in
aggregate, cover more than 1,000,000 shares of Common Stock.

 

5.04.                     Reallocation
of Shares

 

If an Option is terminated, in whole or in part, for
any reason other than its exercise or the exercise of a Corresponding SAR that
is settled with shares of Common Stock, the number of shares allocated to the
Option or portion thereof that is terminated may be reallocated to other Options,
SARs, Performance Shares, and Stock Awards to be granted under this Plan.  If an SAR is terminated, in whole or in part,
for any reason other than its exercise that is settled with shares of Common
Stock or the exercise of a related Option, the number of shares of Common Stock
allocated to the SAR or portion thereof that is terminated may be reallocated
to other Options, SARs, Performance Shares, and Stock Awards to be granted
under this Plan.  If an award of
Performance Shares is terminated, in whole or in part, for any reason other
than its settlement with shares of Common Stock, the number of shares allocated
to the Performance Share award or portion thereof that is terminated may be
reallocated to other Options, SARs, Performance Shares, and Stock Awards to be
granted under this Plan.  If a Stock
Award is forfeited, in whole or in part, for any reason, the number of shares
of Common Stock allocated to the Stock Award or portion thereof that is
forfeited may be reallocated to other Options, SARs, Performance Shares and Stock
Awards to be granted under this Plan.

 

ARTICLE VI

OPTIONS

 

6.01.                     Award

 

In accordance with the provisions of Article IV,
the Administrator will designate each Person to whom an Option is to be granted
and will specify the number of shares of Common Stock covered by such awards.

 

6.02.                     Option
Price

 

The price per share for shares of Common Stock
purchased on the exercise of an Option shall be determined by the Administrator
on the date of grant, but shall not be less than the Fair Market Value on the
date the Option is granted.  Except for
adjustments in accordance with Article XII, the price per share of an
outstanding Option may not be reduced (by amendment, substitution or otherwise)
without the approval of the Company’s shareholders.

 

6.03.                     Maximum
Option Period

 

The maximum period in which an Option may be exercised
shall be determined by the Administrator on the date of grant, except that no
Option shall be exercisable after the expiration of ten years from the date
such Option was granted. The terms of any Option may provide that it is
exercisable for a period less than such maximum period.

 

6.04.                     Nontransferability

 

Except as provided in Section 6.05, each Option
granted under this Plan shall be nontransferable except by will or by the laws
of descent and distribution.  In the
event of any transfer of an Option (by the Participant or his transferee), the
Option and any Corresponding SAR that relates to such Option must be
transferred to the same person or persons or entity or entities.  Except as provided in Section 6.05,
during the lifetime of the Participant to 

 

7

 

whom the Option is granted, the Option may be
exercised only by the Participant.  No
right or interest of a Participant in any Option shall be liable for, or
subject to, any lien, obligation, or liability of such Participant.

 

6.05.                     Transferable
Options

 

Section 6.04 to the contrary notwithstanding, if
the Agreement provides, an Option that is not an incentive stock option may be
transferred by a Participant to the Participant’s children, grandchildren,
spouse, one or more trusts for the benefit of such family members or a
partnership in which such family members are the only partners, on such terms
and conditions as may be permitted under Rule 16b-3 under the Exchange Act
as in effect from time to time and any Option held by the Manager may be
transferred to one or more individuals who provide services to the Manager on
such terms and conditions as may be permitted under Rule 16b-3 under the
Exchange Act as in effect from time to time. 
The holder of an Option transferred pursuant to this Section shall
be bound by the same terms and conditions that governed the Option during the
period that it was held by the Participant; provided, however, that such
transferee may not transfer the Option except by will or the laws of descent
and distribution.  In the event of any
transfer of an Option (by the Participant or his transferee), the Option and
any Corresponding SAR that relates to such Option must be transferred to the
same person or persons or entity or entities.

 

6.06.                     Employee
Status

 

For purposes of determining the applicability of Section 422
of the Code (relating to incentive stock options), or in the event that the
terms of any Option provide that it may be exercised only during employment or
continued service or within a specified period of time after termination of
employment or continued service, the Administrator may decide to what extent
leaves of absence for governmental or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions of continuous
employment or service.

 

6.07.                     Exercise

 

Subject to the provisions of this Plan and the
applicable Agreement, an Option may be exercised in whole at any time or in
part from time to time at such times and in compliance with such requirements
as the Administrator shall determine; provided, however, that incentive stock
options (granted under the Plan and all plans of the Company and its
Affiliates) may not be first exercisable in a calendar year for shares of
Common Stock having a Fair Market Value (determined as of the date an Option is
granted) exceeding $100,000.  An Option
granted under this Plan may be exercised with respect to any number of whole
shares less than the full number for which the Option could be exercised.  A partial exercise of an Option shall not
affect the right to exercise the Option from time to time in accordance with
this Plan and the applicable Agreement with respect to the remaining shares
subject to the Option.  The exercise of
an Option shall result in the termination of any Corresponding SAR to the
extent of the number of shares with respect to which the Option is exercised.

 

6.08.                     Payment

 

Subject to rules established by the Administrator
and unless otherwise provided in an Agreement, payment of all or part of the
Option price may be made in cash, a cash equivalent acceptable to the
Administrator, with shares of Common Stock or a combination of cash, acceptable
cash equivalent or Common Stock.  If
shares of Common Stock are used to pay all or part of the Option price, the sum
of the cash and cash equivalent and the Fair Market Value (determined as of the
day preceding the date of exercise) of the shares surrendered must not be less
than the Option price of the shares for which the Option is being exercised.

 

6.09.                     Change in
Control

 

Section 6.07 to the contrary notwithstanding,
each outstanding Option granted before January 1, 2008 shall be fully
exercisable (in whole or in part at the discretion of the holder) on and after
a Control Change Date.

 

8

 

Section 6.07 to the contrary notwithstanding, the Committee, in
its discretion, shall determine the extent to which the exercisability of an
outstanding Option granted after December 31, 2007, shall be accelerated
on account of a Change in Control and the Committee’s determination may be made
on the date of  the grant of the Option
or thereafter.

 

6.10.                     Shareholder
Rights

 

No Participant shall have any rights as a shareholder
with respect to shares subject to his Option until the date of exercise of such
Option.

 

6.11.                     Disposition
of Shares

 

A Participant shall notify the Company of any sale or
other disposition of shares acquired pursuant to an Option that was an
incentive stock option if such sale or disposition occurs (i) within two
years of the grant of an Option or (ii) within one year of the issuance of
shares to the Participant.  Such notice
shall be in writing and directed to the Secretary of the Company.

 

ARTICLE VII

SARS

 

7.01.                     Award

 

In accordance with the provisions of Article IV,
the Administrator will designate each individual to whom SARs are to be granted
and will specify the number of shares of Common Stock covered by such awards.  No Participant may be granted Corresponding
SARs (under all incentive stock option plans of the Company and its Affiliates)
that are related to incentive stock options which are first exercisable in any
calendar year for shares of Common Stock having an aggregate Fair Market Value
(determined as of the date the related Option is granted) that exceeds
$100,000.

 

7.02.                     Maximum
SAR Period

 

The term of each SAR shall be determined by the
Administrator on the date of grant, except that no SAR shall have a term of
more than ten years or, in the case of a Corresponding SAR, the term of the related
Option.  The terms of any SAR may provide
that it has a term that is less than such maximum period.

 

7.03.                     Nontransferability

 

Except as provided in Section 7.04, each SAR
granted under this Plan shall be nontransferable except by will or by the laws
of descent and distribution.  In the
event of any such transfer, a Corresponding SAR and the related Option must be
transferred to the same person or persons or entity or entities.  Except as provided in Section 7.04,
during the lifetime of the Participant to whom the SAR is granted, the SAR may
be exercised only by the Participant.  No
right or interest of a Participant in any SAR shall be liable for, or subject
to, any lien, obligation, or liability of such Participant.

 

7.04.                     Transferable
SARs

 

Section 7.03 to the contrary notwithstanding, if
the Agreement provides, an SAR, other than a Corresponding SAR that is related
to an incentive stock option, may be transferred by a Participant to the
Participant’s children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such family members
are the only partners, on such terms and conditions as may be permitted under Rule 16b-3
under the Exchange Act as in effect from time to time and any SAR held by the
Manager may be transferred to one or more individuals who provide services to
the Manager on such terms and conditions as may be 

 

9

 

permitted under Rule 16b-3 under the Exchange Act
as in effect from time to time.  The
holder of an SAR transferred pursuant to this Section shall be bound by
the same terms and conditions that governed the SAR during the period that it
was held by the Participant; provided, however, that such transferee may not
transfer the SAR except by will or the laws of descent and distribution.  In the event of any transfer of a
Corresponding SAR (by the Participant or his transferee), the Corresponding SAR
and the related Option must be transferred to the same person or person or
entity or entities.

 

7.05.                     Exercise

 

Subject to the provisions of this Plan and the
applicable Agreement, an SAR may be exercised in whole at any time or in part
from time to time at such times and in compliance with such requirements as the
Administrator shall determine; provided, however, that a Corresponding SAR that
is related to an incentive stock option may be exercised only to the extent
that the related Option is exercisable and only when the Fair Market Value
exceeds the option price of the related Option. 
An SAR granted under this Plan may be exercised with respect to any
number of whole shares less than the full number for which the SAR could be
exercised.  A partial exercise of an SAR
shall not affect the right to exercise the SAR from time to time in accordance
with this Plan and the applicable Agreement with respect to the remaining
shares subject to the SAR.  The exercise
of a Corresponding SAR shall result in the termination of the related Option to
the extent of the number of shares with respect to which the SAR is exercised.

 

7.06.                     Change in
Control

 

Section 7.05 to the contrary notwithstanding,
each outstanding SAR granted before January 1, 2008 shall be fully
exercisable (in whole or in part at the discretion of the holder) on and after
a Control Change Date.

 

Section 7.05 to the contrary notwithstanding, the Committee, in
its discretion, shall determine the extent to which the exercisability of an
outstanding SAR granted after December 31, 2007, shall be accelerated on
account of a Change in Control and the Committee’s determination may be made on
the date of the grant of the SAR or thereafter.

 

7.07.                     Employee
Status

 

If the terms of any SAR provide that it may be
exercised only during employment or continued service or within a specified
period of time after termination of employment or continued service, the
Administrator may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability or other reasons shall not be
deemed interruptions of continuous employment or service.

 

7.08.                     Settlement

 

At the Administrator’s discretion, the amount payable
as a result of the exercise of an SAR may be settled in cash, shares of Common
Stock, or a combination of cash and Common Stock.  No fractional share will be deliverable upon
the exercise of an SAR but a cash payment will be made in lieu thereof.

 

7.09.                     Shareholder
Rights

 

No Participant shall, as a result of receiving an SAR,
have any rights as a shareholder of the Company or any Affiliate until the date
that the SAR is exercised and then only to the extent that the SAR is settled
by the issuance of Common Stock.

 

10

 

ARTICLE VIII

STOCK
AWARDS

 

8.01.                     Award

 

In accordance with the provisions of Article IV,
the Administrator will designate each individual to whom a Stock Award is to be
made and will specify the number of shares covered by such awards.

 

8.02.                     Vesting

 

The Administrator, on the date of the award, may
prescribe that a Participant’s rights in a Stock Award shall be forfeitable or
otherwise restricted for a period of time or subject to such conditions as may
be set forth in the Agreement.

 

8.03.                     Performance
Objectives

 

In accordance with Section 8.02, the
Administrator may prescribe that Stock Awards will become vested or
transferable or both based on such Performance
Measure or Measures as may be selected by the Administrator.  If the Administrator, on the date of award,
prescribes that a Stock Award shall become nonforfeitable and transferable only
upon the attainment of one or more Performance Measures, the shares subject to
such Stock Award shall become nonforfeitable and transferable only to the
extent that the Administrator certifies that such Performance Measure(s) have
been achieved.

 

8.04.                     Employee
Status

 

In the event that the terms of any Stock Award provide
that shares may become transferable and nonforfeitable thereunder only after
completion of a specified period of employment, the Administrator may decide in
each case to what extent leaves of absence for governmental or military
service, illness, temporary disability, or other reasons shall not be deemed
interruptions of continuous employment.

 

8.05.                     Change in
Control

 

Sections 8.02, 8.03 and 8.04 to the contrary
notwithstanding, each outstanding Stock Award granted before January 1,
2008 shall be transferable and nonforfeitable on and after a Control Change
Date.

 

Sections 8.02, 8.03 and 8.04 to the contrary notwithstanding, the
Committee, in its discretion, shall determine the extent to which the transferability
and nonforfeitability of a Stock Award granted after December 31, 2007,
shall be accelerated on account of a Change in Control and the Committee’s
determination may be made on the date of the grant of the Stock Award or
thereafter.

 

8.06.                     Shareholder
Rights

 

Prior to their forfeiture (in accordance with the
applicable Agreement and while the shares of Common Stock granted pursuant to
the Stock Award may be forfeited or are nontransferable), a Participant will
have all rights of a shareholder with respect to a Stock Award, including the
right to receive dividends and vote the shares; provided, however, that during
such period (i) a Participant may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of shares granted pursuant to a Stock Award, (ii) the
Company shall retain custody of the certificates evidencing shares granted
pursuant to a Stock Award, and (iii) the Participant will deliver to the
Company a stock power, endorsed in blank, with respect to each Stock
Award.  The limitations set forth in the
preceding sentence shall not apply after the shares granted under the Stock
Award are transferable and are no longer forfeitable.

 

11

 

ARTICLE IX

PERFORMANCE
SHARE AWARDS

 

9.01.                     Award

 

In accordance with the provisions of Article IV,
the Administrator will designate each individual to whom an award of
Performance Shares is to be made and will specify the number of shares covered
by such awards.

 

9.02.                     Earning
the Award

 

The Administrator, on the date of the grant of an
award, may prescribe that a Participant’s rights in an award of Performance
Shares may be earned only upon satisfaction of requirements prescribed by the
Administrator. In accordance with the preceding sentence, the Administrator may
prescribe that the Performance Shares, or portion thereof, will be earned, and
the Participant will be entitled to receive payment pursuant to the award of
Performance Shares, only upon the satisfaction of performance objectives and
such other criteria as may be prescribed by the Administrator during a
performance measurement period prescribed by the Administrator.  The performance objectives may be stated with
respect to the Company’s, an Affiliate’s or a business unit’s return on equity,
total earnings, earnings per share, earnings growth, return on capital, funds
from operations, Fair Market Value, Common Stock price appreciation, funds from
operations per share, peer stockholder returns or such other measures as may be
selected by the Administrator.  If the
Administrator so prescribes, no payments will be made with respect to
Performance Shares unless, and then only to the extent that, the Administrator
certifies that such objectives have been achieved.

 

9.03.                     Payment

 

In the discretion of the Administrator, the amount
payable when an award of Performance Shares is earned may be settled in cash,
by the issuance of shares of Common Stock, or a combination thereof.  A fractional share of Common Stock shall not
be deliverable when an award of Performance Shares is earned, but a cash
payment will be made in lieu thereof.

 

9.04.                     Shareholder
Rights

 

No Participant shall, as a result of receiving an
award of Performance Shares, have any rights as a shareholder until and to the
extent that the award of Performance Shares is earned and settled in shares of
Common Stock.  After an award of
Performance Shares is earned and settled in shares, a Participant will have all
the rights of a shareholder as described in Section 8.06.

 

9.05.                     Nontransferability

 

Except as provided in Section 9.06, Performance
Shares granted under this Plan shall be nontransferable except by will or by
the laws of descent and distribution.  No
right or interest of a Participant in any Performance Shares shall be liable
for, or subject to, any lien, obligation, or liability of such Participant.

 

9.06.                     Transferable
Performance Shares

 

Section 9.05 to the contrary notwithstanding, if
the Agreement provides, an award of Performance Shares may be transferred by a
Participant to the Participant’s children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in which such
family members are the only partners, on such terms and conditions as may be
permitted under Rule 16b-3 under the Exchange Act as in effect from time
to time and any award of Performance Shares held by the Manager may be
transferred to one or more individuals who provide services to the Manager on
such terms and conditions as may be permitted under Rule 16b-3 under the
Exchange Act as in effect from time to time. 
The holder of Performance Shares transferred pursuant to this Section shall
be bound by the same terms and conditions that governed the Performance Shares
during the period that they were held 

 

12

 

by the Participant; provided, however that such
transferee may not transfer Performance Shares except by will or the laws of
descent and distribution.

 

9.07.                     Employee
Status

 

In the event that the terms of any Performance Share
award provide that no payment will be made unless the Participant completes a
stated period of employment or continued service, the Administrator may decide
to what extent leaves of absence for government or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of
continuous employment or service.

 

9.08.                     Change in
Control

 

Section 9.02 to the contrary notwithstanding, on
and after a Control Change Date, each outstanding Performance Share award granted
before January 1, 2008 shall be earned as of a Control Change Date and any
shares of Common Stock issued as of the Control Change Date in settlement of
the Performance Shares shall be nonforfeitable and transferable as of the
Control Change Date.  Section 9.02
to the contrary notwithstanding, the Committee, in its discretion, shall
determine the extent to which a Performance Share award granted after December 31,
2007 shall be earned on account of a Change in Control and whether any shares
of Common Stock issued in settlement of the Performance Shares shall be
nonforfeitable and transferable as of the Control Change Date, and the
Committee’s determination may be made on the date of the grant of the
Performance Share or thereafter.

 

ARTICLE X

INCENTIVE
AWARDS

 

10.01.               Award.

 

The Administrator shall designate Participants to whom
Incentive Awards are made.  All Incentive
Awards shall be finally determined exclusively by the Administrator under the
procedures established by the Administrator; provided, however, that no
Participant may receive an Incentive Award payment in any Performance Period
that exceeds $10,000,000.

 

10.02.               Earning the Award

 

The Administrator, on the date of the grant of an
award, shall prescribe that the Incentive Award, or portion thereof, will be
earned, and the Participant will be entitled to receive payment pursuant to the
grant of an Incentive Award, only upon the satisfaction of one or ore
Performance Measures specified by the Administrator.  No payments will be made with respect to such
Incentive Awards unless, and then only to the extent that, the Administrator
certifies that the specified Performance Measure(s) have been achieved.

 

10.03.               Shareholder Rights

 

No Participant shall, as a result of receiving an
Incentive Award, have any rights as a shareholder.

 

10.04.               Nontransferability.

 

Except as provided in Section 10.05, Incentive
Awards granted under this Plan shall be nontransferable except by will or by
the laws of descent and distribution.  No
right or interest of a Participant in any Incentive Awards shall be liable for,
or subject to, any lien, obligation, or liability of such Participant.

 

10.05.               Transferable Incentive
Awards

 

Section 10.04 to the contrary notwithstanding, if
the Agreement provides, an Incentive Award may be transferred by a Participant
to the Participant’s children, grandchildren, spouse, one or more trusts for
the benefit of 

 

13

 

such family members or a partnership in which such
family members are the only partners, on such terms and conditions as may be
permitted under Rule 16b-3 under the Exchange Act as in effect from time
to time and any Incentive Award held by the Manager may be transferred to one
or more individuals who provide services to the Manager on such terms and
conditions as may be permitted under Rule 16b-3 under the Exchange Act as
in effect from time to time.  The holder
of Incentive Awards transferred pursuant to this Section shall be bound by
the same terms and conditions that governed the Incentive Award during the
period that they were held by the Participant; provided, however that such
transferee may not transfer Incentive Awards except by will or the laws of
descent and distribution.

 

10.06.               Employee Status.

 

  In the event
that the terms of any Incentive Award provide that no payment will be made
unless the Participant completes a stated period of employment or continued
service, the Administrator may decide to what extent leaves of absence for
government or military service, illness, temporary disability, or other reasons
shall not be deemed interruptions of continuous employment or service.

 

10.07.               Change in Control

 

Section 10.02 to the contrary notwithstanding, on
and after a Control Change Date, each outstanding Incentive Award granted
before January 1, 2008 shall be earned as of a Control Change Date.  Section 10.02 to the contrary
notwithstanding, the Committee, in its discretion, shall determine the extent
to which an Incentive Award granted after December 31, 2007, shall be
earned on account of a Change in Control and the Committee’s determination may
be made on the date of the grant of the Incentive Award or thereafter.

 

ARTICLE XI

LIMITATION
ON BENEFITS

 

The benefits that a Participant may be entitled to
receive under this Plan and other benefits that a Participant is entitled to
receive under other plans, agreements and arrangements (which, together with
the benefits provided under this Plan, are referred to as “Payments”), may
constitute Parachute Payments that are subject to Code Sections 280G and
4999.  As provided in this Article XI,
the Parachute Payments will be reduced if, and only to the extent that, a
reduction will allow a Participant to receive a greater Net After Tax Amount
than a Participant would receive absent a reduction.

 

The Accounting Firm will first determine the amount of
any Parachute Payments that are payable to a Participant.  The Accounting Firm also will determine the
Net After Tax Amount attributable to the Participant’s total Parachute
Payments.

 

The Accounting Firm will next determine the largest
amount of Payments that may be made to the Participant without subjecting the
Participant to tax under Code Section 4999 (the “Capped Payments”).  Thereafter, the Accounting Firm will
determine the Net After Tax Amount attributable to the Capped Payments.

 

The Participant will receive the total Parachute
Payments or the Capped Payments, whichever provides the Participant with the
higher Net After Tax Amount.  If the
Participant will receive the Capped Payments, the total Parachute Payments will
be adjusted by first reducing the amount of any noncash benefits under this
Plan or any other plan, agreement or arrangement (with the source of the
reduction to be directed by the Participant) and then by reducing the amount of
any cash benefits under this Plan or any other plan, agreement or arrangement
(with the source of the reduction to be directed by the Participant).  The Accounting Firm will notify the
Participant and the Company if it determines that the Parachute Payments must
be reduced to the Capped Payments and will send the Participant and the Company
a copy of its detailed calculations supporting that determination.

 

As a result of the uncertainty in the application of
Code Sections 280G and 4999 at the time that the Accounting Firm makes its
determinations under this Article XI, it is possible that amounts will
have been paid or 

 

14

 

distributed to the Participant that should not have
been paid or distributed under this Article XI (“Overpayments”), or that
additional amounts should be paid or distributed to the Participant under this Article XI
(“Underpayments”).  If the Accounting
Firm determines, based on either the assertion of a deficiency by the Internal
Revenue Service against the Company or the Participant, which assertion the
Accounting Firm believes has a high probability of success or controlling
precedent or substantial authority, that an Overpayment has been made, the
Participant must repay to the Company, without interest; provided, however,
that no loan will be deemed to have been made and no amount will be payable by
the Participant to the Company unless, and then only to the extent that, the
deemed loan and payment would either reduce the amount on which the Participant
is subject to tax under Code Section 4999 or generate a refund of tax
imposed under Code Section 4999.  If
the Accounting Firm determines, based upon controlling precedent or substantial
authority, that an Underpayment has occurred, the Accounting Firm will notify
the Participant and the Company of that determination and the amount of that
Underpayment will be paid to the Participant promptly by the Company.

 

For purposes of this Article XI, the term “Accounting
Firm” means the independent accounting firm engaged by the Company immediately
before the Control Change Date.  For
purposes of this Article XI, the term “Net After Tax Amount” means the
amount of any Parachute Payments or Capped Payments, as applicable, net of
taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or
local income taxes applicable to the Participant on the date of payment.  The determination of the Net After Tax Amount
shall be made using the highest combined effective rate imposed by the
foregoing taxes on income of the same character as the Parachute Payments or
Capped Payments, as applicable, in effect on the date of payment.  For purposes of this Article XI, the
term “Parachute Payment” means a payment that is described in Code Section 280G(b)(2),
determined in accordance with Code Section 280G and the regulations
promulgated or proposed thereunder.

 

Notwithstanding any other provision of this Article XI,
the limitations and provisions of this Article XI shall not apply to any
Participant who, pursuant to an agreement with the Company or the terms of
another plan maintained by the Company, is entitled to indemnification for any
liability that the Participant may incur under Code Section 4999.

 

ARTICLE XII

ADJUSTMENT
UPON CHANGE IN COMMON STOCK

 

The maximum number of shares as to which Options,
SARs, Performance Shares, and Stock Awards may be granted; the terms of
outstanding Stock Awards, Incentive Awards, Options, Performance Shares and
SARs; the limitation on the number of shares of Common Stock that may be issued
pursuant to the exercise of Options that are incentive stock options; and the
per Person grant limitations shall be adjusted as the Board shall determine to
be equitably required in the event that (i) the Company (a) effects
one or more stock dividends, stock split-ups, subdivisions or consolidations of
shares or (b) engages in a transaction to which Section 424 of the
Code applies or (ii) there occurs any other event which, in the judgment
of the Board necessitates such action. 
Any determination made under this Article XII by the Board shall be
final and conclusive.

 

The issuance by the Company of stock of any class, or
securities convertible into stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefore, or upon conversion of stock or obligations of
the Company convertible into such stock or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the maximum
number of shares as to which Options, SARs, Performance Shares, and Stock
Awards may be granted; the limitation on the number of shares of Common Stock
that may be issued pursuant to the exercise of Options that are incentive stock
options; the terms of outstanding Stock Awards, Incentive Awards, Options,
Performance Shares or SARs; or the per Person grant limitations.

 

The Committee may make Stock Awards and Incentive
Awards and may grant Options, SARs and Performance Shares in substitution for
performance shares, phantom shares, stock awards, stock options, stock
appreciation rights, or similar awards held by an individual who becomes an
employee of the Company or an Affiliate in connection with a transaction
described in the first paragraph of this Article XII.  Notwithstanding any 

 

15

 

provision of the Plan (other than the limitation of Section 5.02),
the terms of such substituted Stock Awards, Options, SARs, Incentive Awards, or
Performance Shares shall be as the Committee, in its discretion, determines is
appropriate.

 

ARTICLE XIII

COMPLIANCE
WITH LAW AND APPROVAL OF REGULATORY BODIES

 

No Option or SAR shall be exercisable, no shares of
Common Stock shall be issued, no certificates for shares of Common Stock shall
be delivered, and no payment shall be made under this Plan except in compliance
with all applicable federal and state laws and regulations (including, without
limitation, withholding tax requirements), any listing agreement to which the
Company is a party, and the rules of all domestic stock exchanges on which
the Company’s shares may be listed.  The
Company shall have the right to rely on an opinion of its counsel as to such
compliance.  Any stock certificate issued
to evidence shares of Common Stock when a Stock Award is granted, a Performance
Share is settled or for which an Option or SAR is exercised may bear such
legends and statements as the Administrator may deem advisable to assure
compliance with federal and state laws and regulations.  No Option or SAR shall be exercisable, no
Stock Award or Performance Share shall be granted, no shares of Common Stock
shall be issued, no certificate for shares of Common Stock shall be delivered,
and no payment shall be made under this Plan until the Company has obtained
such consent or approval as the Administrator may deem advisable from
regulatory bodies having jurisdiction over such matters.

 

No Option or SAR shall be exercisable, no shares of
Common Stock shall be issued, no certificates for shares of Common Stock shall
be delivered, and no payment shall be made under this Plan, if such action
would result in a Participant or other person owning, directly or indirectly,
shares of Common Stock, or any other class of capital stock, which would be
inconsistent with (i) the Real Estate Investment Trust ownership rules contained
in the Code and regulations, including the “closely held” requirement under
Sections 856(a)(6) and 856(h) of the Code, or (ii) any
restrictions contained in the Company’s Charter or Articles of Incorporation
that are in effect to preserve the Company’s status as a Real Estate Investment
Trust.  Among other things, with
enumerated exceptions, the Company’s Charter or Articles of Incorporation may
provide that (a) generally no person may own, directly or indirectly under
the attribution provisions of the Code, more than a stated percentage in value
or number of the outstanding shares of any class or series of the Company’s
capital stock and (b) no person may beneficially or constructively own or
transfer shares of the Company’s capital stock if that ownership or transfer
would result in the Company being “closely held” under Section 856(h) of
the Code.

 

ARTICLE XIV

GENERAL
PROVISIONS

 

14.01.               Effect on Employment and
Service

 

Neither the adoption of this Plan, its operation, nor
any documents describing or referring to this Plan (or any part thereof), shall
confer upon any individual or entity any right to continue in the employ or
service of the Company or an Affiliate or in any way affect any right or power
of the Company or an Affiliate to terminate the employment or service of any
individual or entity at any time with or without assigning a reason therefor.

 

14.02.               Unfunded Plan

 

This Plan, insofar as it provides for grants, shall be
unfunded, and the Company shall not be required to segregate any assets that
may at any time be represented by grants under this Plan.  Any liability of the Company to any person
with respect to any grant under this Plan shall be based solely upon any contractual
obligations that may be created pursuant to this Plan.  No such obligation of the Company shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company.

 

16

 

14.03.               Rules of Construction

 

Headings are given to the articles and sections of
this Plan solely as a convenience to facilitate reference.  The reference to any statute, regulation, or
other provision of law shall be construed to refer to any amendment to or successor
of such provision of law.

 

ARTICLE XV

AMENDMENT

 

The Board may amend or terminate this Plan from time
to time; provided, however, that no amendment may become effective until
shareholder approval is obtained if that approval is required under applicable
law or the rules and regulations of any exchange on which the Common Stock
is listed.  No amendment shall, without a
Participant’s consent, adversely affect any rights of such Participant under
any Stock Award, Performance Share award, Option or SAR outstanding at the time
such amendment is made.

 

ARTICLE XVI

DURATION
OF PLAN

 

No Stock Award, Performance Share
Award, Option or SAR may be granted under this Plan after July 1,
2017.   Stock Awards, Performance Share
awards, Options and SARs granted before that date, whether pursuant to the Plan
or the Initial Plan, shall remain valid in accordance with their terms.

 

ARTICLE XVII

EFFECTIVE
DATE OF PLAN

 

Options, SARs, Performance Shares, Stock Awards and
Incentive Awards may be granted under this Plan on and after the date that it
is approved by a majority of the votes entitled to be cast by the Company’s
shareholders, voting in person or by proxy, at a duly held shareholders’
meeting.

 

17Exhibit 10.3

 

DEERFIELD CAPITAL CORP.

 

Performance Share Award Agreement

 

This
Agreement (the “Agreement”), dated               ,
2009 (the “Effective Date”), between Deerfield Capital Corp., a Maryland
corporation (“DFR”), and                                     
(the “Participant”), is made pursuant and subject to DFR’s First Amended and
Restated Stock Incentive Plan (the “Plan”), a copy of which is attached hereto.  All terms used herein that are defined in the
Plan have the meanings given them in the Plan.

 

1.                                       Grant
of Performance Shares. 
Pursuant to the Plan, DFR hereby grants to the Participant, subject to
the terms of the Plan and those herein set forth, an award of                     
Performance Shares.

 

2.                                       Vesting.  The Participant’s rights in the Performance
Shares are immediately vested and nonforfeitable.

 

3.                                       Dividend
Equivalents.  The number
of Performance Shares subject to this Agreement shall be automatically
increased on account of the payment of dividends and other distributions paid
on or after the Effective Date and on or before the “Settlement Date,” which is
the earlier of (a) May 19, 2012 or (b) the date, within three
months after a Control Change Date, on which no Continuing Director remains a
Board member if the change in the membership of the Board constitutes a change
in the effective control of DFR under Treas. Reg. § 1.409A-3(i)(5)(vi)(2).

 

Except
for dividends or distributions paid in shares of Common Stock, such increase shall
equal the amount determined by (a) multiplying the dividend or
distribution paid on each share of Common Stock by the number of Performance
Shares then credited to the Participant and (b) dividing that product by
the Fair Market Value on the date of the dividend payment or distribution.  The number of Performance Shares subject hereto
shall be adjusted for dividends, distributions, or other adjustments paid in
shares of Common Stock on or after the Effective Date and on or before the
Settlement Date in accordance with Paragraph 7.

 

4.                                       Form of
Payment.  The form of
payment in settlement of the Performance Shares shall be determined under
Paragraph 5 or 6, as applicable.

 

5.                                       Form of
Settlement.  Except as
provided in Paragraph 6, the Performance Shares subject hereto (including any
additional Performance Shares credited under Paragraph 3), shall be settled on
the Settlement Date by the issuance of a number of whole shares of Common Stock
equal to the number of whole Performance Shares subject to this Agreement on
the Settlement Date.  No payment will be
made hereunder for a fractional Performance Share, and any fractional
Performance Share subject hereto on the Settlement Date will be disregarded.

 

6.                                       Change
in Control.  This Paragraph
6 applies if there is a Change in Control before May 19, 2012 and the
Change in Control does not result in a Settlement Date under Paragraph 3 that
is before May 19, 2012.  In that
event, each Performance Share credited to the

 

 

Participant
on the Control Change Date shall be converted into the right to receive a
benefit, payable on the Settlement Date, based on the consideration received by
DFR stockholders (cash, stock or other property), for each share of Common
Stock in the transaction that constitutes the Change in Control.

 

If
the consideration received by the stockholders in that transaction includes
cash, then the cash component of the benefit payable to the Participant hereunder
shall be credited with notional interest, from the Control Change Date until
the date of payment under this Paragraph 6, at a rate equal to the interest
rate payable on 3-month U.S. Treasury bills during that period (adjusted on the
first day of each month).  If the
consideration received by the stockholders in that transaction includes stock,
then the stock component of the benefit payable to the Participant hereunder shall
include dividend equivalents, calculated in accordance with Paragraph 3, with
respect to dividends paid on that stock from the Control Change Date until the
date of payment under this Paragraph 6.

 

7.                                       Change
in Capital Structure.  Notwithstanding
any provision hereof that may be to the contrary, the  terms hereof and the number of Performance
Shares subject hereto shall be adjusted as the Board determines is equitably
required if DFR effects one or more stock dividends, stock split-ups,
subdivisions or consolidations of shares (including reverse stock splits) or
similar changes in capitalization.

 

8.                                       Notices.  Any notice or communication to DFR with
respect to this Agreement must be in writing, directed to DFR’s Secretary and
mailed (by first class mail) or delivered to DFR’s principal office.  Any notice or communication or payment to the
Participant with respect to this Agreement must be in writing, addressed to the
Participant and mailed (by first class mail) or delivered to the address last
given to DFR by the Participant.  The
Participant shall promptly advise DFR (in accordance with the first sentence of
this paragraph) of any change in his address. 
DFR shall not have any liability for the Participant’s failure to
receive any notice, communication or payment if it is sent by DFR to the last
address given to DFR by the Participant.

 

9.                                       Miscellaneous.
 This Agreement shall be governed
by Maryland law.  In the event of any
conflict between the provisions of the Plan as in effect on the date hereof and
the provisions of this Agreement, the provisions of the Plan shall govern.  All references herein to the Plan shall mean
the Plan as in effect on the date hereof.  The Participant acknowledges that a copy of
the Plan is attached hereto and agrees to be bound by all the terms thereof.  Subject to the limitations stated above and in
the Plan, this Agreement shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of the Participant and the
successors of DFR.

 

2

 

IN WITNESS WHEREOF, DFR has
caused this Agreement to be signed by a duly authorized officer, and the
Participant has affixed his signature hereto.

 

 

	
  DEERFIELD
  CAPITAL CORP.  

  	
  [NAME
  OF PARTICIPANT]

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
				

 

3

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