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MUNICIPAL MORTGAGE & EQUITY, LLC

2004 SHARE INCENTIVE PLAN

     1.       Purpose. The purpose of this 2004 Share Incentive Plan (the “Plan”)
of Municipal Mortgage & Equity, LLC, a Delaware limited liability company (the
“Company”), is to advance the interests of the Company and its shareholders by
providing a means to attract, retain, and reward executive officers and other
key individuals of the Company and its subsidiaries, to link compensation to
measures of the Company’s performance in order to provide additional
share-based incentives to such individuals for the creation of shareholder
value, and to promote ownership of a greater proprietary interest in the
Company, thereby aligning such individuals’ interests more closely with the
interests of shareholders of the Company.

     2.       Definitions. The definitions of awards under the Plan, including
Options, SARs (including Limited SARs), Restricted Shares, Deferred Shares, and
Shares granted as a bonus or in lieu of other awards are set forth in Section 6
of the Plan. Such awards, together with any other right or interest granted to
a Participant under the Plan, are termed “Awards.” The definitions of terms
relating to a Change in Control of the Company are set forth in Section 8 of
the Plan. In addition to such terms and the terms defined in Section 1, the
following are defined terms under the Plan:

     (a)     “Award Agreement” means any written agreement, contract, notice to a
Participant, or other instrument or document evidencing an Award.

     (b)     “Beneficiary” means the person, persons, trust, or trusts which have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under
this Plan upon such Participant’s death. If, upon a Participant’s death, there
is no designated Beneficiary or surviving designated Beneficiary, then the term
Beneficiary means the Participant’s estate.

     (c)     “Board” means the Board of Directors of the Company.

     (d)     “Code” means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code include regulations
thereunder and successor provisions and regulations thereto.

     (e)     “Committee” means the Share Incentive Committee, or such other Board
committee as may be designated by the Board to administer the Plan.

     (f)     “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act include the
rules promulgated thereunder and successor provisions and rules thereto.

     (g)     “Fair Market Value” of a Share means, as of any given date, the
closing sales price of a Share on the New York Stock Exchange for such date or,
if such day was not a trading day, the closing sales price for the most recent
trading day prior to such date.

     (h)     “Participant” means a person who, as an executive officer, key
employee or key independent contractor of the Company or a subsidiary, has been
granted an Award under the Plan which remains outstanding.

     (i)     “Rule 16b-3” means Exchange Act Rule 16b-3 as from time to time in
effect and applicable to the Plan and Participants.

     (j)     “Share” means a Common Share of the Company and such other securities
as may be substituted for such Share or such other securities pursuant to
Section 8.

     3.       Administration.

     (a)     Composition of Committee. The Committee 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. 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)     Authority of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions
of the Plan:

	 	 	          (i)         to select Participants to whom Awards may be granted;
	 
	 	 	          (ii)        to determine the type or types of Awards to be granted to each
Participant;
	 
	 	 	          (iii)       to determine the number of Awards to be granted, the number of
Shares to which an Award will relate, the terms and conditions of any
Award granted under the Plan (including, but not limited to, any exercise
price, grant price, or purchase price, any restriction or condition, any
schedule or performance conditions for the lapse of restrictions or
conditions relating to transferability, forfeiture, exercisability, or
settlement of an Award, and waivers, accelerations, or modifications
thereof, based in each case on such considerations as the Committee shall
determine), and all other matters to be determined in connection with an
Award;
	 
	 	 	          (iv)       to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Shares, other Awards, or other property, or an Award
may be canceled, forfeited, or surrendered;
	 
	 	 	          (v)        to determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, or other property payable with
respect to an Award will be deferred either automatically, at the election
of the Committee, or at the election of the Participant;
	 
	 	 	          (vi)       to prescribe the form of each Award Agreement, which need not be
identical for each Participant;
	 
	 	 	          (vii)      to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
	 
	 	 	          (viii)     to correct any defect or supply appropriate text for any
omission or reconcile any inconsistency in the Plan and to construe and
interpret the Plan and any Award, rules and regulations, Award Agreement,
or other instrument hereunder, with such constructions and interpretations
to be conclusive and binding on all persons and otherwise accorded the
maximum deference permitted by law, provided that, the Committee’s
construction and interpretation shall not be entitled to deference on and
after a Change in Control except to the extent that such constructions and
interpretations are made exclusively by members of the Committee who are
individuals who served as Committee members before the Change in Control;
	 
	 	 	          (ix)        to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan; and
	 
	 	 	          (x)         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, except as provided in clause (viii), 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.

     (c)     Manner of Exercise of Committee Authority. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Company’s
Amended and Restated Certificate of Formation and Operating Agreement, or
applicable law, the Committee shall have discretion to exercise authority under
the Plan. Any action of the Committee with respect to the Plan shall be final,
conclusive, and binding on all persons, including
the Company, subsidiaries of the Company, Participants, any person
claiming any rights under the Plan from or

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through any Participant, and
Shareholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. To the extent permitted by applicable
law, the Committee may delegate to officers or employees of the Company or any
subsidiary the authority, subject to such terms as the Committee shall
determine, (i) to perform administrative functions, (ii) with respect to
Participants not subject to Section 16 of the Exchange Act, to perform such
other functions of the Committee as the Committee may determine, and (iii) with
respect to Participants subject to Section 16, to perform such other functions
of the Committee as the Committee may determine to the extent performance of
such functions will not result in the loss of an exemption under Rule 16b-3
otherwise available for transactions by such persons. 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.

     (d)     Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Company or any
subsidiary, the Company’s independent certified public accountants, or any
executive compensation consultant, legal counsel, or other professional
retained by the Company to assist in the administration of the Plan. No member
of the Committee, nor any officer or employee of the Company acting on behalf
of the Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Company acting on
behalf of the Committee or members thereof shall, to the extent permitted by
law, be fully indemnified, held harmless and protected by the Company with
respect to any such action, determination, or interpretation.

     4.       Shares Available Under Plan; Individual Award Limitations; Adjustments.

     (a)     Shares Reserved for Awards. Subject to adjustment as hereinafter
provided, the total number of Shares reserved and available for issuance to
Participants in connection with Awards under the Plan shall be 1,000,000
Shares; provided, however, that the number of Shares issued as Restricted
Shares shall not exceed 20% of such total; the number of Shares issued as
Awards other than Options (including Restricted Shares) shall not exceed 40% of
such total; and the number of Shares with respect to which Awards of Options
and SARs may be granted to any Participant shall not exceed 500,000 during any
12 month period. No Award may be granted if the number of Shares to which such
Award relates, when added to the number of Shares to which other
then-outstanding Awards relate, exceeds an applicable limitation on the number
of Shares then remaining available for issuance under this Section 4. If all or
any portion of an Award is forfeited, settled in cash, or terminated without
issuance of Shares to the Participant, the Shares to which such Award or
portion thereof related shall again be available for Awards under the Plan, and
such Award or portion thereof shall not count against the percentage
limitations applicable to Restricted Shares and Awards other than Options;
provided, however, that Shares withheld in payment of the exercise price of any
Option or withholding taxes relating to any Award and Shares equal to the
number of Shares surrendered in payment of the exercise price of any Option or
withholding taxes relating to any Award shall, for purposes of this provision,
be deemed not to have been issued to the Participant in connection with such
Awards under the Plan. The Committee may adopt procedures for the counting of
Shares relating to any Award to ensure appropriate counting and avoid double
counting (in the case of tandem or substitute awards). Any Shares issued
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares, treasury Shares, or Shares acquired in the market for the
account of the Participant (which treasury Shares or acquired Shares will be
deemed to have been “issued” pursuant to such Award).

     (b)     Adjustments.

	 	 	          (i)     In the event that the Committee shall determine that any
recapitalization, reorganization, merger, consolidation, spin-off,
combination, repurchase, exchange of Shares or other securities of the
Company, stock split or reverse split, extraordinary dividend (whether in
the form of cash, Shares, or other property), liquidation, dissolution, or
other similar corporate transaction or event affects the Shares
such that an adjustment is appropriate in order to prevent dilution
or enlargement of each Participant’s rights under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or

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	 	 	all of (i) the number and kind of Shares remaining reserved and available
for issuance under Section 4(a), (ii) the number and kind of outstanding
Restricted Shares or Restricted Shares relating to any other outstanding
Award in connection with which Restricted Shares may be issued, (iii) the
number and kind of Shares that may be issued in respect of other
outstanding Awards and (iv) the exercise price or grant price relating to
any Award (or, if deemed appropriate, the Committee may make provision for
a cash payment with respect to any outstanding Award). In addition, the
Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, events described in
the preceding sentence) affecting the Company or any subsidiary or the
financial statements of the Company or any subsidiary, or in response to
changes in applicable laws, regulations, or accounting principles.
	 
	 	 	          (ii)     If the Company shall be consolidated or merged with another
corporation or other entity, each Participant who has received Restricted
Shares that are then subject to restrictions imposed by Section 6(d) may
be required to deposit with the successor corporation the certificates for
the stock or securities or the other property that the Participant is
entitled to receive by reason of ownership of Restricted Shares in a
manner consistent with Section 6(d)(iii), and such stock, securities or
other property shall become subject to the restrictions and requirements
imposed by Section 6(d), and the certificates therefor or other evidence
thereof shall bear a legend similar in form and substance to the legend
referred to in Section 6(d)(iii).
	 
	 	 	          (iii)     The judgment of the Committee with respect to any matter
referred to in this Sub-section (b) shall be conclusive and binding upon
each Participant without the need for any amendment to the Plan.

     5.       Eligibility. Executive officers, other key employees and other key
independent contractors of the Company and its subsidiaries, including any
director who is also an executive officer or employee, are eligible to be
granted Awards under the Plan; provided, however, that members of the Committee
are not eligible to be granted Awards under the Plan.

     6.       Specific Terms of Awards.

     (a)     General. Awards may be granted on the terms and conditions set forth
in this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 9(f)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms requiring
forfeiture of Awards in the event of termination of employment by the
Participant or upon the occurrence of other events. In addition, the Committee
shall require, as the condition of the issuance of Shares in connection with
any Award, that consideration be received by the Company which meets the
requirements of the Delaware Limited Liability Company Act.

     (b)     Options. The Committee is authorized to grant Options (which are not
to be treated as incentive options under Section 422 of the Code) to
Participants (including “reload” options automatically granted upon the
occurrence of specified exercises of options) on the following terms and
conditions:

	 	 	          (i)     Exercise Price. The exercise price per Share purchasable under
an Option shall be determined by the Committee without regard to the Fair
Market Value of a Share on the date of grant of the Option.
	 
	 	 	         (ii)     Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part, the
methods by which such exercise price may be paid or deemed to be paid, the
form of such payment, including, without limitation, cash, Shares, other
Awards or awards granted under other Company plans, or other property
(including notes or other contractual obligations of Participants to make
payment on a deferred basis, such as through “cashless exercise”
arrangements, to the extent permitted by applicable law), and the methods
by which Shares will be delivered or deemed to be delivered to Participants.
	 
	 	 	          (iii)   Forfeiture. Except as otherwise determined by the Committee,
upon termination of 

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	 	 	employment or contract during the applicable term of
the Options, unexercised Options shall be forfeited and again be
available for Award by the Company; provided, however, that the Committee
may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that forfeiture conditions relating to
the Options will be waived in whole or in part in the event of
terminations resulting from specified causes.
	 
	 	 	          (iv)     Dividend Equivalents. The Committee may provide that payments
in the form of dividend equivalents will be credited in respect of an
Option. The amount of the dividend equivalent shall be credited on the
dividend payment date in any of the following forms: in cash, or in
unrestricted Shares having a Fair Market Value equal to the amount of such
dividends, or in options to acquire additional shares under the Option at
no cost based on the dividend payments, or in a reduction of the exercise
price of the Option. If the Committee provides for crediting dividend
equivalents in the form of additional Options or Shares, such dividend
equivalents must be approved by the Committee before such Options or
Shares can be credited to the Participant.

     (c)     Share Appreciation Rights. The Committee is authorized to grant SARs
to Participants on the following terms and conditions:

	 	 	          (i)     Right to Payment. A SAR shall confer on the Participant to whom
it is granted a right to receive, upon exercise thereof, the excess of (A)
the Fair Market Value of one Share on the date of exercise (or, if the
Committee shall so determine, the Fair Market Value of one Share at any
time during a specified period before or after the date of exercise), over
(B) the grant price of the SAR as determined by the Committee as of the
date of grant of the SAR.
	 
	 	 	          (ii)     Other Terms. The Committee shall determine the time or times at
which a SAR may be exercised in whole or in part, the method of exercise,
method of settlement, form of consideration payable in settlement, method
by which Shares will be delivered or deemed to be delivered to
Participants, whether or not a SAR shall be in tandem with any other
Award, and any other terms and conditions of any SAR. Limited SARs that
may only be exercised upon the occurrence of a Change in Control (as such
term is defined in Section 8(b) or as otherwise defined by the Committee)
may be granted on such terms, not inconsistent with this Section 6(c), as
the Committee may determine. Such Limited SARs may be either freestanding
or in tandem with other Awards.
	 
	 	 	          (iii)     Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or contract during the applicable term of
the SARs, unexercised SARs shall be forfeited and again be available for
Award by the Company; provided, however, that the Committee may provide,
by rule or regulation or in any Award Agreement, or may determine in any
individual case, that forfeiture conditions relating to the SARs will be
waived in whole or in part in the event of terminations resulting from
specified causes.

     (d)     Restricted Shares. The Committee is authorized to grant Restricted
Shares to Participants on the following terms and conditions:

	 	 	          (i)     Grant and Restrictions. The Committee may provide a specified
purchase price for the Restricted Shares (whether or not any State law
applicable to the Company requires the payment of a purchase price).
Restricted Shares shall be subject to such restrictions on transferability
and other restrictions, if any, as the Committee may impose, which
restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise as the Committee
may determine. Except to the extent restricted under the terms of the
Plan and any Award Agreement relating to the Restricted Shares, a
Participant granted Restricted Shares shall have all of the rights of a
shareholder including, without limitation, the right to vote Restricted
Shares and the right to receive dividends thereon (as described below).
	 
	 	 	          (ii)     Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or contract during the applicable
restriction period, Restricted Shares that are at that time 

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	 	 	subject to
restrictions shall be forfeited and reacquired by the Company; provided,
however, that the Committee may provide, by rule or regulation or in any
Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Shares will
be waived in whole or in part in the event of terminations resulting from
specified causes.
	 
	 	 	          (iii)     Certificates for Shares. Restricted Shares granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Shares are registered in the name of
the Participant, such certificates shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Shares, the Company may retain physical possession of the
certificate, and the Participant shall have delivered a stock power to the
Company, endorsed in blank, relating to the Restricted Shares.
	 
	 	 	          (iv)     Dividends and Distributions. Dividends paid on Restricted
Shares shall be either paid at the dividend payment date in the form the
dividends are paid to other shareholders, in cash, or in unrestricted
Shares having a Fair Market Value equal to the amount of such dividends,
or the payment of such dividends shall be deferred and/or the amount or
value thereof automatically reinvested in additional Restricted Shares,
other Awards, or other investment vehicles, as the Committee shall
determine or permit the Participant to elect. Shares distributed in
connection with a Share split or Share dividend, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Shares with respect to
which such Shares or other property are distributed.

     (e)     Deferred Shares. The Committee is authorized to grant Deferred Shares
to Participants, subject to the following terms and conditions:

	 	 	          (i)     Award and Restrictions. Issuance of Shares will occur upon
expiration of the deferral period specified for an Award of Deferred
Shares by the Committee (or, if permitted by the Committee, as elected by
the Participant). In addition, Deferred Shares shall be subject to such
restrictions as the Committee may impose, if any, which restrictions may
lapse at the expiration of the deferral period or at earlier specified
times, separately or in combination, under such circumstances, in such
installments, or otherwise as the Committee may determine.
	 
	 	 	          (ii)     Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment during the applicable deferral period or
portion thereof to which forfeiture conditions apply (as provided in the
Award Agreement evidencing the Deferred Shares), all Deferred Shares that
are at that time subject to such risk of forfeiture shall be forfeited;
provided, however, that the Committee may provide, by rule or regulation
or in any Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Deferred Shares will be
waived in whole or in part in the event of terminations resulting from
specified causes.
	 
	 	 	          (iii)    Dividend Equivalents. The Committee may provide that payments
in the form of dividend equivalents will be credited in respect of
Deferred Shares, which amounts may be paid or distributed when accrued or
deemed reinvested in additional Deferred Shares.

     (f)     Bonus Shares and Awards in Lieu of Cash Obligations. The Committee is
authorized to grant Shares as a bonus, or to grant Shares or other Awards in
lieu of Company obligations to pay cash under other plans or compensatory
arrangements; provided, however, that, in the case of Participants subject to
Section 16 of the Exchange Act, the amount of such Shares or Awards shall be
determined by the Committee in a manner conforming to then-applicable
requirements of Rule 16b-3. Shares or Awards granted hereunder shall be
subject to such other terms as shall be determined by the Committee.

     (g)     Other Stock-Based Awards. The Committee shall have the right to grant
other Awards based upon the Shares having such terms and conditions as the
Committee may determine, including the grant of shares based upon certain
conditions, the grant of securities convertible into Shares and the grant of
phantom shares.

     7.       Certain Provisions Applicable to Awards.

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     (a)     Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution for, any
other Award granted under the Plan or any award granted under any other plan of
the Company, any subsidiary, or any business entity to be acquired by the
Company or a subsidiary, or any other right of a Participant to receive payment
from the Company or any subsidiary. Awards granted in addition to or in tandem
with other Awards or awards may be granted either as of the same time as or a
different time from the grant of such other Awards or awards. The per Share
exercise price of any Option, grant price of any SAR, or purchase price of any
other Award conferring a right to purchase Shares granted in substitution for
an outstanding Award or award may be adjusted to reflect the in-the-money value
of the surrendered Award or award.

     (b)     Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee.

     (c)     Form of Payment Under Awards. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company or a
subsidiary upon the grant or exercise of an Award may be made in such forms as
the Committee shall determine, including, without limitation, cash, Shares,
other Awards, or other property, and may be made in a single payment or
transfer, in installments, or on a deferred basis. Such payments may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
dividend equivalents in respect of installment or deferred payments denominated
in Shares.

     (d)     Rule 16b-3 Compliance. It is the intent of the Company that this Plan
comply in all respects with applicable provisions of Rule 16b-3 in connection
with any grant of Awards to or other transaction by a Participant who is
subject to Section 16 of the Exchange Act (except for transactions exempted
under alternative Exchange Act Rules or acknowledged in writing to be
non-exempt by such Participant). Accordingly, if, at such time, any provision
of this Plan or any Award Agreement relating to an Award does not comply with
the requirements of Rule 16b-3 as then applicable to any such transaction, such
provision will be construed or deemed amended to the extent necessary to
conform to the applicable requirements of Rule 16b-3 so that such Participant
shall avoid liability under Section 16(b).

     (e)     Loan Provisions. With the consent of the Committee, and subject at
all times to, and only to the extent, if any, permitted under and in accordance
with, laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee, or arrange for a
loan or loans to a Participant with respect to the exercise of any Option or
other payment in connection with any Award, including the payment by a
Participant of any or all federal, state, or local income or other taxes due in
connection with any Award. Subject to such limitations, the committee shall
have full authority to decide whether to make a loan or loans hereunder and to
determine the amount, terms, and provisions of any such loan or loans,
including the interest rate to be charged in respect of any such loan or loans,
whether the loan or loans are to be with or without recourse against the
borrower, the terms on which the loan is to be repaid and conditions, if any,
under which the loan or loans may be forgiven. Notwithstanding any other
provision of the Plan, the Company shall not be required to take or permit any
action under the Plan or any agreement under Section 6 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.

     8.       Change in Control Provisions.

     (a)     In the event of a “Change in Control,” as defined in this Section:

	 	 	          (i)     The Committee as constituted immediately before the Change in
Control may make such adjustments as it, in its discretion, determines are
necessary or appropriate in light of the Change in Control (including,
without limitation, the substitution of stock other than stock of the
Company as the stock optioned hereunder, cash payment or other equitable
consideration and the acceleration of vesting or exercisability of Awards
under the Plan), provided the Committee determines that such adjustments
do not have a substantial adverse economic impact on the Participants as
determined at the time of the adjustments.

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	 	 	          (ii)     (A) Any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and
vested, subject only to the restrictions set forth in Sections 7(d) and
9(a); and (B) the restrictions, deferral of settlement, and forfeiture
conditions applicable to any other Award granted under the Plan shall
lapse and such Award shall be deemed fully vested, and any performance
conditions imposed with respect to any Award shall be deemed to be fully
achieved, subject to the restrictions set forth in Sections 7(d) and 9(a).

     (b)     For purposes of the Plan, a “Change in Control” shall have occurred
if:

	 	 	          (i)       Any “Person,” as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, any entity controlling,
controlled by or under common control with the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of shares of the Company), is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 25% or more of either the
combined voting power of the Company’s then outstanding voting securities
or the then outstanding Shares (in either case, other than as a result of
an acquisition of securities directly from the Company);
	 
	 	 	          (ii)      during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(i), (iii), or (iv) of this Section 8(b)) whose election by the Board or
nomination for election by the Company’s shareholders was approved by a
vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason
to constitute at least a majority of the Board;
	 
	 	 	          (iii)     the shareholders of the Company approve a merger,
consolidation, recapitalization, or reorganization of the Company, or a
reverse share split of any class of voting securities of the Company, or
the consummation of any such transaction if shareholder approval is not
obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
Company or the surviving entity outstanding immediately after such
transaction being beneficially owned by persons who together beneficially
owned at least 75% of the combined voting power of the voting securities
of the Company outstanding immediately prior to such transaction, with the
relative voting power of each such continuing holder compared to the
voting power of each such continuing holder not substantially altered as a
result of the transaction; provided that, for purposes of this paragraph
(iii), such continuity of ownership (and preservation of relative voting
power) shall be deemed to be satisfied if the failure to meet such 75%
threshold (or to substantially preserve such relative voting power) is due
solely to the acquisition of voting securities by an employee benefit plan
of the Company or such surviving entity or of any subsidiary of the
Company or such surviving entity; or
	 
	 	 	          (iv)     the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s
assets (or any transaction having a similar effect).

     9.       General Provisions.

     (a)     Compliance With Laws and Obligations. The Company will not be
obligated to issue or deliver Shares in connection with any Award or take any
other action under the Plan in a transaction subject to the registration
requirements of the Securities Act of 1933, as amended, or any other federal or
state securities law, any requirement under any listing agreement between the
Company and any stock exchange or automated quotation system, or any other law,
regulation, or contractual obligation of the Company, until the Company is
satisfied that such laws, regulations, and other obligations of the
Company have been complied with in full. Certificates representing Shares
issued under the Plan will be subject to such stop-transfer orders and other
restrictions as may be applicable under such laws, regulations, and other
obligations of the Company, including

8

 

any requirement that a legend or legends
be placed thereon.

     (b)     Limitations on Transferability. Awards and other rights under the
Plan will not be transferable by a Participant except by will or the laws of
descent and distribution (or to a designated Beneficiary in the event of the
Participant’s death), and, if exercisable, shall be exercisable during the
lifetime of a Participant only by such Participant or his or her guardian or
legal representative; provided, however, that such Awards and other rights may
be transferred to one or more transferees during the lifetime of the
Participant in connection with the Participant’s estate or tax planning, and
such transferees may exercise rights thereunder in accordance with the terms
thereof, but only if and to the extent consistent with the registration of the
offer and sale of Shares on Form S-8, Form S-3, or such other registration form
of the Securities and Exchange Commission as may then be filed and effective
with respect to the Plan and permitted by the Committee. The Company may rely
upon the beneficiary designation last filed in accordance with this Section
9(b). Awards and other rights under the Plan may not be pledged, mortgaged,
hypothecated, or otherwise encumbered by a Participant and shall not be subject
to the claims of a Participant’s creditors.

     (c)     Taxes. The Company and any subsidiary is authorized to withhold from
any Award granted or to be settled, any delivery of Shares in connection with
an Award, any other payment relating to an Award, or any payroll or other
payment to a Participant amounts of withholding and other taxes due or
potentially payable in connection with any income recognition event involving
an Award (including, for example, an election under section 83(b) of the Code),
and to take such other action as the Committee may deem advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of a Participant’s tax
obligations.

     (d)     No Right to Continued Employment; Leaves of Absence. Neither the
Plan, any Award Agreement, or any action taken hereunder shall be construed as
giving any Participant the right to be retained in the employ or contract of
the Company or any of its subsidiaries, nor shall it interfere in any way with
the right of the Company or any of its subsidiaries to terminate any
Participant’s employment or contract at any time. Unless otherwise specified
in the applicable Award Agreement, an approved leave of absence shall not be
considered a termination of employment for purposes of an Award under the Plan.

     (e)     No Rights to Awards; No Shareholder Rights. No Participant or
employee or independent contractor shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment of
Participants, employees or independent contractors. No Award shall confer on
any Participant any of the rights of a shareholder of the Company unless and
until Shares are duly issued or transferred and delivered to the Participant in
accordance with the terms of the Award or, in the case of an Option, the Option
is duly exercised.

     (f)     Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of shareholders or Participants, except that
any amendment or alteration will be subject to the approval of the Company’s
shareholders at or before the next annual meeting of shareholders for which the
record date is after the date of such Board action if such shareholder approval
is required by any applicable federal or state law or regulation or the rules
of any stock exchange or automated quotation system on which Company securities
may then be listed or quoted, and the Board may otherwise determine to submit
other such amendments or alterations to shareholders for approval; provided,
however, that, without the consent of an affected Participant, no such action
may materially impair the rights of such Participant with respect to any Award
theretofore granted to him. The Committee may waive any conditions or rights
under, or amend, alter, suspend, discontinue, or terminate, any Award
theretofore granted and any Award Agreement relating thereto; provided,
however, that, without the consent of an affected Participant, no such action
may materially impair the rights of such Participant under such Award.

     (g)     No Fiduciary Relationship. Nothing contained in the Plan 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

9

 

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.

     (h)     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 9(h).

     (i)     Unfunded Status of Awards; Creation of Trusts. The Plan is intended
to constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company’s obligations under the Plan to
deliver cash, Shares, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the “unfunded”
status of the Plan unless the Committee otherwise determines with the consent
of each affected Participant.

     (j)     Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt
such other compensatory arrangements as it may deem desirable, including the
granting of awards otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.

     (k)     No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu
of such fractional Shares or whether such fractional Shares or any rights
thereto shall be forfeited or otherwise eliminated.

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

     (m)     Governing Law. The validity, construction, and effect of the Plan,
any rules and regulations under the Plan, and any Award Agreement will be
determined in accordance with the Delaware Limited Liability Company Act and
other laws (including those governing contracts) of the State of Delaware,
without giving effect to principles of conflicts of laws, and applicable
federal law.

     10.     Shareholder Approval, Effective Date, and Plan Termination. The Plan
will be effective upon July 1, 2004, subject to its approval by the
shareholders of the Company. Unless earlier terminated by action of the Board,
the Plan will remain in effect until such time as no Shares remain available
for issuance under the Plan and the Company and Participants have no further
rights or obligations under the Plan.

As adopted by the Board of Directors:                    April 9, 2004

10exv10w3

 

MUNICIPAL MORTGAGE AND EQUITY, L.L.C.

2004 SHARE INCENTIVE PLAN

Form of Deferred Share Agreement

     Agreement
dated as of ________________ by and between MUNICIPAL MORTGAGE AND
EQUITY, L.L.C., a Delaware limited liability company (the “Company”), and
_______________ (the “Grantee”).

     1.     Grant of Deferred Shares. The Company hereby confirms the grant, under
and pursuant to the Company’s 2004 Share Incentive Plan, as amended (the
“Plan”), to the Grantee, effective on the date set forth above (the “Date of
Grant”), of the deferred shares of the Company’s Common Shares (the “Shares”)
described herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company hereby agrees to
grant to the Grantee
________________ deferred Shares (the “Deferred Shares”), and the
Grantee hereby agrees to accept such Deferred Shares, subject to the terms and
conditions of the Plan and the terms and conditions hereinafter set forth.

     2.     Incorporation of Plan by Reference. The Deferred Shares granted hereby
have been granted to the Grantee under the Plan, a copy of which is attached
hereto as Attachment A. The Grantee hereby acknowledges receipt of the
attached copy of the Plan and agrees to be bound by all the terms and
provisions thereof (as presently in effect or hereafter amended). All of the
terms, conditions, and other provisions of the Plan are hereby incorporated by
reference into this Deferred Share Agreement (this “Agreement”). Capitalized
terms used in this Agreement but not defined herein shall have the same
meanings as in the Plan. If there is any conflict between the provisions of
this Agreement and the provisions of the Plan, the provisions of the Plan shall
govern.

     3.     Vesting of Deferred Shares.

	 	(a)	 	Subject to forfeiture as provided herein or in the Plan, the
rights of the Grantee with respect to the Deferred Shares will become
vested and nonforfeitable cumulatively as follows:

	 	 	 	to the extent of
____________
of such Deferred Shares vest on ____________ (the
“Vesting Date”),
___________ on
________ and
_________ on
_________ for so
long as the Grantee remains in the continuous employ of the Company
or a subsidiary.

	 	(b)	 	Accelerations of Vesting On a Discretionary Basis and Upon a
Change in Control.

	 	(i)	 	The provisions of Section 3(a) hereof notwithstanding, the
Committee may, in its sole discretion, at any time, upon written
notice to the Grantee, accelerate the vesting of all or a specified
portion of the Deferred Shares, as provided in Section 3(b) of the
Plan; and
	 
	 	(ii)	 	In the event of a Change in Control of the Company at a
time that the Grantee is employed by the Company or any of its
subsidiaries, all Deferred Shares granted hereby shall become
immediately and fully vested and nonforfeitable upon the occurrence
of such Change in Control, as provided in Section 8(a)(ii) of the
Plan.

 

 

     4.     Forfeiture of Deferred Shares. Except in accordance with Section 3(b),
all Deferred Shares which have not vested and become nonforfeitable shall be
forfeited on the date that the Grantee ceases to be in the employ of the
Company or any of its subsidiaries.

     5.     Delivery of Deferred Shares. Upon the vesting of the Deferred Shares
in accordance with Section 3 hereof, the Company will, subject to Section 10
hereof, deliver a certificate or certificates representing the Shares, with any
appropriate legend(s) affixed thereto, to the Grantee or such other person as
may be entitled thereto within an administratively reasonable time, at the
principal office of the Company or such other place as may be mutually agreed
upon by the Company and the Grantee or such other person. The Company agrees
to pay all original issue or stock transfer taxes, if any, on the vesting of
the Deferred Shares and all other fees and expenses necessarily incurred by the
Company in connection therewith (for this purpose expenses of the Grantee,
including withholding and other tax obligations, shall not be deemed Company
expenses).

     6.     Rights to Receive Distributions; Voting Rights.

	 	(a)	 	A Grantee shall receive distributions only with respect to the
portion of the Deferred Shares that have vested and become nonforfeitable
in accordance with this Agreement.
	 
	 	(b)	 	A Grantee shall have the right to vote only with respect to the
portion of the Deferred Shares that have vested and become nonforfeitable
in accordance with this Agreement.

     7.     Compliance with Law. The Company will make reasonable efforts to
comply with all applicable securities laws; provided, however, that
notwithstanding any other provision of this agreement, the Deferred Shares will
not be transferred to the Grantee if such transfer would result in a violation
of any such law.

     8.     Right to Terminate Employment and Adjust Compensation. No provision of
this Agreement will limit in any way whatsoever any right that the Company may
otherwise have to terminate the employment or adjust the compensation of the
Grantee at any time.

     9.     Relation to Other Benefits. Any economic or other benefit to the
Grantee under this Agreement will not be taken into account in determining any
benefits to which the Grantee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Company and
will not affect the amount of any life insurance coverage available to any
beneficiary under any life insurance plan covering persons in the employ of the
Company.

     10.     Tax Withholding. If the Company is required to withhold any tax in
connection with any transfer or vesting of the Deferred Shares or any election
by the Grantee with respect to such Deferred Shares, the Grantee must pay the
tax or make provisions that are satisfactory to the Company for the payment
thereof. The Company may defer any transfer of a sufficient number of Deferred
Shares to satisfy the Grantee’s federal, state, and local tax obligations
relating to the vesting of the Deferred Shares (and the Company’s withholding
obligations), to the extent, if any, permitted under rules and regulations
adopted by the Committee and in effect at the time of the vesting of the
Deferred Shares. In such case, the Deferred Shares withheld will be valued at
such Shares’ Fair Market Value.

     11.     Nontransferability Beneficiaries. No right or interest of the Grantee
in the Deferred Shares prior to their vesting pursuant to Section 3 shall be
pledged, encumbered, or hypothecated to or in favor of any third party or shall
be subject to any lien, obligation, or liability of the Grantee to any third
party. The unvested Deferred Shares shall not be transferable to any third
party by the Grantee.

     12.     Investment Representation; Legends. Unless, at the time of the
issuance and delivery of Deferred Shares hereunder to the Grantee, the offering
of the Deferred Shares is registered under a then-effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”),
and

2

 

the offering complies with all applicable registration requirements under
state securities laws, the Grantee shall provide to the Company, as a condition
to the delivery of any certificates representing Deferred Shares, appropriate
evidence, satisfactory in form and substance to the Company, that the Grantee
is acquiring the Deferred Shares for investment and not with a view to the
distribution of the shares or any interest in the Deferred Shares, and a
representation to the effect that the Grantee shall make no sale or other
disposition of the Deferred Shares unless (i) the Company shall have received
an opinion of counsel satisfactory to it in form and substance that such sale
or other disposition may be made without registration under the then-applicable
provisions of the Securities Act, the related rules and regulations of the SEC
and applicable state securities laws and regulations, or (ii) the sale or other
disposition of the Deferred Shares shall be registered under a then-effective
registration statement under the Securities Act and complies with all
applicable registration requirements under state securities laws. The
certificates representing the Deferred Shares may bear an appropriate legend
giving notice of the foregoing restriction on transfer of the Deferred Shares
and any other restrictive legend deemed necessary or appropriate by the
Company.

     13.     Miscellaneous. (a) This Agreement shall be binding upon the heirs,
executors, administrators, and successors of the parties. In particular, the
Grantee’s heirs, executors, administrators, and successors shall be subject to
the terms and conditions of the Plan and this Agreement, and the Company may
require any such person to execute an agreement or other documents
acknowledging and agreeing to such terms and conditions as a condition
precedent to any transfer of the Deferred Shares into the name of any such
person.

     [(b)] [Notwithstanding any other provision hereof, the shares shall also
fully vest if and as provided in the Employment Agreement between the Grantee
and the Company as amended from time to time, if and to the extent the
Employment Agreement is in effect at the relevant time, and nothing herein
shall limit any of the Grantee’s rights under the Employment Agreement. This
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral,
with respect thereto, other than the Employment Agreement.]

     [(b)][(c)] This Agreement may be amended, but no amendment, alteration,
suspension, discontinuation, or termination of this Agreement which may impose
any additional obligation upon the Company or impair the rights of the Grantee
with respect to the Deferred Shares shall be valid unless in each instance such
amendment, alternation, suspension, discontinuation, or termination is
expressed in a written instrument duly executed in the name and on behalf of
the Company and by the Grantee; provided, however, that, notwithstanding any
other provision of the Plan or this Agreement to the contrary, the Company may,
in its sole discretion, amend or terminate this Agreement, to the extent
necessary to cause the provisions hereof to meet the requirements of Section
409A of the Code.

	 	 	 	 	 
	 	MUNICIPAL MORTGAGE AND EQUITY, L.L.C.

 	 
	 	By:  	
 	 
	 	 	Michael L. Falcone 	 
	 	 	President & Chief Operating Officer 	 
	 

	 	 	 
	 

	 	Grantee:
	

	 	 
	

	 	 
	

	 	 
	

	 	 
	

	 	 
	

	 	 

3

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