EX-99.(I) EQUITY INCENTIVE PLAN
Published on February 13, 2007
Exhibit
(i)
TRIANGLE CAPITAL CORPORATION
2007 EQUITY INCENTIVE PLAN
TABLE OF CONTENTS
Tab | ||||||||
Section 1. |
Purpose |
1 | ||||||
Section 2. |
Definitions |
1 | ||||||
Section 3. |
Administration |
4 | ||||||
Section 4. |
Shares Available For Awards |
5 | ||||||
Section 5. |
Eligibility |
6 | ||||||
Section 6. |
Stock Options And Stock Appreciation Rights |
6 | ||||||
Section 7. |
Restricted Shares And Restricted Share Units |
8 | ||||||
Section 8. |
Performance Awards |
10 | ||||||
Section 9. |
Other Stock-Based Awards |
10 | ||||||
Section 10. |
Non-Employee Director Awards |
10 | ||||||
Section 11. |
Provisions Applicable To Covered Officers And Performance Awards |
11 | ||||||
Section 12. |
Termination Of Employment |
12 | ||||||
Section 13. |
Change In Control |
12 | ||||||
Section 14. |
Amendment And Termination |
12 | ||||||
Section 15. |
General Provisions |
13 | ||||||
Section 16. |
Term Of The Plan |
15 |
TRIANGLE CAPITAL CORPORATION
2007 EQUITY INCENTIVE PLAN
2007 EQUITY INCENTIVE PLAN
Section 1. Purpose.
This plan shall be known as the Triangle Capital Corporation 2007 Equity Incentive Plan (the
Plan). The purpose of the Plan is to promote the interests of Triangle Capital Corporation, a
Maryland corporation (the Company), its Subsidiaries and its stockholders by (i) attracting and
retaining key officers, employees, and directors of, and consultants to, the Company and its
Subsidiaries and Affiliates; (ii) motivating such individuals by means of performance-related
incentives to achieve long-range performance goals; (iii) enabling such individuals to participate
in the long-term growth and financial success of the Company; (iv) encouraging ownership of stock
in the Company by such individuals; and (v) linking their compensation to the long-term interests
of the Company and its stockholders. With respect to any awards granted under the Plan that are
intended to comply with the requirements of performance-based compensation under Section 162(m)
of the Code, the Plan shall be interpreted in a manner consistent with such requirements.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
(a) 1940 Act means the Investment Company Act of 1940, as amended.
(b) Affiliate shall mean (i) any entity that, directly or indirectly, is
controlled by the Company, (ii) any entity in which the Company has a significant equity interest,
(iii) an affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the
Exchange Act, and (iv) any entity in which the Company has at least twenty percent (20%) of the
combined voting power of the entitys outstanding voting securities, in each case as designated by
the Board as being a participating employer in the Plan.
(c) Award shall mean any Option, Stock Appreciation Right, Restricted Share Award,
Restricted Share Unit, Performance Award, Other Stock-Based Award or other award granted under the
Plan, whether singly, in combination or in tandem, to a Participant by the Committee (or the Board)
pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee (or
the Board) may establish or which are required by applicable legal requirements.
(d) Award Agreement shall mean any written agreement, contract or other instrument
or document evidencing any Award, which may, but need not, be executed or acknowledged by a
Participant.
(e) Board shall mean the Board of Directors of the Company.
(f) Cause shall mean, unless otherwise defined in the applicable Award Agreement,
(i) the engaging by the Participant in willful misconduct that is injurious to the Company or its
Subsidiaries or Affiliates, or (ii) the embezzlement or misappropriation of funds or property of
the Company or its Subsidiaries or Affiliates by the Participant. For purposes of this paragraph,
no act, or failure to act, on the Participants part shall be considered willful unless done, or
omitted to be done, by the Participant not in good faith and without reasonable belief that the
Participants action or omission was in the best interest of the Company. Any determination of
Cause for purposes of the Plan or any Award shall be
made by the Committee in its sole discretion. Any such determination shall be final and
binding on a Participant.
(g) Change in Control shall mean, unless otherwise defined in the applicable Award
Agreement, any of the following events:
(i) any person or entity, including a group as defined in Section 13(d)(3)
of the Exchange Act, other than the Company or a wholly-owned subsidiary thereof or any
employee benefit plan of the Company or any of its Subsidiaries, becomes the beneficial
owner of the Companys securities having 35% or more of the combined voting power of the
then outstanding securities of the Company that may be cast for the election of directors of
the Company (other than as a result of an issuance of securities initiated by the Company in
the ordinary course of business);
(ii) as the result of, or in connection with, any cash tender or exchange
offer, merger or other business combination or contested election, or any combination of the
foregoing transactions, less than a majority of the combined voting power of the then
outstanding securities of the Company or any successor company or entity entitled to vote
generally in the election of the directors of the Company or such other corporation or
entity after such transaction are held in the aggregate by the holders of the Companys
securities entitled to vote generally in the election of directors of the Company
immediately prior to such transaction;
(iii) during any period of two (2) consecutive years, individuals who at the
beginning of any such period constitute the Board cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination for election by the
Companys shareholders, of each Director of the Company first elected during such period was
approved by a vote of at least two-thirds (2/3rds) of the Directors of the Company then
still in office who were (i) Directors of the Company at the beginning of any such period,
and (ii) not initially (a) appointed or elected to office as result of either an actual or
threatened election and/or proxy contest by or on behalf of a Person other than the Board,
or (b) designated by a Person who has entered into an agreement with the Company to effect a
transaction described in (i) or (ii) above or (iv) or (v) below;
(iv) a complete liquidation or dissolution of the Company; or
(v) the sale or other disposition of all or substantially all of the assets
of the Company to any Person (other than a transfer to a Subsidiary).
(h) Code shall mean the Internal Revenue Code of 1986, as amended from time to
time.
(i) Committee shall mean the Board, and following an initial public offering by
the Company, shall mean a committee of the Board composed of not less than two Non-Employee
Directors, at least two of whom shall be (i) a non-employee director for purposes of Exchange Act
Section 16 and Rule 16b-3 thereunder, (ii) an outside director for purposes of Section 162(m) and
the regulations promulgated under the Code, and each of whom shall be, subject to any applicable
transitional rules for newly public issuers, independent within the meaning of the listing
standards of the Nasdaq stock market. To the extent that compensation realized in respect of
Awards is intended to be performance based under Section 162(m) of the Code and the Committee is
not comprised solely of individuals who are outside directors within the meaning of Section
162(m) of the Code, the Committee may from time to time delegate some or all of its functions under
the Plan to a committee or subcommittee composed of members that meet the relevant requirements.
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(j) Consultant shall mean any consultant to the Company or its Subsidiaries or
Affiliates.
(k) Covered Officer shall mean at any date (i) any individual who, with respect to
the previous taxable year of the Company, was a covered employee of the Company within the
meaning of Section 162(m); provided, however, that the term Covered Officer shall not include any
such individual who is designated by the Committee, in its discretion, at the time of any Award or
at any subsequent time, as reasonably expected not to be such a covered employee with respect to
the current taxable year of the Company and (ii) any individual who is designated by the Committee,
in its discretion, at the time of any Award or at any subsequent time, as reasonably expected to be
such a covered employee with respect to the current taxable year of the Company or with respect
to the taxable year of the Company in which any applicable Award will be paid or vested.
(l) Director shall mean a member of the Board.
(m) Disability shall mean, unless otherwise defined in the applicable Award
Agreement, a disability that would qualify as a total and permanent disability under the Companys
then current long-term disability plan.
(n) Employee shall mean a current or prospective officer or employee of the
Company or of any Subsidiary or Affiliate.
(o) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from
time to time.
(p) Fair Market Value with respect to the Shares, shall mean, for purposes of a
grant of an Award as of any date, (i) the closing sales price of the Shares on the Nasdaq stock
market, or any other such exchange on which the shares are traded, on such date, or in the absence
of reported sales on such date, the closing sales price on the immediately preceding date on which
sales were reported or (ii) in the event there is no public market for the Shares on such date, the
fair market value as determined, in good faith, by the Board or Committee in its sole discretion
(which, for purposes of Section 6.2, will in no event will be less than the net asset value of such
Shares on such date, as determined in accordance with the 1940 Act and the rules thereunder), and
for purposes of a sale of a Share as of any date, the actual sales price on that date.
(q) Incentive Stock Option shall mean an option to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.
(r) Non-Qualified Stock Option shall mean an option to purchase Shares from the
Company that is granted under Sections 6 or 10 of the Plan and is not intended to
be an Incentive Stock Option.
(s) Non-Employee Director shall mean a member of the Board who is not an officer
or employee of the Company or any Subsidiary or Affiliate.
(t) Option shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
(u) Option Price shall mean the purchase price payable to purchase one Share upon
the exercise of an Option.
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(v) Other Stock-Based Award shall mean any Award granted under Sections 9
or 10 of the Plan.
(w) Participant shall mean any Employee, Director, Consultant or other person who
receives an Award under the Plan.
(x) Performance Award shall mean any Award granted under Section 8 of the
Plan.
(y) Person shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
(z) Restricted Share shall mean any Share granted under Sections 7 or
10 of the Plan.
(aa) Restricted Share Unit shall mean any unit granted under Sections 7 or
10 of the Plan.
(bb) Retirement shall mean, unless otherwise defined in the applicable Award
Agreement, retirement of a Participant from the employ or service of the Company or any of its
Subsidiaries or Affiliates in accordance with the terms of the applicable Company retirement plan
or, if a Participant is not covered by any such plan, retirement on or after such Participants
65th birthday.
(cc) SEC shall mean the Securities and Exchange Commission or any successor
thereto.
(dd) Section 16 shall mean Section 16 of the Exchange Act and the rules
promulgated thereunder and any successor provision thereto as in effect from time to time.
(ee) Section 162(m) shall mean Section 162(m) of the Code and the regulations
promulgated thereunder and any successor provision thereto as in effect from time to time.
(ff) Shares shall mean shares of the common stock, $0.01 par value, of the
Company.
(gg) Stock Appreciation Right or SAR shall mean a stock appreciation right
granted under Sections 6 or 10 of the Plan that entitles the holder to receive,
with respect to each Share encompassed by the exercise of such SAR, the amount determined by the
Committee and specified in an Award Agreement. In the absence of such a determination, the holder
shall be entitled to receive, with respect to each Share 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.
(hh) Subsidiary shall mean any Person (other than the Company) of which a majority
of its voting power or its equity securities or equity interest is owned directly or indirectly by
the Company.
(ii) Substitute Awards shall mean Awards granted solely in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by the Company or
with which the Company combines.
Section 3. Administration.
3.1 Authority of Committee. The Plan shall be administered by the Committee, which shall be
appointed by and serve at the pleasure of the Board; provided, however, with respect to Awards to
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Non-Employee Directors, all references in the Plan to the Committee shall be deemed to be
references to the Board. Subject to the terms of the Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Committee by the Plan, the Committee shall
have full power and authority in its discretion to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to a Participant; (iii) determine the number of Shares to be
covered by, or with respect to which payments, rights or other matters are to be calculated in
connection with Awards; (iv) determine the timing, terms, and conditions of any Award; (v)
accelerate the time at which all or any part of an Award may be settled or exercised; (vi)
determine whether, to what extent, and under what circumstances, Awards may be settled or exercised
in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or
suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited
or suspended; (vii) determine whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the holder thereof or of the
Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or
Award made under, the Plan; (ix) except to the extent prohibited by Section 6.2, amend or
modify the terms of any Award at or after grant with the consent of the holder of the Award; (x)
establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (xi) make any other determination
and take any other action that the Committee deems necessary or desirable for the administration of
the Plan, subject to the exclusive authority of the Board under Section 14 hereunder to
amend or terminate the Plan. The exercise of an Option or receipt of an Award shall be effective
only if an Award Agreement shall have been duly executed and delivered on behalf of the Company
following the grant of the Option or other Award.
3.2 Committee Discretion Binding. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and
shall be final, conclusive, and binding upon all Persons, including the Company, any Subsidiary or
Affiliate, any Participant and any holder or beneficiary of any Award.
3.3 Delegation. Subject to the terms of the Plan, the Committees charter and applicable law,
the Committee may delegate to one or more officers or managers of the Company or of any Subsidiary
or Affiliate, or to a Committee of such officers or managers, the authority, subject to such terms
and limitations as the Committee shall determine, to grant Awards to or to cancel, modify or waive
rights with respect to, or to alter, discontinue, suspend or terminate Awards held by Participants
who are not officers or directors of the Company for purposes of Section 16 or who are otherwise
not subject to such Section.
Section 4. Shares Available For Awards.
4.1 Shares Available. Subject to the provisions of Section 4.2 hereof, the stock to
be subject to Awards under the Plan shall be the Shares of the Company and the maximum number of
Shares with respect to which Awards may be granted under the Plan shall be 900,000. If, after the
effective date of the Plan, any Shares covered by an Award granted under this Plan, or to which
such an Award relates, are forfeited, or if such an Award is settled for cash or otherwise
terminates, expires unexercised or is canceled or settled without the delivery of Shares or with
the delivery of a reduced number of Shares, then the Shares covered by such Award, or to which such
Award relates, or the number of Shares otherwise counted against the aggregate number of Shares
with respect to which Awards may be granted, to the extent of any such settlement, reduction,
forfeiture, termination, expiration or cancellation, shall again become Shares with respect to
which Awards may be granted. In the event that any Option or other Award granted hereunder is
exercised through the delivery of Shares or in the event that withholding tax liabilities arising
from such Award are satisfied by the withholding of Shares by the Company, the number of Shares
available for Awards under the Plan shall be increased by the number of Shares so surrendered or
withheld.
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Notwithstanding the foregoing and subject to adjustment as provided in Section 4.2 hereof,
no Participant may receive Options or SARs under the Plan in any calendar year that, taken
together, relate to more than 100,000 Shares.
4.2 Adjustments. In the event that any dividend or other distribution (whether in the form of
cash, Shares, other securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or
exchange of Shares or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company, or other similar corporate transaction or event
affects the Shares, then the Committee shall in an equitable and proportionate manner (and, as
applicable, in such manner as is consistent with Sections 422 and 409A of the Code and the
regulations thereunder and with Section 162(m)) either: (i) adjust any or all of (1) the aggregate
number of Shares or other securities of the Company (or number and kind of other securities or
property) with respect to which Awards may be granted under the Plan; (2) the number of Shares or
other securities of the Company (or number and kind of other securities or property) subject to
outstanding Awards under the Plan, provided that the number of shares subject to any Award shall
always be a whole number; (3) the grant or exercise price with respect to any Award under the Plan;
and (4) the limits on the number of Shares that may be granted to Participants under the Plan in
any calendar year; (ii) provide for an equivalent award in respect of securities of the surviving
entity of any merger, consolidation or other transaction or event having a similar effect; or (iii)
make provision for a cash payment to the holder of an outstanding Award.
4.3 Substitute Awards. Any Shares issued by the Company as Substitute Awards in connection
with the assumption or substitution of outstanding grants from any acquired corporation shall not
reduce the Shares available for Awards under the Plan.
4.4 Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares or of issued Shares which have been
reacquired by the Company.
4.5 No Grants in Contravention of 1940 Act. No Award may be granted under the Plan if the
grant of such Award would cause the Company to violate Section 61(a)(3) of the Act, and, if
otherwise approved for grant, shall be void and of no effect.
Section 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be designated a Participant;
provided, however, that Non-Employee Directors shall only be eligible to receive Awards granted
consistent with Section 10.
Section 6. Stock Options And Stock Appreciation Rights.
6.1 Grant. Subject to the provisions of the Plan including, without limitation, Section
3.3 above and other applicable legal requirements, the Committee shall have sole and complete
authority to determine the Participants to whom Options and SARs shall be granted, the number of
Shares subject to each Award, the exercise price and the conditions and limitations applicable to
the exercise of each Option and SAR. An Option may be granted with or without a related SAR. A
SAR may be granted with or without a related Option. The Committee shall have the authority to
grant Incentive Stock Options, and to grant Non-Qualified Stock Options. In the case of Incentive
Stock Options, the terms and conditions of such grants shall be subject to and comply with Section
422 of the Code, as from time to time amended, and any regulations implementing such statute. A
person who has been granted an Option or SAR under this Plan may be granted additional Options or
SARs under the Plan if the Committee shall so determine; provided,
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however, that to the extent the aggregate Fair Market Value (determined at the time the Incentive
Stock Option is granted) of the Shares with respect to which all Incentive Stock Options are
exercisable for the first time by an Employee during any calendar year (under all plans described
in of Section 422(d) of the Code of the Employees employer corporation and its parent and
Subsidiaries) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options.
6.2 Price. The Committee in its sole discretion shall establish the Option Price at the time
each Option is granted. Except in the case of Substitute Awards, the Option Price of an Option may
not be less than one hundred percent (100%) of the Fair Market Value of the Shares with respect to
which the Option is granted on the date of grant of such Option. Notwithstanding the foregoing and
except as permitted by the provisions of Section 4.2 and Section 14 hereof, the
Committee shall not have the power to (i) amend the terms of previously granted Options to reduce
the Option Price of such Options, or (ii) cancel such Options and grant substitute Options with a
lower Option Price than the cancelled Options. Except with respect to Substitute Awards, SARs may
not be granted at a price less than the Fair Market Value of a Share on the date of grant.
6.3 Term. Subject to the Committees authority under Section 3.1 and the provisions
of Section 6.6, each Option and SAR and all rights and obligations thereunder shall expire
on the date determined by the Committee and specified in the Award Agreement. The Committee shall
be under no duty to provide terms of like duration for Options or SARs granted under the Plan.
Notwithstanding the foregoing, no Option or SAR shall be exercisable after the expiration of ten
(10) years from the date such Option or SAR was granted.
6.4 Exercise.
(a) Each Option and SAR shall be exercisable at such times and subject to such terms
and conditions as the Committee may, in its sole discretion, specify in the applicable Award
Agreement or thereafter. The Committee shall have full and complete authority to determine,
subject to Section 6.6 herein, whether an Option or SAR will be exercisable in full
at any time or from time to time during the term of the Option or SAR, or to provide for the
exercise thereof in such installments, upon the occurrence of such events and at such times
during the term of the Option or SAR as the Committee may determine.
(b) The Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of federal, state or foreign
securities laws or the Code, as it may deem necessary or advisable. The exercise of any
Option granted hereunder shall be effective only at such time as the sale of Shares pursuant
to such exercise will not violate any state or federal securities or other laws.
(c) An Option or SAR may be exercised in whole or in part at any time, with respect to
whole Shares only, within the period permitted thereunder for the exercise thereof, and
shall be exercised by written notice of intent to exercise the Option or SAR, delivered to
the Company at its principal office, and payment in full to the Company at the direction of
the Committee of the amount of the Option Price for the number of Shares with respect to
which the Option is then being exercised.
(d) Payment of the Option Price shall be made in cash or cash equivalents, or, at the
discretion of the Committee, (i) by transfer, either actually or by attestation, to the
Company of Shares that have been held by the Participant for at least six (6) months (or
such lesser period as may be permitted by the Committee), valued at the Fair Market Value of
such Shares on the date of exercise (or next succeeding trading date, if the date of
exercise is not a trading date), together with
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any applicable withholding taxes, such transfer to be upon such terms and conditions as
determined by the Committee, or (ii) by a combination of such cash (or cash equivalents) and
such Shares; provided, however, that the optionee shall not be entitled to tender Shares
pursuant to successive, substantially simultaneous exercises of an Option or any other stock
option of the Company. Subject to applicable securities laws, an Option may also be
exercised by delivering a notice of exercise of the Option and simultaneously selling the
Shares thereby acquired, pursuant to a brokerage or similar agreement approved in advance by
proper officers of the Company, using the proceeds of such sale as payment of the Option
Price, together with any applicable withholding taxes. Until the optionee has been issued
the Shares subject to such exercise, he or she shall possess no rights as a stockholder with
respect to such Shares.
(e) At the Committees discretion, the amount payable as a result of the exercise of an
SAR may be settled in cash, Shares or a combination of cash and Shares. A fractional Share
shall not be deliverable upon the exercise of a SAR but a cash payment will be made in lieu
thereof.
6.6 Ten Percent Stock Rule. Notwithstanding any other provisions in the Plan, if at the time
an Option is otherwise to be granted pursuant to the Plan, the optionee or rights holder owns
directly or indirectly (within the meaning of Section 424(d) of the Code) Shares of the Company
possessing more than ten percent (10%) of the total combined voting power of all classes of Stock
of the Company or its parent or Subsidiary or Affiliate corporations (within the meaning of Section
422(b)(6) of the Code), then any Incentive Stock Option to be granted to such optionee or rights
holder pursuant to the Plan shall satisfy the requirement of Section 422(c)(5) of the Code, and the
Option Price shall be not less than one hundred ten percent (110%) of the Fair Market Value of the
Shares of the Company, and such Option by its terms shall not be exercisable after the expiration
of five (5) years from the date such Option is granted.
Section 7. Restricted Shares And Restricted Share Units.
7.1 Grant.
(a) Subject to the provisions of the Plan and other applicable legal requirements, the
Committee shall have sole and complete authority to determine the Participants to whom
Restricted Shares and Restricted Share Units shall be granted, the number of Restricted
Shares and/or the number of Restricted Share Units to be granted to each Participant, the
duration of the period during which, and the conditions under which, the Restricted Shares
and Restricted Share Units may be forfeited to the Company, and the other terms and
conditions of such Awards. The Restricted Share and Restricted Share Unit Awards shall be
evidenced by Award Agreements in such form as the Committee shall from time to time approve,
which agreements shall comply with and be subject to the terms and conditions provided
hereunder and any additional terms and conditions established by the Committee that are
consistent with the terms of the Plan.
(b) Each Restricted Share and Restricted Share Unit Award made under the Plan shall be
for such number of Shares as shall be determined by the Committee and set forth in the Award
Agreement containing the terms of such Restricted Share or Restricted Share Unit Award.
Such agreement shall set forth a period of time during which the grantee must remain in the
continuous employment of the Company in order for the forfeiture and transfer restrictions
to lapse. If the Committee so determines, the restrictions may lapse during such restricted
period in installments with respect to specified portions of the Shares covered by the
Restricted Share or Restricted Share Unit Award. The Award Agreement may also, in the
discretion of the Committee, set forth performance or other conditions that will subject the
Shares to forfeiture and transfer restrictions. The Committee may, at its discretion, waive
all or any part of the restrictions applicable to any or all outstanding Restricted Share
and Restricted Share Unit Awards.
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7.2 Delivery of Shares and Transfer Restrictions. At the time of a Restricted Share Award, a
certificate representing the number of Shares awarded thereunder shall be registered in the name of
the grantee. Such certificate shall be held by the Company or any custodian appointed by the
Company for the account of the grantee subject to the terms and conditions of the Plan, and shall
bear such a legend setting forth the restrictions imposed thereon as the Committee, in its
discretion, may determine. The applicable Award Agreement will specify whether a grantee has the
right to receive dividends with respect to the Restricted Shares prior to the lapsing of transfer
restrictions. Unless otherwise provided in the applicable Award Agreement, the grantee shall have
all other rights of a stockholder with respect to the Restricted Shares, including the right to
vote such Shares, subject to the following restrictions: (i) the grantee shall not be entitled to
delivery of the stock certificate until the expiration of the restricted period and the fulfillment
of any other restrictive conditions set forth in the Award Agreement with respect to such Shares;
(ii) none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of during such restricted period or until after the fulfillment of any such
other restrictive conditions; and (iii) except as otherwise determined by the Committee at or after
grant, all of the Shares shall be forfeited and all rights of the grantee to such Shares shall
terminate, without further obligation on the part of the Company, unless the grantee remains in the
continuous employment of the Company for the entire restricted period in relation to which such
Shares were granted and unless any other restrictive conditions relating to the Restricted Share
Award are met. Unless otherwise provided in the applicable Award Agreement, any Shares, any other
securities of the Company and any other property (except for cash dividends) distributed with
respect to the Shares subject to Restricted Share Awards shall be subject to the same restrictions,
terms and conditions as such restricted Shares.
7.3 Termination of Restrictions. At the end of the restricted period and provided that any
other restrictive conditions of the Restricted Share Award are met, or at such earlier time as
otherwise determined by the Committee, all restrictions set forth in the Award Agreement relating
to the Restricted Share Award or in the Plan shall lapse as to the restricted Shares subject
thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and
restricted stock legend, shall be delivered to the Participant or the Participants beneficiary or
estate, as the case may be.
7.4 Payment of Restricted Share Units. Each Restricted Share Unit shall have a value equal to
the Fair Market Value of a Share. Restricted Share Units shall be paid in cash, Shares, other
securities or other property, as determined in the sole discretion of the Committee, upon the lapse
of the restrictions applicable thereto, or otherwise in accordance with the applicable Award
Agreement. The applicable Award Agreement will specify whether a Participant will be entitled to
receive dividend rights in respect of Restricted Stock Units at the time of any payment of
dividends to stockholders on Shares. If the applicable Award Agreement specifies that a
Participant will be entitled to receive dividend rights, (i) the amount of any such dividend right
shall equal the amount that would be payable to the Participant as a stockholder in respect of a
number of Shares equal to the number of Restricted Stock Units then credited to the Participant,
(ii) any such dividend right shall be paid in accordance with the Companys payment practices as
may be established from time to time and as of the date on which such dividend would have been
payable in respect of outstanding Shares, and (iii) the applicable Award Agreement will specify
whether dividend equivalents shall be paid in respect of Restricted Share Units that are not yet
vested. Except as otherwise determined by the Committee at or after grant, Restricted Share Units
may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of, and all Restricted Share Units and all rights of the grantee to such Restricted Share Units
shall terminate, without further obligation on the part of the Company, unless the grantee remains
in continuous employment of the Company for the entire restricted period in relation to which such
Restricted Share Units were granted and unless any other restrictive conditions relating to the
Restricted Share Unit Award are met.
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Section 8. Performance Awards.
8.1 Grant. The Committee shall have sole and complete authority to determine the Participants
who shall receive a Performance Award, which shall consist of a right that is (i) denominated in
cash or Shares (including but not limited to Restricted Shares and Restricted Share Units), (ii)
valued, as determined by the Committee, in accordance with the achievement of such performance
goals during such performance periods as the Committee shall establish, and (iii) payable at such
time and in such form as the Committee shall determine.
8.2 Terms and Conditions. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any Performance Award and
the amount and kind of any payment or transfer to be made pursuant to any Performance Award, and
may amend specific provisions of the Performance Award; provided, however, that such amendment may
not adversely affect existing Performance Awards made within a performance period commencing prior
to implementation of the amendment.
8.3 Payment of Performance Awards. Performance Awards may be paid in a lump sum or in
installments following the close of the performance period or, in accordance with the procedures
established by the Committee, on a deferred basis. Termination of employment prior to the end of
any performance period, other than for reasons of death or Disability, will result in the
forfeiture of the Performance Award, and no payments will be made. A Participants rights to any
Performance Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of in any manner, except by will or the laws of descent and distribution,
and/or except as the Committee may determine at or after grant.
Section 9. Other Stock-Based Awards.
The Committee shall have the authority to determine the Participants who shall receive an
Other Stock-Based Award, which shall consist of any right that is (i) not an Award described in
Sections 6 or 7 above and (ii) an Award of Shares or an Award denominated or
payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as deemed by the Committee to
be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and conditions of any such Other
Stock-Based Award.
Section 10. Non-Employee Director Awards.
10.1 The Board may provide that all or a portion of a Non-Employee Directors annual retainer,
meeting fees and/or other awards or compensation as determined by the Board, be payable (either
automatically or at the election of a Non-Employee Director) in the form of Non-Qualified Stock
Options, Restricted Shares, Restricted Share Units and/or Other Stock-Based Awards, including
unrestricted Shares; provided, however, that grants of Awards to Non-Employee Directors must be
approved by order of the SEC as provided in Section 61(a)(3)(B)(i)(II) of the 1940 Act. The Board
shall determine the terms and conditions of any such Awards, including the terms and conditions
which shall apply upon a termination of the Non-Employee Directors service as a member of the
Board, and shall have full power and authority in its discretion to administer such Awards, subject
to the terms of the Plan and applicable law.
10.2 Subject to applicable legal requirements, the Board may also grant Awards to Non-Employee
Directors pursuant to the terms of the Plan, including any Award described in Sections 6,
7 or 9 above.
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Section 11. Provisions Applicable To Covered Officers And Performance Awards.
11.1 Notwithstanding anything in the Plan to the contrary, unless the Committee determines
that a Performance Award to be granted to a Covered Officer should not qualify as
performance-based compensation for purposes of Section 162(m), Performance Awards granted to
Covered Officers shall be subject to the terms and provisions of this Section 11.
Accordingly, unless otherwise determined by the Committee, if any provision of the Plan or any
Award Agreement relating to such an Award does not comply or is inconsistent with Section 162(m),
such provision shall be construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee discretion to increase
the amount of compensation otherwise payable to a Covered Officer in connection with any such Award
upon the attainment of the performance criteria established by the Committee.
11.2 The Committee may grant Performance Awards to Covered Officers based solely upon the
attainment of performance targets related to one or more performance goals selected by the
Committee from among the goals specified below. For the purposes of this Section 11,
performance goals shall be limited to one or more of the following Company, Subsidiary, operating
unit, business segment or division financial performance measures:
(a) | earnings before interest, taxes, depreciation and/or amortization; | ||
(b) | operating income or profit; | ||
(c) | operating efficiencies; | ||
(d) | return on equity, assets, capital, capital employed or investment; | ||
(e) | net income; | ||
(f) | earnings per share; | ||
(g) | utilization; | ||
(h) | net investment income; | ||
(i) | gross profit; | ||
(j) | loan loss ratios; | ||
(k) | stock price or total stockholder return; | ||
(l) | net asset growth; | ||
(m) | debt reduction; | ||
(n) | strategic business objectives, consisting of one or more objectives based on meeting specified cost targets, business expansion goals and goals relating to acquisitions or divestitures; or | ||
(o) | any combination thereof. |
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Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise
employ comparisons based on internal targets, the past performance of the Company or any
Subsidiary, operating unit, business segment or division of the Company and/or the past or current
performance of other companies, and in the case of earnings-based measures, may use or employ
comparisons relating to capital, stockholders equity and/or Shares outstanding, or to assets or
net assets. The Committee may appropriately adjust any evaluation of performance under criteria
set forth in this Section 11.2 to exclude any of the following events that occurs during a
performance period: (i) asset write-downs, (ii) litigation or claim judgments or settlements,
(iii) the effect of changes in tax law, accounting principles or other such laws or provisions
affecting reported results, (iv) accruals for reorganization and restructuring programs and (v) any
extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or
in managements discussion and analysis of financial condition and results of operations appearing
in the Companys annual report to stockholders for the applicable year.
11.3 With respect to any Covered Officer, the maximum annual number of Shares in respect of
which all Performance Awards may be granted under Section 8 of the Plan is 100,000 and the
maximum amount of all Performance Awards that are settled in cash and that may be granted under
Section 8 of the Plan in any year is $1,000,000.
11.4 To the extent necessary to comply with Section 162(m), with respect to grants of
Performance Awards, no later than 90 days following the commencement of each performance period (or
such other time as may be required or permitted by Section 162(m) of the Code), the Committee
shall, in writing, (1) select the performance goal or goals applicable to the performance period,
(2) establish the various targets and bonus amounts which may be earned for such performance
period, and (3) specify the relationship between performance goals and targets and the amounts to
be earned by each Covered Officer for such performance period. Following the completion of each
performance period, the Committee shall certify in writing whether the applicable performance
targets have been achieved and the amounts, if any, payable to Covered Officers for such
performance period. In determining the amount earned by a Covered Officer for a given performance
period, subject to any applicable Award Agreement, the Committee shall have the right to reduce
(but not increase) the amount payable at a given level of performance to take into account
additional factors that the Committee may deem relevant in its sole discretion to the assessment of
individual or corporate performance for the performance period.
Section 12. Termination Of Employment.
The Committee shall have the full power and authority to determine the terms and conditions
that shall apply to any Award upon a termination of employment with the Company, its Subsidiaries
and Affiliates, including a termination by the Company with or without Cause, by a Participant
voluntarily, or by reason of death, Disability or Retirement, and may provide such terms and
conditions in the Award Agreement or in such rules and regulations as it may prescribe.
Section 13. Change In Control.
The Committee may specify in the applicable Award Agreement at or after grant, or otherwise by
resolution prior to a Change in Control, that all or a portion of the outstanding Awards shall
vest, become immediately exercisable or payable and have all restrictions lifted upon a Change in
Control.
Section 14. Amendment And Termination.
14.1 Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate
the Plan or any portion thereof at any time; provided that no such amendment, alteration,
suspension, discontinuation or termination shall be made without stockholder approval if such
approval is necessary to
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comply with any tax or regulatory requirement for which or with which the Board deems it necessary
or desirable to comply.
14.2 Amendments to Awards. Subject to the restrictions of Section 6.2, the Committee
may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel
or terminate, any Award theretofore granted, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely affect the rights of any Participant or any holder or beneficiary of any
Award theretofore granted shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.
14.3 Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The
Committee is hereby authorized to make equitable and proportionate adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring
events (and shall make such adjustments for events described in Section 4.2 hereof)
affecting the Company, any Subsidiary or Affiliate, or the financial statements of the Company or
any Subsidiary or Affiliate, or of changes in applicable laws, regulations or accounting
principles.
14.4 Section 409A Compliance. No Award (or modification thereof) shall provide for deferral
of compensation that does not comply with Section 409A of the Code unless the Committee, at the
time of grant, specifically provides that the Award is not intended to comply with Section 409A of
the Code. Notwithstanding any provision of this Plan to the contrary, if one or more of the
payments or benefits received or to be received by a Participant pursuant to an Award would cause
the Participant to incur any additional tax or interest under Section 409A of the Code, the
Committee may reform such provision to maintain to the maximum extent practicable the original
intent of the applicable provision without violating the provisions of Section 409A of the Code.
Section 15. General Provisions.
15.1 Limited Transferability of Awards. Except as otherwise provided in the Plan, no Award
shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Participant, except by will or the laws of descent and distribution. No transfer of an Award by
will or by laws of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an authenticated copy of the will
and/or such other evidence as the Committee may deem necessary or appropriate to establish the
validity of the transfer.
15.2 Dividend Equivalents. In the sole and complete discretion of the Committee, an Award may
provide the Participant with dividends or dividend equivalents, payable in cash, Shares, other
securities or other property on a current or deferred basis. All dividend or dividend equivalents
which are not paid currently may, at the Committees discretion, accrue interest, be reinvested
into additional Shares, or, in the case of dividends or dividend equivalents credited in connection
with Performance Awards, be credited as additional Performance Awards and paid to the Participant
if and when, and to the extent that, payment is made pursuant to such Award. The total number of
Shares available for grant under Section 4 shall not be reduced to reflect any dividends or
dividend equivalents that are reinvested into additional Shares or credited as Performance Awards.
15.3 No Rights to Awards. No Person shall have any claim to be granted any Award, and there
is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards.
The terms and conditions of Awards need not be the same with respect to each Participant.
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15.4 Share Certificates. All certificates for Shares or other securities of the Company or
any Subsidiary or Affiliate delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations and other requirements of the SEC or any state
securities commission or regulatory authority, any stock exchange or other market upon which such
Shares or other securities are then listed, and any applicable Federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
15.5 Withholding. A Participant may be required to pay to the Company or any Subsidiary or
Affiliate and the Company or any Subsidiary or Affiliate shall have the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made under any Award or
under the Plan, or from any compensation or other amount owing to a Participant the amount (in
cash, Shares, other securities, other Awards or other property) of any applicable withholding or
other tax-related obligations in respect of an Award, its exercise or any other transaction
involving an Award, or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. The Committee may provide for additional cash payments to holders of
Options to defray or offset any tax arising from the grant, vesting, exercise or payment of any
Award.
15.6 Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement that
shall be delivered to the Participant and may specify the terms and conditions of the Award and any
rules applicable thereto. In the event of a conflict between the terms of the Plan and any Award
Agreement, the terms of the Plan shall prevail. The Committee shall, subject to applicable law,
determine the date an Award is deemed to be granted. The Committee or, except to the extent
prohibited under applicable law, its delegate(s) may establish the terms of agreements or other
documents evidencing Awards under this Plan and may, but need not, require as a condition to any
such agreements or documents effectiveness that such agreement or document be executed by the
Participant, including by electronic signature or other electronic indication of acceptance, and
that such Participant agree to such further terms and conditions as specified in such agreement or
document. The grant of an Award under this Plan shall not confer any rights upon the Participant
holding such Award other than such terms, and subject to such conditions, as are specified in this
Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in
the agreement or other document evidencing such Award.
15.7 No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent
the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of Options, Restricted Shares,
Restricted Share Units, Other Stock-Based Awards or other types of Awards provided for hereunder.
15.8 No Right to Employment. The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or any Subsidiary or Affiliate.
Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from
employment, free from any liability or any claim under the Plan, unless otherwise expressly
provided in an Award Agreement.
15.9 No Rights as Stockholder. Subject to the provisions of the Plan and the applicable Award
Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a
stockholder with respect to any Shares to be distributed under the Plan until such person has
become a holder of such Shares. Notwithstanding the foregoing, in connection with each grant of
Restricted Shares hereunder, the applicable Award Agreement shall specify if and to what extent the
Participant shall not be entitled to the rights of a stockholder in respect of such Restricted
Shares.
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15.10 Governing Law. The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan and any Award Agreement shall be determined in accordance with the
laws of the State of Maryland without giving effect to conflicts of laws principles.
15.11 Severability. If any provision of the Plan or any Award is, or becomes, or is deemed to
be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
15.12 Other Laws. The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines that the issuance or
transfer of such Shares or such other consideration might violate any applicable law or regulation
(including applicable non-U.S. laws or regulations) or entitle the Company to recover the same
under Exchange Act Section 16(b), and any payment tendered to the Company by a Participant, other
holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to
the relevant Participant, holder or beneficiary.
15.13 No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed
to create a trust or separate fund of any kind or a fiduciary relationship between the Company or
any Subsidiary or Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an
Award, such right shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary or Affiliate.
15.14 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award, and the Committee shall determine whether cash, other securities or other
property shall be paid or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
15.15 Headings. Headings are given to the sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.
15.16 1940 Act. No provision of this Plan shall contravene any portion of the 1940 Act, and in
the event of any conflict between the provisions of the Plan or any Award and the 1940 Act, the
applicable section of the 1940 Act shall control and all Awards under the Plan shall be so
modified. All participants holding such modified Awards shall be notified of the changes to their
Awards and such change shall be binding on such participant.
Section 16. Term Of The Plan.
16.1 Effective Date. The Plan shall be effective as of February 13, 2007, provided it has
been approved by the Board and by the Companys stockholders.
16.2 Expiration Date. No new Awards shall be granted under the Plan after the tenth
anniversary of the Effective Date. Unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted hereunder may, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any
conditions or rights under any such Award shall, continue after the tenth anniversary of the
Effective Date.
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