RESOURCE MORTGAGE CAPITAL, INC. BONUS PLAN
Published on March 24, 1997
Exhibit 10.9
RESOURCE MORTGAGE CAPITAL, INC.
BONUS PLAN
RESOURCE MORTGAGE CAPITAL, INC.
BONUS PLAN
ARTICLE I
Purpose
1.01 The Resource Mortgage Capital, Inc. Bonus Plan (the "Bonus Plan") is a
performance-based incentive plan designed to reward executive officers and other
key employees of Resource Mortgage Capital, Inc. and its affiliates
(collectively the "Corporation") specified by the Committee, as defined in
Section 7.01, for achieving performance objectives. The Bonus Plan is intended
to provide an incentive for superior performance and to motivate participants
toward even higher achievement and business results, and to enable the
Corporation to attract and retain highly qualified employees. The Bonus Plan is
also intended to secure the full deductibility of incentive compensation which
is payable to the Corporation's Chief Executive Officer and the four highest
compensated executive officers (collectively the "Covered Employees") whose
compensation is required to be reported in the Corporation's proxy statement and
which is intended to qualify as "performance-based compensation" as described in
Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the
"Code").
ARTICLE II
Eligibility and Participation
2.01 Only (i) executive officers of the Corporation and (ii) such other key
employees of the Corporation as are recommended by management to and designated
by the Committee shall be eligible to participate in the Bonus Plan. Prior to or
at the time performance objectives are established for a "Performance Period,"
as defined below, the Committee will designate in writing which executive
officers and other key employees among those who may be eligible to participate
in the Plan shall in fact be participants for such Performance Period (the
"Participants").
ARTICLE III
Plan Year and Performance Objectives
3.01 Plan Year. The fiscal year of the Bonus Plan (the "Plan Year") shall be the
calendar year beginning on January 1 and ending on the last business day of
December. The performance period (the "Performance Period") with respect to
which awards may be payable under their Plan shall be the Plan Year. The initial
Plan Year shall commence on January 1, 1997 and end on the last business day of
December, 1997.
3.02 Performance Goal Setting Period. Within the first ninety (90) days of each
Performance Period, the Committee shall establish in writing, with respect to
such Performance Period, one or more performance goals, a specific target
objective or objectives with respect to such performance goals and an objective
formula or method for computing the amount payable to each Participant under the
Plan if the performance goals are attained. Notwithstanding the foregoing
sentence, for any Performance Period, such goals, objectives and compensation
formulae or methods must be established within that number of days, beginning on
the first day of such Performance Period, which is no more than twenty-five
percent (25%) of the total number of days in such Performance Period.
3.03 Performance Measurement. Performance goals shall be based upon
one or more of the following business criteria as applied to an
individual Participant, a business unit or the Corporation as a whole:
earnings per share delinquency ratios
share price credit loss levels
revenue growth market share
return on equity cash flow
return on assets or net assets expenses
timely completion of specific total shareholders' equity
projects
retention or hiring of key return on capital
employees
net interest margin return on portfolio assets
income or net income (before or portfolio growth
after taxes)
sales servicing volume
operating income or net operating production volume
income
operating margin total return
return on operating revenue dividends
The Committee may adopt other performance goals in its sole and absolute
discretion, provided, however, that in the event the Committee determines to
adopt performance goals based on criteria other than those stated above, the
Committee shall obtain shareholder approval of such criteria if such performance
goals are intended to comply with Section 162 of the Code. All performance goals
adopted by the Committee which are intended to comply with Section 162 of the
Code shall be preestablished, objective performance goals as described in
Treasury Regulation Section 1.162-27(e)(2), promulgated under Section 162(m) of
the Code. Measurements of the Corporation's or a Participant's performance
against the performance goals established by the Committee shall if such
performance goals are intended to comply with Section 162 of the Code, be
objectively determinable and, to the extent any performance goal is expressed in
standard accounting terms, such performance goal shall be determined according
to generally accepted accounting principles as in existence on the date on which
the performance goals are established and without regard to any changes in such
principles after such date.
ARTICLE IV
Determination of Bonus Awards
4.01 At the beginning of each Plan Year, each Participant will be notified of
the target bonus ("Bonus Award") that can be earned based on performance with
respect to that Plan Year. The Committee may specify that the Bonus Award for a
Plan Year will be earned if the applicable target is achieved for one goal or
for any one of a number of goals. The Committee may also provide that the Bonus
for a Plan Year will be earned only if targets are achieved for more than one
performance goal. The Committee may also provide that the Bonus to be earned for
a given Plan Year will vary based upon different levels of achievement of the
applicable performance targets.
4.02 As soon as practicable on or after the last day of the relevant Performance
Period, the Committee shall certify in writing to what extent the Corporation
and the Participants have achieved the performance goal or performance goals for
such Performance Period, including the specific target objective or objectives
and the satisfaction of any other material terms of the Bonus Award and the
Committee shall calculate the amount of each Participant's actual Bonus Award
for such Performance Period based upon the performance goals, objectives and
computation formulae or methods for such Performance Period. The Committee shall
have no discretion to increase the maximum amount of any Participant's Bonus
Award as so determined.
4.03 No Participant's Bonus Award for any Plan Year shall exceed $750,000.
ARTICLE V
Payment of Bonus Awards
5.01 Approved Bonus Awards shall be payable by the Corporation to each
Participant in cash, in one or more installments, as soon as reasonably
practicable on or after the last day of the relevant Performance Period,
provided that the Committee has first certified in writing that the relevant
performance goals were achieved.
5.02 If a Participant ceases to be employed by the Corporation prior to the end
of any Plan Year, due to termination of employment for any reason (including
death) and such Participant has met one or more of his performance goals for the
Plan Year, the Participant shall be entitled to his Bonus Award for such Plan
Year, subject to the Committee's right to reduce or eliminate such Bonus Award,
as it may determine in its sole discretion.
ARTICLE VI
Other Terms and Conditions
6.01 Term of Plan. The Bonus Plan shall become effective upon its adoption by
the Board, subject to the subsequent approval thereof by the shareholders of the
Corporation in accordance with Section 6.02 below. It shall continue in effect
until terminated under Article 8 hereof.
6.02 Shareholder Approval. No Bonus Awards shall be paid under the Bonus Plan
with respect to Bonus Awards intended to comply with Section 162(m) of the Code
unless and until the material terms of the Plan, including the business criteria
described in the Plan, are disclosed to the Corporation's shareholders and are
approved by the shareholders as provided in Section 162(m) of the Code.
6.03 No Participation Rights. No person shall have any legal claim to be granted
a Bonus Award under the Bonus Plan and the Committee shall have no obligation to
treat Participants uniformly. Participation in the Bonus Plan in any Plan Year
does not entitle any Participant to participate in the Plan in any other Plan
Year. The right to receive a targeted Bonus Award in any given year does not
entitle a Participant to participate with respect to the same targeted Bonus
Award in any subsequent year.
6.04 No Rights to Specific Property. Except as may be otherwise required by law,
a Participant's rights and interests under the Bonus Plan shall not be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind, either
voluntary or involuntary. No Participant shall have any claim with respect to
any specific assets of the Corporation.
6.05 No Employment Rights. Neither the Bonus Plan nor any action taken under the
Plan shall confer upon any Participant any right with respect to continuation of
employment by the Corporation (or any subsidiary or affiliated corporation) or
to maintain any Participant's compensation at any level, nor shall it interfere
in any way with any Participant's right or the right of the Corporation (or any
subsidiary or affiliated corporation) to terminate a Participant's employment at
any time or for any reason.
6.06 Incapacity of Participant or Beneficiary. If the Committee finds that any
Participant to whom a Bonus Award is payable under the Bonus Plan is unable to
care for his or her affairs because of illness or accident or is under a legal
disability, any Bonus Award due (unless a prior claim therefore shall have been
made by a duly appointed legal representative) at the discretion of the
Committee, may be paid to the spouse, child, parent or brother or sister of such
Participant or to any person whom the Committee has determined has incurred
expense for such Participant. Any such payment shall be a complete discharge of
the obligations of the Corporation under provisions of the Bonus Plan to the
extent of such payment.
6.07 Tax Withholding. The Corporation will withhold from each Bonus Award at the
time of payment thereof all applicable state, local and federal withholding
taxes, as required by law, as determined by the Corporation in its sole
discretion.
6.08 Governing Law. The place of administration of the Bonus Plan shall be in
the State of Virginia and the validity, construction, interpretation,
administration and effect of the Bonus Plan and the rules, regulations and
rights relating to the Bonus Plan, shall be determined solely in accordance with
the laws of the State of Virginia.
ARTICLE VII
Administration
7.01 Administrator. The Plan shall be administered by a Committee of the Board.
Such Committee may be the Compensation Committee of the Board, a subcommittee
thereof, or any other committee as the Board may appoint; provided, however,
that the Committee shall consist of at least two (2) members. All members of the
Committee shall be persons who qualify as "outside directors" as defined under
Section 162(m) of the Code. Unless otherwise provided by the Board, the
Compensation Committee of the Board (or such members of the Compensation
Committee as shall constitute "outside directors" if all such members do not
constitute "outside directors") shall constitute the Committee hereunder.
7.02 Powers of the Administrator. The Committee shall have full power, authority
and discretion to administer and interpret the provisions of the Bonus Plan and
to adopt such rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the Committee
deems necessary or advisable. Without limitation of the foregoing, subject to
the provisions of the Plan and such limitations as are necessary or desirable in
order for incentive awards paid to Covered Employees to constitute qualified
performance-based compensation under Section 162(m) of the Code, the Committee
shall have the authority, in its discretion: (i) to determine the employees who
shall be Participants in the Bonus Plan; (ii) to interpret the Bonus Plan; (iii)
to determine the terms and conditions, not inconsistent with the terms of the
Bonus Plan, of any Bonus Award granted hereunder (iv) to prescribe, amend and
rescind rules and regulations relating to the Plan; (v) to make all other
determinations deemed necessary or advisable for the administration of the Bonus
Plan.
7.03 Effect of Decisions by the Administrator. All decisions,
determinations and interpretations of the Administrator shall be final
and binding on all Participants.
ARTICLE VIII
Amendment and Termination
8.01 The Board may at any time amend, alter, suspend or terminate the Plan, as
it may deem advisable; provided that, to the extent necessary and desirable to
comply with Section 162(m) of the Code (or any other applicable law, regulations
or rules), the Corporation shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as it is required.