AMENDMENT TO ARTICLES OF INCORPORATION
Published on May 16, 1997
Exhibit 10.11
RESOURCE MORTGAGE CAPITAL, INC.
1992 STOCK INCENTIVE PLAN
(As Amended)
TABLE OF CONTENTS
Page
RESOURCE MORTGAGE CAPITAL, INC.
1992 STOCK INCENTIVE PLAN
(As Amended)
ARTICLE I
DEFINITIONS
1.01 Administrator means the Committee.
1.02 Affiliate means any entity in which the Company has a significant equity
interest, as determined by the Company.
1.03 Agreement means a written agreement (including any amendment or supplement
thereto) between the Company and a Participant specifying the terms and
conditions of an award of Restricted Stock or an Option or SAR granted to such
Participant.
1.04 Average Net Worth means for any period the arithmetic average of the Net
Worth of the Company at the beginning of such period and at the end of such
period.
1.05 Board means the Board of Directors of the Company.
1.06 Code means the Internal Revenue Code of 1986, and any amendments thereto.
1.07 Committee means a committee of the Board; such Committee may be the
Compensation Committee of the Board, a subcommittee thereof, or any other
committee the Board may appoint, and in all events shall consist of at least two
members.
1.08 Common Stock means the Common Stock of the Company.
1.09 Company means Resource Mortgage Capital, Inc., or any successor thereto.
1.10 Corresponding SAR means an SAR that is granted in relation to a particular
Option and that can be exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which the SAR relates.
1.11 DER Accrual Period means any period that begins with the previous DER Award
Date, or any date determined by the Committee after the grant date of the
related Option or SAR if there is no previous DER Award Date, and ends on the
next DER Award Date.
1.12 DER Award Date means any date determined by the Committee on which Dividend
Equivalent Rights are awarded.
1.13 Dividend Equivalent Right means any right granted under Section 9.01 of the
Plan.
1.14 Fair Market Value means, on any given date, the closing price of a share of
Common Stock as reported on the New York Stock Exchange composite tape on such
date, or if the Common Stock was not traded on the New York Stock Exchange on
such day, then on the next preceding day that the Common Stock was traded on
such exchange, all as reported by such source as the Administrator may select.
1.15 Initial Value means, with respect to an SAR, the Fair Market Value of one
share of Common Stock on the date of grant.
1.16 Net Worth means the excess of the Company's assets over liabilities, as
determined in accordance with generally accepted accounting principles.
1.17 Option means a stock option that entitles the holder to purchase from the
Company a stated number of shares of Common Stock at the price set forth in an
Agreement.
1.18 Participant means a key employee of the Company or an Affiliate, including
an employee who is a member of the Board and is selected by the Administrator to
receive a Restricted Stock award, an Option, an SAR, or a combination thereof.
1.19 Plan means the Resource Mortgage Capital, Inc. 1992 Stock Incentive Plan.
1.20 Restricted Stock means Common Stock awarded to a Participant under Article
X. Shares of Common Stock shall cease to be Restricted Stock when, in accordance
with the terms of the applicable Agreement, they become transferable and free of
substantial risks of forfeiture.
1.21 SAR means a stock appreciation right that entitles the holder to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the amount determined by the Administrator and specified in an Agreement.
In the absence of such a determination, the holder shall be entitled to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the excess of the Fair Market Value on the date of exercise over the
Initial Value. References to "SARs" include both Corresponding SARs and SARs
granted independently of Options, unless the context requires otherwise.
ARTICLE II
PURPOSES
2.01 The Plan is intended to assist the Company in recruiting and retaining
individuals with ability and initiative who provide services to the Company or
an Affiliate by enabling such persons to participate in its future success and
to associate their interests with those of the Company and its shareholders. The
Plan is intended to permit the award of shares of Restricted Stock, the grant of
SARs, the grant of Options not qualifying for special tax treatment under
Section 422 of the Code and the award of Dividend Equivalent Rights. The
proceeds received by the Company from the sale of any Common Stock pursuant to
this Plan shall be used for general corporate purposes.
ARTICLE III
ADMINISTRATION
3.01 The Plan shall be administered by the Administrator. The Administrator
shall have authority to award Restricted Stock and to grant Options (with or
without Dividend Equivalent Rights) and SARs (with or without Dividend
Equivalent Rights) upon such terms (not inconsistent with the provisions of this
Plan) as the Administrator may consider appropriate. Such terms may include
conditions (in addition to those contained in this Plan) on the exercisability
of all or any part of an Option, an SAR or Dividend Equivalent Rights or on the
transferability or forfeitability of Restricted Stock. Such conditions may be
based on business criteria contemplated by Section 162(m) of the Code and may
include earnings per share, share price, revenue growth, return on equity,
return on assets or net assets, timely completion of specific projects,
retention or hiring of key employees, net interest margin, income or net income
(before or after taxes), sales, operating income or net operating income,
operating margin, return on operating revenue, delinquency ratios, credit loss
levels, market share, cash flow, expenses, total shareholders' equity, return on
capital, return on portfolio assets, portfolio growth, servicing volume,
production volume, total return and dividends. Notwithstanding any such
conditions, the Administrator may, in its discretion, accelerate the time at
which any Option, SAR or Dividend Equivalent Rights may be exercised or the time
at which Restricted Stock may become transferable or nonforfeitable. In
addition, the Administrator shall have complete authority to interpret all
provisions of this Plan; to prescribe the form of Agreements; to adopt, amend,
and rescind rules and regulations pertaining to the administration of the Plan;
and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Administrator shall not be construed as limiting any power or authority
of the Administrator. Any decision made, or action taken, by the Administrator
or in connection with the administration of this Plan shall be final and
conclusive. Neither the Administrator nor any member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any
Agreement, Option, SAR, Dividend Equivalent Right or Restricted Stock award. All
expenses of administering this Plan shall be borne by the Company.
3.02 Anything in the Plan to the contrary notwithstanding, all members of the
Committee shall be persons who qualify as "outside directors" as defined in
Section 162 of the Code. The Board may require that all members of the Committee
also be "non-employee directors" as defined in Rule 16b-3 of the Securities and
Exchange Commission. 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.
ARTICLE IV
ELIGIBILITY
4.01 General. Any employee of the Company or an Affiliate (including a
corporation that becomes an Affiliate after the adoption of this Plan) is
eligible to participate in this Plan if the Administrator, in its sole
discretion, determines that such person has contributed significantly or can be
expected to contribute significantly to the profits or growth of the Company or
an Affiliate. Directors of the Company (whether or not employees of the Company
or an Affiliate) may also be selected to participate in this Plan.
4.02 Grants. The Administrator will designate individuals to whom shares of
Restricted Stock are to be awarded and to whom Options (with or without Dividend
Equivalent Rights) and SARs (with or without Dividend Equivalent Rights) are to
be granted and will specify the number of shares of Common Stock subject to each
award or grant. An Option may be granted with or without a related SAR. An SAR
may be granted with or without a related Option. All shares of Restricted Stock
awarded, and all Options, SARs and Dividend Equivalent Rights granted, under
this Plan shall be evidenced by Agreements which shall be subject to applicable
provisions of this Plan and to such other provisions as the Administrator may
adopt.
ARTICLE V
STOCK SUBJECT TO GRANTS
5.01 Upon the award of shares of Restricted Stock the Company may issue
authorized but unissued Common Stock. Upon the exercise of any Option, SAR or
Dividend Equivalent Right, the Company may deliver to the Participant (or the
Participant's broker if the Participant so directs), authorized but unissued
Common Stock. The maximum aggregate number of shares of Common Stock that may be
issued pursuant to the exercise of Options, SARs and Dividend Equivalent Rights
and the award of Restricted Stock under this Plan is 1,200,000. Anything in the
Plan to the contrary notwithstanding, no Participant, in any fiscal year, may be
awarded grants hereunder covering in the aggregate more than 100,000 shares of
Common Stock; provided, however, that shares of Common Stock underlying a tandem
grant of Options and Corresponding SARs shall be counted only once in
calculating this limit. The maximum aggregate number of shares of Common Stock
that may be issued under this Plan as a whole, as well as the per Participant
limit described in the immediately preceding sentence hereof, shall be subject
to adjustment as provided in Article XI. If an Option is terminated, in whole or
in part, for any reason other than its exercise or the exercise of a
Corresponding SAR, the number of shares of Common Stock allocated to the Option
and any related Dividend Equivalent Rights or portion thereof may be reallocated
to other Options, SARs, Dividend Equivalent Rights and Restricted Stock awards
to be granted under this Plan. Upon the termination of an SAR, in whole or in
part, other than in connection with its exercise (or the exercise of a related
Option) for shares of Common Stock, the number of shares of Common Stock
allocated to the SAR and any related Dividend Equivalent Rights or portion
thereof may be reallocated to other Options, SARs, Dividend Equivalent Rights
and Restricted Stock awards to be granted under this Plan.
ARTICLE VI
OPTION PRICE
6.01 The price per share for Common Stock purchased on the exercise of an Option
shall be determined by the Committee on the date of grant.
ARTICLE VII
EXERCISE OF OPTIONS
7.01 Maximum Option or SAR Period. The maximum period in which an Option or SAR
may be exercised shall be determined by the Administrator on the date of grant,
but will not exceed 10 years from the date of the grant.
7.02 Nontransferability. Any Option, SAR or Dividend Equivalent Right granted
under this Plan shall be nontransferable except by will or by the laws of
descent and distribution or as permitted by the Committee. In the event of any
such transfer, the Option and any Corresponding SAR or Dividend Equivalent Right
that relates to such Option must be transferred to the same person or person(s).
During the lifetime of the Participant to whom the Option, SAR or Dividend
Equivalent Right is granted, the Option, SAR or Dividend Equivalent Right may be
exercised only by the Participant. No right or interest of a Participant in any
Option, SAR or Dividend Equivalent Right shall be liable for, or subject to, any
lien, obligation, or liability of such Participant.
7.03 Employee Status. The terms of any Option or SAR may provide for exercise
within a period following termination of employment. In the event that the terms
of any Option or SAR provide that it may be exercised only during employment or
continued service or within a specified period of time after termination of
employment or service, the Administrator may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability, or
other reasons shall not be deemed interruptions of continuous employment or
service.
ARTICLE VIII
METHOD OF EXERCISE
8.01 Exercise. Subject to the provisions of Articles VII and XII, an Option or
SAR may be exercised in whole at any time or in part from time to time at such
times and in compliance with such requirements as the Administrator shall
determine. An Option or SAR granted under this Plan may be exercised with
respect to any number of whole shares less than the full number for which the
Option or SAR could be exercised. A partial exercise of an Option or SAR shall
not affect the right to exercise the Option or SAR from time to time in
accordance with this Plan and the applicable Agreement with respect to the
remaining shares subject to the Option or related to the SAR. The exercise of
either an Option or Corresponding SAR shall result in the termination of the
other to the extent of the number of shares with respect to which the Option or
Corresponding SAR is exercised.
8.02 Payment Terms for Exercise of Options. Unless otherwise provided by the
Agreement, payment of the Option price shall be made in cash or a cash
equivalent acceptable to the Administrator. If the Agreement provides, payment
of all or part of the Option price may be made by surrendering shares of Common
Stock to the Company. If Common Stock is used to pay all or part of the Option
price, the shares surrendered must have a Fair Market Value (determined as of
the day preceding the date of exercise) that is not less than such Option price
or such portion of the Option price paid by surrender of shares.
8.03 Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR.
At the Administrator's discretion, the amount payable as a result of the
exercise of an SAR (and any related DERs) may be settled in cash, Common Stock,
or a combination of cash and Common Stock. No fractional share shall be
deliverable upon the exercise of an SAR but a cash payment will be made in lieu
thereof.
8.04 Shareholder Rights. No Participant shall have any rights as a stockholder
with respect to shares subject to his Option or SAR until the date of exercise
of such Option or SAR and then only to the extent shares of Common Stock are
issued.
ARTICLE IX
DIVIDEND EQUIVALENT RIGHTS
9.01 Dividend Equivalent Rights. If provided in an Agreement, any Option or SAR
granted hereunder will accrue Dividend Equivalent Rights on each DER Award Date
following the grant of such Option or SAR in an amount determined by the
following formula: the number of shares of Common Stock subject to the Option or
SAR (including for this purpose the number of shares of Common Stock subject to
Dividend Equivalent Rights previously accrued on such Option or SAR) will be
multiplied by the Dividend Excess (as hereinafter defined) per outstanding share
of Common Stock, and the resulting product will be divided by the Fair Market
Value on the DER Award Date. The "Dividend Excess," if any, for any DER Award
Date shall equal the excess of dividends actually paid on shares of Common Stock
during the DER Accrual Period ending with the DER Award Date, which excess shall
not exceed the Company's net income for such period, over the Benchmark Earnings
(as hereinafter defined). The Benchmark Earnings for any DER Award Date shall
equal the product of (i) the Designated Yield (as hereinafter defined) for the
DER Accrual Period ending with the DER Award Date, (ii) the Company's Average
Net Worth during such DER Accrual Period and (iii) a fraction, the numerator of
which is the number of days in the DER Accrual Period ending with the DER Award
Date and the denominator of which is 365. The Designated Yield shall be set by
the Committee on each DER Award Date, but will not be less than 2%. The
Committee will determine if the DERs are to be paid in additional Options (if
Options were granted), in additional SARs (if SARs were granted), in Common
Stock or in cash.
9.02 Time and Method of Exercise. Upon exercise of the Option or the SAR, a
number of accrued Dividend Equivalent Rights shall be deemed to have been
exercised equal to the total number of such accrued Dividend Equivalent Rights
as of the end of the month preceding the month of exercise multiplied by a
fraction, the numerator of which is the number of shares of Common Stock for
which the Option or SAR is being exercised on such date, and the denominator of
which is the maximum number of shares of Common Stock for which the Option or
the SAR could have been exercised immediately prior to such exercise; provided,
however, that any fractional Dividend Equivalent Rights resulting from this
calculation shall not be deemed to have been exercised. As provided in an
Agreement, each Dividend Equivalent Right shall entitle the Option or the SAR
holder to receive either (i) additional Options or SARs, as the case may be;
(ii) Common Stock or (iii) cash upon the deemed exercise of such Right.
Fractional Dividend Equivalent Rights shall continue to accrue with respect to
any Option or SAR that has not been totally exercised. Upon the total exercise
of any Option or SAR, any remaining fractional Dividend Equivalent Rights
accrued with respect thereto shall be canceled if paid in stock. Upon the
exercise of the Dividend Equivalent Rights on an Option, the proportionate
number of Dividend Equivalent Rights on any Corresponding SAR will be canceled
and vice versa.
ARTICLE X
RESTRICTED STOCK
10.01 Award. In accordance with the provisions of Article IV, the Administrator
will designate each individual to whom an award of Restricted Stock is to be
made and will specify the number of shares of Common Stock covered by the award.
10.02 Vesting. The Administrator, on the date of the award, may prescribe that a
Participant's rights in the Restricted Stock shall be forfeitable or otherwise
restricted for a period of time set forth in the Agreement. By way of example
and not of limitation, the restrictions may postpone transferability of the
shares or may provide that the shares will be forfeited if the Participant
separates from the service of the Company and its Affiliates before the
expiration of a stated term or if the Company, the Company and its Affiliates or
the Participant fails to achieve stated objectives.
10.03 Shareholder Rights. If provided in the Agreement, prior to their
forfeiture (in accordance with the terms of the Agreement and while the shares
are Restricted Stock), a Participant will have all rights of a shareholder with
respect to Restricted Stock, including the right to receive dividends and vote
the shares; provided, however, that (i) a Participant may not sell, transfer,
pledge, exchange, hypothecate, or otherwise dispose of Restricted Stock, (ii)
the Company shall retain custody of the certificates evidencing shares of
Restricted Stock, and (iii) the Participant will deliver to the Company a stock
power, endorsed in blank, with respect to each award of Restricted Stock. The
limitations set forth in the preceding sentence shall not apply after the shares
cease to be Restricted Stock.
ARTICLE XI
ADJUSTMENT UPON CHANGE IN COMMON STOCK
11.01 The maximum number of shares as to which Restricted Stock may be awarded
and as to which Options, SARs and Dividend Equivalent Rights may be granted
under this Plan shall be proportionately adjusted, and the terms of outstanding
Restricted Stock awards, Options, SARs and Dividend Equivalent Rights shall be
adjusted, as the Administrator shall determine to be equitably required in the
event that (a) the Company (i) effects one or more stock dividends, stock
split-ups, subdivisions or consolidations of shares or (ii) engages in a
transaction described in Section 424 of the Code or (b) there occurs any other
extraordinary event which, according to generally accepted accounting
principles, necessitates such action. Any determination made under this Article
XI by the Administrator shall be final and conclusive.
11.02 The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, outstanding
awards of Restricted Stock, Options, SARs and Dividend Equivalent Rights.
11.03 The Administrator may award shares of Restricted Stock, may grant Options
(with or without Dividend Equivalent Rights), and may grant SARs (with or
without Dividend Equivalent Rights) in substitution for stock awards, stock
options, stock appreciation rights, or similar awards held by an individual who
becomes an employee of the Company or an Affiliate in connection with a
transaction described in the first paragraph of this Article XI. Notwithstanding
any provision of the Plan (other than the limitation of Article V), the terms of
such substituted Restricted Stock awards and Option, SAR or Dividend Equivalent
Rights grants shall be as the Administrator, in its discretion, determines is
appropriate.
ARTICLE XII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
12.01 No Option or SAR shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements), any listing agreement to which the Company is a party, and the
rules of all domestic stock exchanges on which the Company's shares may be
listed. The Company shall have the right to rely on an opinion of its counsel as
to such compliance. Any share certificate issued to evidence Common Stock for
which shares of Restricted Stock are awarded or for which an Option or SAR is
exercised may bear such legends and statements as the Administrator may deem
advisable to assure compliance with federal and state laws and regulations. No
Option or SAR shall be exercisable, no Restricted Stock shall be awarded, no
Common Stock shall be issued, no certificate for shares shall be delivered, and
no payment shall be made under this Plan until the Company has obtained such
consent or approval as the Administrator may deem advisable from regulatory
bodies having jurisdiction over such matters.
ARTICLE XIII
GENERAL PROVISIONS
13.01 Effect on Employment. Neither the adoption of this Plan, its operation,
nor any documents describing or referring to this Plan (or any part thereof)
shall confer upon any individual any right to continue in the employ or service
of the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment or service of any individual
at any time with or without assigning a reason therefor.
13.02 Unfunded Plan. The Plan, insofar as it provides for grants, shall be
unfunded, and the Company shall not be required to segregate any assets that may
at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this
Plan. No such obligation of the Company shall be deemed to be secured by any
pledge of, or other encumbrance on, any property of the Company.
13.03 Rules of Construction. Headings are given to the articles and sections of
this Plan solely as a convenience to facilitate reference. The reference to any
statute, regulation, or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
ARTICLE XIV
AMENDMENT
14.01 The Board may at any time amend or terminate this Plan. The Board, in its
discretion, may require any Plan amendments to be submitted for approval by the
shareholders of the Company, including, but not limited to, cases in which such
approval is deemed necessary for compliance with Section 162(m) or other
requirements of the Code or with the requirements of any listing exchange, or to
secure exemption from Section 16(b) of the Securities Exchange Act of 1934. No
amendment shall, without a Participant's consent, adversely affect any rights of
such Participant under any outstanding Restricted Stock award or under any
Option or SAR outstanding at the time such amendment is made.
ARTICLE XV
DURATION OF PLAN
15.01 No shares of Restricted Stock may be awarded and no Option, SAR or
Dividend Equivalent Right may be granted under this Plan more than ten years
after the earlier of the date that the Plan is adopted by the Board or the date
that the Plan is approved by shareholders as provided in Article XV. Restricted
Stock awards and Options, SARs and Dividend Equivalent Rights granted before
that date shall remain valid in accordance with their terms.
ARTICLE XVI
EFFECTIVE DATE OF PLAN
16.01 Shares of Restricted Stock may be awarded and Options, SARs and Dividend
Equivalent Rights may be granted under this Plan upon its adoption by the Board,
provided that no Restricted Stock award, Option, SAR or Dividend Equivalent
Right will be effective unless this Plan is approved by a majority of the votes
entitled to be cast by the Company's shareholders, voting either in person or by
proxy, at a duly held shareholders' meeting within twelve months of such
adoption.