Attached files
| file | filename |
|---|---|
| 10-K - EDELMAN FINANCIAL GROUP INC. | v177327_10k.htm |
| EX-23.1 - EDELMAN FINANCIAL GROUP INC. | v177327_ex23-1.htm |
| EX-31.1 - EDELMAN FINANCIAL GROUP INC. | v177327_ex31-1.htm |
| EX-32.1 - EDELMAN FINANCIAL GROUP INC. | v177327_ex32-1.htm |
| EX-32.2 - EDELMAN FINANCIAL GROUP INC. | v177327_ex32-2.htm |
| EX-23.2 - EDELMAN FINANCIAL GROUP INC. | v177327_ex23-2.htm |
| EX-31.2 - EDELMAN FINANCIAL GROUP INC. | v177327_ex31-2.htm |
| EX-21.1 - EDELMAN FINANCIAL GROUP INC. | v177327_ex21-1.htm |
| EX-10.07 - EDELMAN FINANCIAL GROUP INC. | v177327_ex10-07.htm |
Exhibit
10.06
SANDERS
MORRIS HARRIS GROUP INC.
2009 MANAGEMENT
INCENTIVE PROGRAM
Section 1. Overview. The
2009 Management Incentive Program (the “Program”)
may pay cash bonuses (each, a “Bonus
Award”) to select senior officers of Sanders Morris Harris Group Inc. and
its subsidiaries (the “Company”).
Bonus Awards are paid annually. The amount of a Bonus Award is based
upon an employee’s Bonus Target, performance during the Performance Year, and
the Incentive Pool made available for payments under the Program for the
applicable Performance Year.
Section 2. Purpose. The
Program is designed to provide an annual incentive compensation opportunity for
key senior officers of the Company for achieving critical financial goals of the
Company.
Section 3. Performance
Year. The Program is effective for the period beginning
January 1, 2009, and ending December 31, 2009 (the “Performance
Year”).
Section 4. Eligibility. Those
employees who are determined to be eligible to receive a Bonus Award are called
“Participants.”
(a) Eligible
Participants. Except as specifically provided otherwise in
this Program, a person must be employed by the Company, on active status on the
Company payroll, on salary continuation, or on a formal leave of absence on or
before June 30 (unless waived by the Chairman (as hereinafter defined)) and
on the last day of the Performance Year (except as provided in cases of death or
disability or termination without Cause as defined in Sections 6, 7, or 8
below) to be eligible for participation in the Program. A Participant
may work either full-time or part-time as an employee, as long as other
eligibility criteria are met.
(b) Determination of
Participants. Prior to the beginning of the Performance Year,
or as soon as practicable thereafter, the Chairman of the Board of Directors
(the “Chairman”)
shall recommend to the Compensation Committee and the Compensation Committee
shall determine which senior officers of the Company (“Senior
Officers”)
are Participants. Additional Participants may be included during the
Performance Year and, as provided herein, an employee’s participation in the
Program may terminate. The Participants currently identified are set
forth on Exhibit A attached hereto.
Section 5. Bonus
Award. There is no minimum Bonus Award or guaranteed payment,
however, there may be a minimum Bonus Award or guaranteed payment provided to
certain designated employees based on a pre-existing employment agreement or
understanding. A Participant’s Bonus Award is calculated with
reference to such Participant’s Bonus Target (as defined below), that
Participant’s performance for the Performance Year, and the Incentive Pool (as
defined below) for the Performance Year.
(a) Bonus
Targets.
(1) Each
Participant has a target (the “Bonus
Target”) stated as a percentage of the Incentive Pool.
(2) The
Compensation Committee establishes individual Bonus Targets for
Participants. The Compensation Committee may provide that a portion
of the Incentive Pool will be distributed to specific Participants based on a
formula established at the beginning of the Performance Year and that the
balance of the Incentive Pool may be awarded in the Compensation Committee’s
discretion. Set forth on Exhibit A are the Bonus Targets and the
portion of the Incentive Pool established and identified for distribution based
on the formula set forth on Exhibit A.
(b) Determination of the Incentive Pool
Amount.
(1) At
the end of the Performance Year and closing of the Company’s fiscal year
financials, the Compensation Committee in its sole discretion may identify an
amount as the Incentive Pool. The Compensation Committee will take
into consideration various metrics when determining whether or not to identify
an amount available for payment of Bonus Awards under the Program (referred to
as the “Incentive
Pool”). The performance metric(s) may be based on, among other
things, achievement of Company financial and business plans and achievement of
certain goals vs. the Company’s competitors. In exercising its discretion in
determining the size of the Incentive Pool, if any, the Committee will consider
all circumstances existing at the end of the Performance Year and closing of the
Company’s fiscal year financials, that it deems relevant, including, but not
limited to, the achievement of certain fiscal 2009 operating profits and goals,
market conditions, special, non-recurring circumstances, comparative
performance, balance sheet strength, forecasts, and any other relevant
matters.
(2) As
a general rule the Incentive Pool will be calculated as a percentage of the net
income of the Company before provision for income taxes for 2009 and will vary
depending on the ratio of net income before provision for income taxes to the
average total stockholders’ equity (i.e., net income before provision for income
taxes divided by average total stockholders’ equity, the return on equity or
“ROE”);
provided that net income may exclude extraordinary items (including, but not
limited to, goodwill impairment charges, losses from discontinued operations,
and other extraordinary charges) as determined by the Compensation Committee and
average total stockholders’ equity will be the average of total stockholders’
equity at December 31, 2008 and December 31, 2009. If ROE is less
than 5.0%, the Incentive Pool will be purely in the discretion of the
Compensation Committee. If ROE exceeds 12.5%, the Incentive Pool
shall be limited to 15.0% of net income before provision for income
taxes.
2
|
Incentive Pool as a
|
||||
|
ROE
|
Percent of Pretax Net Income1
|
|||
|
12.5% or greater
|
15.0%
|
|||
|
10.0%,
but less than 12.5%
|
12.5%
|
|||
|
7.5%,
but less than 10.0%
|
10.0%
|
|||
|
5.0%,
but less than 10.0%
|
7.5%
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|||
|
less
than 5.0%
|
Discretionary
|
|||
(c) Determination
of Bonus Award Amount.
(1) A
Bonus Award is calculated with reference to: (i) the amount of the
Incentive Pool multiplied by a Participant’s Bonus Target (this is called the
“Target
Award”), (ii) a Participant’s performance for the Performance Year,
and (iii) the Incentive Pool made available for Bonus Awards under the
Program for the Performance Year.
(2) The
amount of a Bonus Award to a Participant who is a Senior Officer is determined
by the Compensation Committee. A Participant’s Bonus Award can be
either greater than or less than (including zero) a Participant’s Target
Award. The Compensation Committee, in its sole discretion, may
increase or decrease individual awards from their target levels, based on
individual performance and available Incentive Pool.
(3) A
Participant’s Bonus Award is linked to an assessment of a Participant’s total
job performance for the Performance Year. Factors that may be
considered include but are not limited to, what a Participant does to advance
the Company’s success and how a Participant does it, especially leadership and
the skill with which a Participant has performed the primary duties and
responsibilities of the Participant’s job. The Compensation Committee
will consult with the Chairman in establishing the Bonus Target and Target Award
for the Chairman and each of the other Participant’s in the
Program.
(4) There
is neither a minimum nor maximum amount of a Bonus Award that may be paid to a
Participant for the Performance Year. At the Compensation Committee’s
discretion, a Bonus Award amount may be prorated for those Participants who are
eligible to participate in the Program for less than the full Performance
Year.
(d) Payment of
Awards. To be eligible to receive a Bonus Award, a Participant
must be an employee in good standing and, on active status, receiving salary
continuation, or be on a formal leave of absence at the time the Bonus Awards
are distributed. As soon as administratively practicable following
the determination of a Participant’s Bonus Award, but not later than March 15
after the end of the Performance Year to which such Bonus Award relates, such
Bonus Award, less any legally required withholding, shall be paid to a
Participant or, in the event of a Participant’s death, in accordance with
Company policy as stated in Section 6 hereof. Each Participant’s
Bonus Award shall be payable by the Company in cash by March 15th after
the end of the Performance Year to which such Bonus Award relates, generally at
such time as bonuses are paid by SMHG for the relevant fiscal year, but not
before the Compensation Committee certifies in writing that there is an
Incentive Pool, and (ii) shall be paid in U.S. dollars.
1 The
Incentive Pool may not exceed the same percentage of Cash Flow from Operations
for the Performance Year.
3
No
Participant shall have any right to payment of any amounts under this Program
unless and until the Compensation Committee determines the amount of such
Participant’s Bonus Award, that such Bonus Award shall be paid, and the method
and timing of its payment.
Section 6. Death
of a Participant.
(a) Beneficiary. Each
Participant shall have the right to name a beneficiary or beneficiaries to
receive any amount payable hereunder in the event of the Participant’s
death. If the Participant fails to designate a beneficiary or if all
such beneficiaries predecease the Participant, the Participant’s beneficiary
shall be his or her surviving spouse, but if none, then his or her
estate. To be effective, a beneficiary designation must be made in
writing and filed with the Company. A Participant may revoke an
existing beneficiary designation by filing another written beneficiary
designation with the Company. The latest beneficiary designation
received by the Company shall be controlling.
(b) Death during Performance
Year. In case of a Participant’s death during the Performance
Year, the Company may pay a pro rata portion of the Bonus Award to which a
Participant would have been entitled for the Performance Year. Such
pro rata portion shall be equal to (i) the ratio which a Participant’s
completed calendar months of employment during the Performance Year bears to 12
multiplied by (ii) the amount to which the Company determines a Participant
would have been entitled, as determined in Section 5 herein, had a
Participant continued in active status through the end of the Performance
Year.
(c) Death after Performance
Year. In case of the death of a Participant after the end of
the Performance Year, but before the delivery of a Bonus Award to which he or
she may be entitled, such Bonus Award shall be delivered to a Participant’s
beneficiary.
Section 7. Disability
of Participant. In the event of a Participant’s Disability
during the Performance Year, a Participant shall become eligible for a portion
of an Award, based on a pro rata portion of the Performance Year represented by
the time prior to the absence from work caused by the
Disability. Disability is the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended.
4
Section 8. Termination
of Employment. Upon an employee’s termination during the
Performance Year for any reason other than for Cause or those specified in
Sections 6 or 7 hereof, such former employee shall no longer be a
Participant and shall not have any right to a Bonus Award under the
Program. “Cause”
means the termination of the Participant’s employment by the Company by reason
of (a) the conviction of the Participant by a court of competent jurisdiction as
to which no further appeal can be taken of a crime involving moral turpitude or
a felony; (b) the proven commission by the Participant of an act of fraud upon
the Company; (c) the willful and proven misappropriation of any funds or
property of the Company by the Participant; (d) the willful, continued and
unreasonable failure by the Participant to perform the material duties assigned
to him; (e) the knowing engagement by the Participant in any direct, material
conflict of interest with the Company without compliance with the Company’s
conflict of interest policy, if any, then in effect; or (f) the knowing
engagement by the Participant, without the written approval of the Board, in any
activity which competes with the business of the Company or which would result
in a material injury to the business, reputation or goodwill of the
Company.
Section 9. Election
to Defer Benefits
Each
Participant may make an election (a “Deferral
Election”) to defer all or any part of the Participant’s Bonus Award to
be received by such Participant (“Elected Deferred
Benefits”) in accordance with this Section. Elected Deferred Benefits
shall be credited to the Account for each Participant at a time and in a manner
reasonably determined by the Chief Financial Officer of the
Company.
(a) Timing of Deferral
Elections. Each
Participant may make a Deferral Election with respect to a Bonus Award by filing
a written election with the Company on or before October 1, 2009.
(b) Payment Form Election. A
Participant electing to defer Elected Deferred Benefits may make an irrevocable
election to have those Elected Deferred Benefits paid (within 30 days after, or
beginning within 30 days after, a Specified Payment Date (as defined below).
Notwithstanding any such election, if a Specified Payment Date is later than the
Participant’s General Deferral Payment Date (as hereinafter defined), such
Elected Deferred Benefits shall be paid or begin to be paid in accordance with
this paragraph. A “Specified Payment
Date” means a date specified by the Participant at the time he or she
elects to defer the Elected Deferred Benefits in question, which date must be
March 31, June 30, September 30, or December 31 of a
specified year in the future, but no earlier than the March 31st of the
calendar year following the year in which the deferred amounts would have been
paid (if they had not been deferred).
(c) Payment Date. A Participant’s
“Payment
Date” shall mean either the Specified Payment Date or the General
Deferral Payment Date, as applicable:
(i) If
a Specified Payment Date applies to a portion of a Participant’s Account, such
portion of the Participant’s Account shall be paid, or begin to be paid, within
30 days after such Specified Payment Date unless the Participant’s General
Deferral Payment Date occurs prior to the Specified Payment Date.
(ii) The
balance in a Participant’s Account, other than the portion, if any, of the
Participant’s Account for which payment has previously commenced pursuant to
paragraph 9(c)(i), shall be paid, or begin to be paid, in April of the calendar
year following the year of the Participant’s Termination or death, whichever
occurs first (the “General Deferral
Payment Date”).
5
(d) Forms
of Payment
(i) Distributions Prior to
Death. Except as provided in (ii) below, a Participant’s Account
shall automatically be paid in cash in a single lump sum promptly following the
applicable Payment Date(s), unless and to the extent a valid written installment
distribution election has been filed in accordance with paragraph 9(e).
Installment payments shall be made annually in substantially equal installments
over the installment period specified in the installment distribution election,
beginning at or within 30 days after the applicable Payment Date. Each
installment payment shall be computed by dividing the balance of the portion of
the Account that is to be paid in installments by the number of payments
remaining in the installment period.
(ii) Acceleration of
Distributions Upon Death. During the first month of the first calendar
quarter following the death of a current or former Participant, the entire
unpaid balance of his Account shall automatically be paid in cash in a single
lump sum notwithstanding any valid written installment distribution election
then in effect.
(e) Installment Payments. A
Participant may make a separate installment distribution election for each
calendar year’s Elected Deferred Benefit (if any). An installment distribution
election may apply to all or any portion of the Elected Deferred Benefit (if
any) deferred for such calendar year and shall specify the period of years (up
to a maximum of 15 years) over which installment payments are to be made.
Installment distribution elections with respect to a calendar year’s Elected
Deferred Benefit deferred must be made at the time the Participant elects to
defer the Elected Deferred Benefit for the calendar year in question or, if no
Elected Deferred Benefit is elected for that calendar year, not later than the
latest time at which such an election would be permitted. Except as provided in
this paragraph, an installment distribution election is irrevocable once made,
and payments of any Elected Deferred Benefit for the applicable calendar year
will be made in accordance with such election notwithstanding the subsequent
Termination of the Participant.
(f) Vesting. Each Participant
shall be fully vested at all times in the balance of his or her
Account.
6
Section
10. Miscellaneous
(a) Administration of the
Program. The Compensation Committee has the sole discretion
to: (i) adopt such rules, regulations, agreements, and instruments as it
deems necessary to administer the Program; (ii) interpret the terms of the
Program; (iii) determine an employee’s eligibility under the Program;
(iv) determine whether a Participant is to receive a Bonus Award under the
Program; (v) determine the amount of any Bonus Award to a Participant;
(vi) determine when a Bonus Award is to be paid to a Participant;
(vii) amend, suspend, or terminate the Program, without notice; and
(viii) take any and all other actions it deems necessary or advisable for
the proper administration of the Program. The Chief Financial Officer
of the Company shall be responsible for maintaining all necessary support
documentation regarding performance and bonus calculations under the Program.
The Compensation Committee delegates to the Chairman and the Chief Senior
Officer of the Company the authority to administer the Program.
(b) Notification. A
copy of this Program shall be provided to each Participant upon
request. A Participant shall have no right to or interest in an Award
unless and until a Participant’s Award has been determined and paid to a
Participant.
(c) Nature of the
Program. Whether to grant any Bonus Awards under this Program,
and in what amounts, are under the Compensation Committee
discretion. Participation in this Program is not intended, nor should
it be interpreted, to create any entitlement to participate in this or any
future incentive plans or to receive the same or similar incentive payments that
may be received under this Program. No Participant should make any
decision based on any hope or expectation of receiving any incentive under this
Program. Nothing contained in nor will any action under the Program
confer upon any individual any right to continue in the employment of the
Company and does not constitute any contract or agreement of employment or
interfere in any way with the right of the Company to terminate any individual’s
employment.
(d) Termination and
Notification. The Company may
at any time modify, terminate, or from time to time, suspend and, if suspended,
may reinstate the provisions of this Program. Any termination of this
Program will be done in a manner that the Committee determines complies with
Section 409A of the Internal Revenue Code to the extent
applicable.
(e) Withholding Tax. In connection
with any payments to a Participant or other event under this Program that gives
rise to a federal, state, local or other tax withholding obligation relating to
this Program (including, without limitation, FICA tax), (i) the Company may
deduct or withhold (or cause to be deducted or withheld) from any payment or
distribution to such Participant whether or not pursuant to this Program or
(ii) the Committee shall be entitled to require that such Participant remit
cash (through payroll deduction or otherwise), in each case in an amount
sufficient in the opinion of the Company to satisfy such withholding
obligation.
(f) Award Limitations. Bonus Awards made
under this Program are not considered for the purpose of calculating any extra
benefits; any termination, severance, redundancy, or end-of-service premium
payments; other bonuses or long-service awards; overtime premiums; pension or
retirement benefits; or
future base pay or any other payment to be made by the Company to a Participant
or former Participant.
7
(g) All Rights Reserved. The Company
expressly reserves all rights and control over the Program. Although
the Company expects that the Program will continue, the Company may change,
amend, or terminate any provisions of the Program, or the Program itself, at any
time, in its sole discretion.
(h) Unfunded Program. Nothing
contained in this Program will be deemed to require the Company to deposit,
invest or set aside amounts for the payment of any Bonus
Awards. Participation in the Program does not give a Participant any
ownership, security, or other rights in any assets of the Company.
(i) Applicable Law. The Program will
be governed by and construed in accordance with the laws of the State of Texas,
without regard to the principles of conflicts of laws.
(j) Validity. If any of the
provisions of this Program is finally held to be invalid, illegal or
unenforceable (whether in whole or in part), such provision shall be deemed
modified to the extent, but only to the extent, of such invalidity, illegality
or unenforceability and the remaining provisions shall not be affected
thereby.
(k) Compliance with Code Section
409A. The compensation payable by the Company to or with
respect to a Participant pursuant to this Program is intended to be compensation
that is not subject to the tax imposed by Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”),
and the Program shall be administered and construed to the fullest extent
possible to reflect and implement such intent. Any provision of this
Program to the contrary notwithstanding, if a Participant is a specified
employee (within the meaning of Section 409A of the Code) on the date of his or
her separation from service (within the meaning of Section 409A of the Code)
with the group of employers that includes the Company and each other employer
that along with the Company is considered a single employer under Section 414(b)
or 414(c) of the Code, then any payment or benefit to be paid or provided to
such Participant pursuant to this Program that would be subject to the tax
imposed by Section 409A of the Code if paid or provided at the time otherwise
specified in this Program or pursuant to such Participant’s Bonus Award shall be
delayed and thereafter paid or provided on the first business day that is 6
months after the date of such Participant’s separation from service (or if
earlier, within 30 days after the date of such Participant’s death following his
or her separation from service) to the extent necessary for such payment or
benefit to avoid being subject to the tax imposed by Section 409A of the
Code.
(l) Nonassignability No rights of any
Participant (or of any beneficiary pursuant to this Section 10(l)) under
this Program may be sold, exchanged, transferred, assigned, pledged,
hypothecated, or otherwise disposed of (including through the use of any
cash-settled instrument), either voluntarily or involuntarily by operation of
law, other than by will or by the laws of descent and
distribution. Any sale, exchange, transfer, assignment, pledge,
hypothecation or other disposition in violation of the provisions of this
Section 10(l) shall be void and shall not be recognized or given effect by
the Company.
8
(m) Choice
of Forum.
(1) Jurisdiction. The Company and
each Participant, as a condition to such Participant’s participation in this
Program, hereby irrevocably submit to the exclusive jurisdiction of any state or
federal court located in Houston, Texas over any suit, action or proceeding
arising out of or relating to or concerning this Plan. The Company
and each Participant, as a condition to such Participant’s participation in this
Plan, acknowledge that the forum designated by this Section 10(m) has a
reasonable relation to this Program and to the relationship between such
Participant and the Company. Notwithstanding the foregoing, nothing
herein shall preclude the Company from bringing any action or proceeding in any
other court for the purpose of enforcing the provisions of
Section 10(m).
(2) Acceptance of
Jurisdiction. The agreement by
the Company and each Participant as to forum is independent of the law that may
be applied in the action, and the Company and each Participant, as a condition to such Participant’s
participation in this Program, (i) agree to such forum even if the forum
may under applicable law choose to apply non-forum law, (ii) hereby waive,
to the fullest extent permitted by applicable law, any objection which the
Company or such Participant now or hereafter may have to personal jurisdiction
or to the laying of venue of any such suit, action or proceeding in any court
referred to in Section 10(m)(l), (iii) undertake not to commence any
action arising out of or relating to or concerning this Program in any forum
other than the forum described in this Section 10(m) and (iv) agree
that, to the fullest extent permitted by applicable law, a final and
non-appealable judgment in any such suit, action or proceeding in any such court
shall be conclusive and binding upon the Company and each
Participant.
(3) Service of Process. Each Participant,
as a condition to such Participant’s participation in this Program, hereby
irrevocably appoints the General Counsel of Sanders Morris Harris Group
Inc. as such Participant’s agent for service of process in connection
with any action, suit or proceeding arising out of or relating to or concerning
this Program, who shall promptly advise such Participant of any such service of
process.
(4) Confidentiality. Each Participant,
as a condition to such Participant’s participation in this Program, agrees to
keep confidential the existence of, and any information concerning, a dispute,
controversy or claim described in Section 10(m), except that a Participant
may disclose information concerning such dispute, controversy or claim to the
court that is considering such dispute, controversy or claim or to such
Participant’s legal counsel (provided that such counsel agrees not to disclose
any such information other than as necessary to the prosecution or defense of
the dispute, controversy or claim).
9
(n) Waiver of Jury Trial. EACH PARTICIPANT
WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS PROGRAM.
(o) No Third Party
Beneficiaries. This Program
shall not confer on any person other than the Company and any Participant any
rights or remedies hereunder.
(p) Headings. The headings in
this Program are for the purpose of convenience only and are not intended to
define or limit the construction of the provisions hereof.
(q) Construction. In the
construction of this Program, the singular shall include the plural, and vice
versa, in all cases where such meanings would be appropriate.
10
Exhibit
A
1. Senior
Officers Eligible for Bonus Pool
George L. Ball
Rick
Berry
Stephen Cordill
Ric Edelman
Bruce McMaken
2.
Identified
formula established for a portion of the bonus pool:
50% of
the Incentive Pool will be distributed to Participants on a non-discretionary
basis, the balance of the Incentive Pool shall be allocated and distributed at
the discretion of the Compensation Committee
|
George
L. Ball
|
10%
|
|||
|
Rick
Berry
|
10%
|
|||
|
Stephen
Cordill
|
10%
|
|||
|
Ric
Edelman
|
10%
|
|||
|
Bruce
McMaken
|
10%
|
11