Attached files
| file | filename |
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| 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-10.06 - EDELMAN FINANCIAL GROUP INC. | v177327_ex10-06.htm |
Exhibit
10.07
SANDERS
MORRIS HARRIS GROUP INC.
2009
Supplemental Bonus Plan
This 2009
Supplemental Bonus Plan (the “Plan”) was adopted by unanimous action of the
Compensation Committee of the Board of Directors of Sanders Morris Harris Group
Inc. (the “Company”) on February 19, 2009, and by the Board of Directors of the
Company (the “Board of Directors”) on February 19, 2009. This Plan
shall be effective as of January 1, 2009.
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1.
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Statement
of Principle
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In 2003,
the Company acquired a 50% interest in Salient Partners,
L.P. (“Salient”) and a 23.15% interest in The Endowment Fund
Management, LLC and The Endowment Fund GP, L.P. (together, “Endowment Advisors”)
for an aggregate consideration of approximately $16,000,000. Between
April 2003 and September 2008, the Company received approximately $11,300,000 in
after-tax earnings attributable to Salient and Endowment Advisors.
On August
28, 2008, the Company entered into an Agreement to Retire Partnership Interest
and Second Amendment to the Limited Partnership Agreement of Endowment Advisers,
L.P. (the “EADV Agreement”) with Endowment Advisors, pursuant to
which the Company agreed to sell to Endowment Advisors and Endowment Advisors
agreed to purchase from the Company all of the partnership interest held by the
Company and Endowment Advisors agreed to distribute to the Company consideration
consisting of an aggregate amount equal to $86,000,000, plus a 6% per annum
internal rate of return (the “Redemption Consideration”). The EADV
Agreement provides that Endowment Advisors shall, to the extent funds are
available for distribution as determined by its general partner in good faith,
taking into account all facts and circumstances at the time, distribute cash to
the Company in each calendar quarter period equal to the greater of
(i) 23.15% of the aggregate cash distributions of Endowment Advisors, or
(ii) $3,000,000 (the “Minimum Quarterly Distribution”), until such time as
the Company has received the entire Redemption Consideration.
In
addition, the Company entered into a Purchase and Sale Agreement with Salient
pursuant to which the Company agreed to sell to Salient its partnership interest
in Salient for aggregate consideration of $9,349,340 (the “Salient Purchase
Price”), payable pursuant to the terms of an Unsecured Subordinated Promissory
Note dated August 29, 2008 (the “Note”), bearing interest at the
U.S. prime rate (adjusted on a quarterly basis), payable as to
principal in quarterly payments of $467,467.00 each (subject to certain setoff
amounts), payable on the 1st day of March, June, September, and December of each
year beginning December 1, 2008, and continuing until September 1, 2013, when
the entire amount of the Note, principal and interest then remaining unpaid, is
due and payable.
The
purpose of this Plan is to increase stockholder value and to advance the
interests of the Company and its subsidiaries by rewarding key executives of the
Company who personally contributed to the successful acquisition, growth
(including the establishment of The Endowment Fund), disposition of Salient and
Endowment Advisors between 2003 and 2008 and to incentivize such executives to
ensure that the Company realizes the full Redemption Consideration and the
Salient Purchase Price.
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2.
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Plan
Compensation Committee
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The
Compensation Committee (the “Committee”) of the Board of Directors is charged
with structuring, proposing the implementation of, and implementing the terms
and conditions of, the Plan. The Committee shall have the authority
to adopt, alter, and repeal such rules, guidelines, and practices governing the
Plan as it shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any agreements
relating thereto) including without limitation the manner of determining and
applying the financial and accounting concepts discussed in the Plan; to
otherwise supervise the administration of the Plan; and, except as to the
application of the Plan to executive officers, to delegate such authority
provided to it hereunder as it may deem necessary or appropriate to the Chairman
of the Board, Chief Executive Officer, President, Chief Operating Officer and
any Executive Vice President, and any of them individually. All
decisions made by the Committee pursuant to the provisions of the Plan shall be
made in the Committee’s sole discretion and shall be final and binding on all
persons, including the Company and Participants (hereinafter
defined).
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3.
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Participants
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The
participants in the Plan shall be designated by the Committee from the persons
who are employed by the Company (referred to collectively as “Participants” or
individually as a “Participant”). The initial Participants
are:
George L. Ball
Ben T. Morris
Don A. Sanders
Robert E. Garrison
II
Rick Berry
Bruce McMaken
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4.
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Method
of Operation
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(a) The
Committee shall assign to each Participant an award amount (an “Award”),
expressed as a percentage of the Bonus Pool (as hereinafter
defined). The “Bonus Pool” shall be equal to the amount of payments
actually received by the Company during a calendar quarter from the proceeds of
the Redemption Consideration and the Note multiplied by 7.5%. The
Committee may adjust the amount of the Bonus Pool if a major change occurs in
Salient’s and/or Endowment Advisors’ capital structure (e.g., an acquisition or
merger).
(b) Within
45 days following the end of each calendar quarter, each Participant’s Award for
such quarter shall be distributed to the Participant in cash in a lump sum
unless the Participant has made a Deferral Election.
(c) Except
as otherwise specifically provided herein, to be eligible to receive an 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 on December 31
of the year preceding the date Awards are distributed.
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5.
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Elected
Deferred Benefits.
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Each
Participant may make an election (a “Deferral Election”) to defer all or any
part of the Participant’s Award to be received by such Participant (“Elected
Deferred Benefits”) in accordance with the Section 5. Elected
Deferred Benefits shall be credited to the Account for each Participant on a
quarterly basis 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 Awards earned in a calendar year by filing a written election with
the Company on or before December 31 the calendar year preceding the year
in which the Participant will earn the Award to be deferred. A person
who becomes a Participant for the first time during a calendar year may make a
Deferral Election with respect to an Award attributable to the portion of such
calendar year following the delivery of such Deferral Election to the
Company. Such a Deferral Election must be made in writing and
delivered to the Company within 30 days after becoming a
Participant. Any Deferral Election made for a calendar year shall be
irrevocable.
(b) Time of Payment
Election. 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. 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 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. The amount credited to a Participant’s Account shall be
paid, or begin to be paid, on his or her Specified Payment Date or the date of
his or her Separation from Service (as hereinafter defined), in accordance with
the following:
(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, to such
Participant within 30 days after such Specified Payment Date unless the
Participant’s Separation from Service occurs prior to his or her 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
5(c)(i), shall be paid, or begin to be paid, to such Participant (or in the
event of his or her death, to his or her beneficiary or beneficiaries determined
in accordance with paragraph 7(b)) within 30 days after such Participant’s
Separation from Service. “Separation from Service” means, with
respect to a Participant, such Participant’s separation from service (within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations and other guidance promulgated thereunder) 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.
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(d) Forms
of Payment
(i) Distributions Prior to
Death. Except as provided in (ii) below, the amount
credited to a Participant’s Account shall be paid in cash in a single lump sum
on the payment date determined under paragraph 5(c) unless and to the extent a
valid written installment distribution election has been filed in accordance
with paragraph 5(e). Installment payments shall be made annually in
substantially equal installments over the installment period specified in the
installment distribution election, beginning 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. Within 30 days following the death
of a current or former Participant, the entire unpaid balance of his or her
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. Except as provided in
paragraph 5(d)(ii), 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.
(f) Vesting. Each
Participant shall be fully vested at all times in the balance of his or her
Account.
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6.
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Death
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In case
of a Participant’s death, each Award shall be delivered to such Participant’s
beneficiary or beneficiaries determined in accordance with the provisions of
paragraph 7(b).
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7.
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General
Provisions
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(a) Funding. Benefits
payable under the Plan to any person shall be paid directly by the
Company. The Company shall not fund or otherwise segregate assets to
be used for payment of benefits under the Plan. Notwithstanding the
foregoing, the Company, in its discretion, may maintain one or more trusts to
hold assets to be used for payment of benefits under the Plan; provided that the
assets of such trust shall be subject to the creditors of the Company in the
event that the Company becomes insolvent or is subject to bankruptcy or
insolvency proceedings. Any payments by such a trust of benefits
provided hereunder shall be considered payment by the Company and shall
discharge the Company of any further liability for the payments made by such
trust.
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(b) Beneficiaries. Each
Participant shall have the right to name a beneficiary or beneficiaries who
shall receive the benefits hereunder in the event of the Participant’s death
prior to the payment of his or her entire Account. If the Participant
fails to designate beneficiaries or if all such beneficiaries predecease the
Participant, benefits shall be paid to the Participant’s surviving spouse, and
if none, then to the Participant’s estate. To be effective, any
beneficiary designation shall be filed in writing 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.
(c) No Employment Arrangement
Implied/Retention Rights. The
existence of this Plan, as in effect at any time or from time to time, shall not
be deemed to constitute a contract of employment between the Company and
Participant, nor shall it constitute a right to remain in the employ of the
Company. Establishment of the Plan shall not be construed to give a
Participant the right to be employed by the Company or to any benefits not
specifically provided by the Plan.
(d) Interests Not
Transferable. Except
as to withholding of any tax required under the laws of the United States or any
state or locality and except with respect to designation of a beneficiary to
receive benefits in the event of the death of a Participant, no benefit payable
at any time under the Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, attachment, or other legal process, or encumbrance
of any kind. Any attempt by a Participant to alienate, sell,
transfer, assign, pledge or otherwise encumber any such benefits whether current
or thereafter payable, shall be void. No benefit shall, in any
manner, be liable for or subject to the debts or liabilities of any person
entitled to such benefits. If any person shall attempt to, or shall
alienate, sell, transfer, assign, pledge, or otherwise encumber his or her
benefits under the Plan, or if by any reason of his or her bankruptcy or other
event happening at any time, such benefits would devolve upon any other person
or would not be enjoyed by the person entitled thereto under the Plan, then the
Company in its discretion, may terminate the interest in any such benefits of
the person entitled thereto under the Plan and hold or apply them to or for the
benefit of such person entitled thereto under the Plan or his or her spouse,
children or other dependents, or any of them, in such manner as the Company may
deem proper.
(e) Amendment and
Termination. The
Board of Directors of the Company shall have the right and power at any time and
from time to time to amend this Plan, in whole or in part, and at any time to
terminate this Plan; provided, however, that no such amendment or termination
shall, without the written consent of the affected Participant or beneficiary of
a deceased Participant, (i) reduce the Company’s obligation for the payment of
the amounts actually credited to such Participant’s Account as of the date of
such amendment or termination, or further defer the date or dates for the
payment of such amounts, or (ii) accelerate the time for the payment of the
amounts credited to such Participant’s Account in a manner that subjects such
amounts to the tax imposed under Section 409A of the Code. Any
amendment to or termination of this Plan shall be made by or pursuant to a
resolution duly adopted by the Board of Directors of the Company, and shall be
evidenced by such resolution or by a written instrument executed by such person
as the Board of Directors of the Company shall authorize for such
purposes.
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(f) Controlling
Law. The interpretation, construction and performance of this
Plan shall be governed by and construed and enforced in accordance with the
internal laws of the state of Texas without regard to the principle of conflicts
of laws.
(g) Number. Words
in the plural shall include the singular and the singular shall include the
plural.
(h) Successors. All
obligations of the Company under the Plan shall be binding and inure to the
benefit of any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation or
otherwise.
(i) Third
Parties. Nothing express or implied in this Plan is intended
or may be construed to give any person other than a Participant any rights or
remedies under this Plan.
(j) Payment Delay for Specified
Employee. Any provision of this Plan 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,
then any payment pursuant to the provisions of this Plan that would be subject
to the tax imposed by Section 409A of the Code if paid to such Participant at
the time otherwise specified in this Plan shall be delayed and thereafter paid
on the first business day that is six months after 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 to avoid being subject to the tax imposed by Section 409A of the
Code.
(k) Compliance With Code Section
409A. The compensation payable by the Company to or with
respect to a Participant pursuant to this Plan is intended to be compensation
that is not subject to the tax imposed by Section 409A of the Code, and this
Plan shall be administered and construed to the fullest extent possible to
reflect and implement such intent.
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Participant’s
Awards
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Participant
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Percentage of Bonus Pool
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George
L. Ball
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33 | % | ||
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Ben
T. Morris
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28 | % | ||
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Don
A. Sanders
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24 | % | ||
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Robert
E. Garrison II
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5 | % | ||
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Rick
Berry
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5 | % | ||
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Bruce
McMaken
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5 | % | ||
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