Attached files
| file | filename |
|---|---|
| 10-Q - FORM 10-Q - DYNEX CAPITAL INC | body.htm |
| EX-32.1 - PEO & PFO SECTION 906 CERT - DYNEX CAPITAL INC | ex32-1.htm |
| EX-31.1 - PEO SECTION 302 CERT - DYNEX CAPITAL INC | ex31-1.htm |
| EX-31.2 - PFO SECTION 302 CERT - DYNEX CAPITAL INC | ex31-2.htm |
Exhibit 10.9
DYNEX
CAPITAL, INC.
PERFORMANCE
BONUS PROGRAM
Thomas
Akin, Chief Executive Officer, Byron Boston, Chief Investment Officer, and
Stephen Benedetti, Chief Financial Officer and Chief Operating Officer,
(collectively, the “Participants”) will be eligible for an annual performance
bonus (the “Performance Bonus”) consisting of three components as
follows:
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1.
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25%
of the Performance Bonus will be based on the annual return on adjusted
equity of the Company (the “ROAE
Component”);
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2.
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25%
of the Performance Bonus will be based on the achievement of qualitative
objectives for the calendar year as determined by the Compensation
Committee of the Board of Directors (the “Qualitative Component”);
and
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3.
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50%
of the Performance Bonus will be based on capital raising activities of
the Company for the calendar year as determined by the Compensation
Committee (the “Capital Raise
Component”).
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The
maximum Performance Bonus that may be paid to a Participant for any calendar
year is 200% of the Participant’s actual base salary paid for the calendar year;
provided, however, that if a Participant elects to receive payment of all or a
portion of the Performance Bonus in common stock of the Company (“Common
Stock”), the portion of the Performance Bonus paid in Common Stock will be
increased by 5% (without taking into account taxes or any other
deductions). Management, at its option, may also elect to compensate
certain other members of senior management of the Company in accordance with the
terms of this Performance Bonus Program. The Performance Bonus will
be calculated on a calendar year basis; provided, however, that for any calendar
year where the Payment Date (as defined below) will be December 31 of such year,
any reference herein to “calendar year” with respect to the calculation of any
“Rate” addressed below for the three components of the Performance Bonus shall
mean the period from January 1 to December 1 of such year.
Determination of the Performance Bonus
The
amount of the Performance Bonus earned for a particular calendar year will be
determined individually for each Participant and, subject to the increase of up
to 5% to the extent the Participant elects to receive payment of the Performance
Bonus in Common Stock, will be equal to the product of 200% of the Participant’s
actual base salary paid for the relevant calendar year times the sum of (x) the
product of 25% times the ROAE Reference Rate as calculated below, (y) the
product of 25% times the
Qualitative
Reference Rate as calculated below, and (z) the product of 50% times the Capital
Raise Reference Rate as calculated below.
Determination
of the ROAE Reference Rate
The ROAE
Reference Rate for a particular calendar year will be determined based on the
Company’s Return on Average Equity (“ROAE”) for the calendar
year. ROAE will be determined as the Company’s net income for the
calendar year, determined in accordance with generally accepted accounting
principles, adjusted for non-recurring and/or unusual items as determined by the
Compensation Committee in its sole discretion, and further adjusted by
increasing net income by the Company’s Performance Bonus Program expense for the
calendar year, divided by average common shareholder equity excluding unrealized
gains and losses and as adjusted for any common equity capital that is raised
until such time the capital is deployed.
The ROAE Reference Rate will then be
determined according to the table below:
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Reference
Rate
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ROAE
less than 6%
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0%
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ROAE
6% or greater and less than 8%
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25%
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ROAE
8% or greater and less than 10%
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50%
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ROAE
10% or greater and less than 12%
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75%
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ROAE
12% or greater
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100%
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Determination
of the Qualitative Reference Rate
The
Compensation Committee will establish qualitative objectives (the “Qualitative
Objectives”) for a particular calendar year within the first ninety (90) days of
such year; provided, however, that the Qualitative Objectives for calendar year
2010 will be established by the Compensation Committee prior to August 15,
2010. The Qualitative Objectives will include achievement of certain
qualitative corporate goals during the year as well as individual
goals.
Prior to
the Payment Date, the Compensation Committee in its sole discretion will
evaluate the success of the Company and each Participant with respect to the
achievement of the Qualitative Objectives during the calendar
year. In making such determination, the Compensation Committee will
consider management’s input regarding the extent to which Qualitative Objectives
were achieved.
Each
Participant’s Qualitative Reference Rate for a particular calendar year will be
determined by the Compensation Committee based on its determination of the
success of the Company and the Participant relative to the Qualitative
Objectives and will be expressed as a percentage from 0%-100%.
Determination
of the Capital Raise Reference Rate
The
Compensation Committee acknowledges that the issuance of equity capital is an
important objective for the Company. The Compensation Committee
desires to provide incentives to management to issue equity capital in a
beneficial manner to the
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Company
and its shareholders and has therefore established the Capital Raise Component
of the Performance Bonus Program.
The
Capital Raise Component will be administered by the Compensation Committee in
its sole discretion. The Compensation Committee will annually
review the capital raising activities of the Company for the calendar year and
will determine the success of such efforts relative to factors including, but
not limited to, the amount of capital raised, the use of capital raised, the mix
of common versus preferred capital, the issue price relative to book value and
market price at the time of issuance, and the cost of capital raising
activities.
Prior to
the Payment Date, the Compensation Committee will evaluate the success of the
Company and each Participant’s efforts with respect to capital raising efforts
for the calendar year. The Capital Raise Reference Rate will be
determined by the Compensation Committee in its sole discretion based on its
determination of the success of the Company and each Participant with respect to
capital raising efforts for the calendar year and will be expressed as a
percentage from 0%-100%.
Payment
of the Performance Bonus
Except
when the Compensation Committee determines to pay the Performance Bonus for a
particular calendar year on December 31 of such year, amounts due to the
Participants for the Performance Bonus for any calendar year will be paid
concurrently with the filing of the Company’s Annual Report on Form 10-K for
that year or March 15 of the calendar year following the performance period,
whichever is earlier (the “Payment Date”). In no event will the
Payment Date be later than March 15 of the calendar year following the
performance period.
Amounts
due to the Participants for the Performance Bonus for any calendar year will be
paid, at the election of the Participant, in cash, in Common Stock, or in a
combination of cash and Common Stock. To the extent the Participant
chooses to receive payment of all or a portion of the Performance Bonus in
Common Stock, the amount paid in Common Stock will be increased by 5% (without
taking into account taxes or any other deductions).
Any
Common Stock granted as payment of all or any portion of the Performance Bonus
due to a Participant will be granted under and pursuant to the terms of the
Company’s 2009 Stock and Incentive Plan (the “2009 Plan”). Such
Common Stock will be determined using the Fair Market Value (as defined in the
2009 Plan) of the Common Stock on the Payment Date.
Approved
by the Compensation Committee of the Board on August 5, 2010.
Approved
by the Board of Directors on August 5, 2010.
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