UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
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Statement Pursuant to Section 14(a) of
the
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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BIMINI
CAPITAL MANAGEMENT, INC.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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3305
Flamingo Drive, Vero Beach, Florida, 32963
April 30,
2010
Dear
Stockholder,
You are cordially invited to attend the
2010 Annual Meeting of Stockholders of Bimini Capital Management, Inc. to be
held at 8:00 a.m., local time, on June 15, 2010, at the office of Bimini Capital
Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963. We
look forward to greeting personally those stockholders that will be able to
attend.
The following pages include a formal
Notice of Annual Meeting of Stockholders and the Proxy Statement describing the
matters expected to be acted upon at the meeting. We urge you to
review these materials carefully and to take part in the affairs of the company
by voting on the matters described in the Proxy Statement.
Your vote is
important. Whether you plan to attend the meeting in person or not,
we hope you will grant a proxy to vote your shares as soon as
possible. Instructions for voting your shares are on the enclosed
proxy card or vote instruction form. This will ensure representation
of your shares if you are unable to attend. If you attend the
meeting, you may continue to have your shares voted as instructed in the proxy
or you may withdraw your proxy at the meeting and vote your shares in
person.
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Sincerely,
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/s/
Robert E. Cauley
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Robert
E. Cauley
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Chairman
of the Board and Chief Executive
Officer
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BIMINI
CAPITAL MANAGEMENT, INC.
3305
Flamingo Drive
Vero
Beach, Florida 32963
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON JUNE 15, 2010
To Our
Stockholders:
We will hold the 2010 Annual Meeting of
Stockholders (the “Annual Meeting”) of Bimini Capital Management, Inc., a
Maryland corporation (the “Company”), at the office of Bimini Capital
Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963, on Tuesday,
June 15, 2010, at 8:00 a.m., local time, for the following
purposes:
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1.
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To
elect one Class I director to serve until the 2013 Annual Meeting of
Stockholders and until his successor is duly elected and
qualified;
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2.
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To
consider and act upon a proposal to approve a 2010 Long Term Incentive
Compensation Plan;
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3.
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To
ratify the selection of BDO Seidman, LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2010;
and
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4.
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To
consider and vote upon such other business as may properly come before the
Annual Meeting or any adjournments or postponements
thereof.
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The Board of Directors has fixed the
close of business on April 30, 2010, as the record date for the Annual Meeting.
Only holders of record of the Company’s Class A Common Stock and Class B Common
Stock as of that date are entitled to notice of, and to vote at, the Annual
Meeting and any adjournment or postponement thereof. A list of
stockholders entitled to vote at the Annual Meeting will be available at the
Annual Meeting.
Admission to the Annual Meeting will be
by admission ticket only. If you are a stockholder of record and plan
to attend, tear off the admission ticket from the top half of your proxy card
and bring it and a photo ID with you so that you may gain admission to the
meeting.
If your shares are held through a
broker, please contact your broker and request that the broker obtain an
admission ticket for you or provide you with evidence of your share ownership,
which will gain you admission to the Annual Meeting.
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By
Order of the Board of Directors,
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/s/
Robert E. Cauley
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Robert
E. Cauley
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Chairman
of the Board and CEO
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Vero
Beach, Florida
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April
30, 2010
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BIMINI
CAPITAL MANAGEMENT, INC.
3305
Flamingo Drive
Vero
Beach, Florida 32963
(772)
231-1400
PROXY
STATEMENT
FOR
2010 ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON JUNE 15, 2010
This
Proxy Statement is being furnished to the holders of Class A Common Stock and
Class B Common Stock of Bimini Capital Management, Inc., a Maryland corporation
(the “Company”), in connection with the solicitation by the Company’s Board of
Directors of proxies to be voted at the 2010 Annual Meeting of Stockholders of
the Company (the “Annual Meeting”) to be held at the office of Bimini Capital
Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963, on Tuesday,
June 15, 2010, at 8:00 a.m., local time, or at any postponement or adjournment
of the meeting, for the purposes set forth in the accompanying Notice of Annual
Meeting.
This
Proxy Statement and the enclosed proxy card or vote instruction form are being
mailed to stockholders on or about May 14, 2010. If the enclosed
proxy card or vote instruction form is executed and returned, it nevertheless
may be revoked by the stockholder at any time prior to its use by filing with
the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date or by submitting revised instructions to us by telephone or
via the Internet, in accordance with the instructions on the enclosed proxy card
or vote instruction form, as to how you would like your shares
voted. A stockholder who attends the Annual Meeting in person may
revoke his or her proxy at that time and vote in person if so
desired.
Admission
to the Annual Meeting will be by admission ticket only. If you are a
stockholder of record and plan to attend, tear off the admission ticket from the
top half of your proxy card and bring it and a photo ID with you so that you may
gain admission to the meeting. If your shares are held through a
broker, please contact your broker and request that the broker obtain an
admission ticket for you or provide you with evidence of your share ownership,
which will gain you admission to the Annual Meeting.
Unless
revoked or unless contrary instructions are given, each proxy that is properly
signed, dated and returned or authorized by telephone or Internet in accordance
with the instructions on the enclosed proxy card or vote instruction form prior
to the start of the Annual Meeting, will be voted as indicated on the proxy card
or via telephone or the Internet and if no indication is made, each such proxy
will be deemed to grant authority to vote, as applicable:
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Proposal 1: FOR the election of the Class I
director nominee to serve until the 2013 Annual Meeting of Stockholders
and until his successor is duly elected and qualified (the “Class I
Director Election Proposal”);
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Proposal
2: FOR
the approval of the 2010 Long Term Incentive Compensation
Plan;
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Proposal 3: FOR the ratification of BDO Seidman,
LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2010 (the “Auditor Proposal”);
and
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At
the discretion of the persons named in the enclosed Proxy Card, on any
other matter that may properly come before the Annual Meeting or any
adjournment or postponement of the
meeting.
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THE
BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE
ELECTION OF THE NOMINEE LISTED UNDER THE CLASS I DIRECTOR ELECTION PROPOSAL,
“FOR” THE APPROVAL OF THE 2010 LONG TERM INCENTIVE COMPENSATION PLAN AND “FOR”
THE AUDITOR PROPOSAL.
TABLE
OF CONTENTS
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Page
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Frequently Asked
Questions
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2
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Matters to be Considered at the
Annual Meeting
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7
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Corporate Governance
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15
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Audit Committee
Report
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20
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Compensation of
Directors
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21
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Compensation of Executive
Officers
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23
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Potential Payouts Upon
Termination or a Change of Control
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25
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Other Information
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27
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[Missing Graphic Reference]
FREQUENTLY
ASKED QUESTIONS
Unless
otherwise indicated, all information in this Proxy Statement has been adjusted
to give effect to a one-for-ten reverse split of the Company’s Class A and Class
B Common Stock effective as of March 12, 2010. As a result of the
stock split, every ten shares of issued and outstanding Class A and Class B
Common Stock became one share of issued and outstanding Class A and Class B
Common Stock, respectively.
When
and where is the Annual Meeting?
The
Annual Meeting will be held at the office of Bimini Capital Management, Inc.,
3305 Flamingo Drive, Vero Beach, Florida 32963, on Tuesday, June 15, 2010, at
8:00 a.m., local time.
Why
am I receiving these proxy materials?
You are
receiving these proxy materials in connection with the solicitation by our Board
of Directors of proxies to be voted at the 2010 Annual Meeting of
Stockholders.
If your
shares were registered directly in your name with our transfer agent,
Continental Stock Transfer & Trust Company, as of the close of business on
April 30, 2010, you are considered a stockholder of record, and we have sent you
this Notice of Annual Meeting and Proxy Statement, together with the enclosed
proxy card and our 2009 Annual Report.
If your
shares were held in the name of a bank, brokerage account or other nominee as of
the close of business on April 30, 2010, you are considered a beneficial owner
of the shares held in street name. Your bank, broker or other nominee has sent
you this Notice of Annual Meeting and Proxy Statement, together with the
enclosed vote instruction form and our 2009 Annual Report.
You have
the right to direct your bank, broker or other nominee on how to vote your
shares by completing and returning the vote instruction form or by instructing
your bank, broker or other nominee by following the telephone or Internet voting
instructions provided.
What
am I voting on?
You are
voting on the three proposals summarized below. Further details of
each proposal are included in the next section entitled “Matters to Be
Considered at the Annual Meeting.”
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§
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Proposal
1: To elect one Class I director (nominee Frank E. Jaumot) to
serve until the 2013 Annual Meeting of Stockholders and until his
successor is duly elected and
qualified;
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§
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Proposal
2: To approve the 2010 Long Term Incentive
Compensation Plan; and
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§
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Proposal
3: To ratify the selection of BDO Seidman, LLP as our
independent registered public accounting firm for the year ending December
31, 2010.
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What
are the recommendations of the Board of Directors on how I should vote my
shares?
The Board
recommends that you vote your shares as follows:
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§
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Proposal
1: FOR
the election of the Class I director nominee to serve until the 2013
Annual Meeting of Stockholders and until his successor is duly elected and
qualified;
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§
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Proposal
2: FOR approval of the 2010
Long Term
Incentive Compensation Plan;
and
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§
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Proposal 3: FOR the ratification of BDO Seidman,
LLP as our independent registered public accounting firm for the year
ending December 31, 2010.
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What
are my choices when voting?
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§
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Proposal
1: You may cast your vote in favor of the election of the Class I director
nominee or you may elect to abstain from voting your
shares.
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§
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Proposal
2: You may cast your vote for or against approval of the
2010 Long Term
Incentive Compensation Plan or you may elect to abstain from voting
your shares.
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§
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Proposal
3: You may cast your vote in favor of the ratification of BDO
Seidman, LLP or you may elect to abstain from voting your
shares.
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How
will my shares be voted if I do not specify how they should be
voted?
The Board
of Directors is asking for your proxy. Giving your proxy means that you
authorize us to vote your shares at the meeting in the manner you direct. If you
sign and return the enclosed proxy card, but do not specify how to vote, your
shares will be voted as follows:
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§
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Proposal
1: FOR the
election of the Class I director nominee to serve until the 2013 Annual
Meeting of Stockholders and until his successor is duly elected and
qualified;
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§
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Proposal
2: FOR
approval of the 2010 Long Term Incentive
Compensation Plan; and
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§
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Proposal 3: FOR the ratification of BDO Seidman,
LLP as our independent registered public accounting firm for the year
ending December 31, 2010.
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How
do I vote?
You may
grant a proxy to vote your shares by any one of the following
methods:
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By
mail: Mark your votes, sign and return the proxy card or vote instruction
form in the postage paid envelope
provided.
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By
Internet: Log onto the website indicated on your proxy card or vote
instruction form and follow the instructions
provided.
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By
telephone: Call the toll-free number shown on your proxy card or vote
instruction form and follow the voice
prompts.
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Alternatively,
you may attend the Annual Meeting in person and use a ballot to cast your
vote. If you grant a proxy by the Internet or by telephone to vote
your shares, you do not need to send in the proxy card or vote instruction
form. The deadline for Internet and telephone proxy authorization
will be 11:59 PM, Eastern Time, on Thursday, June 10, 2010. If your
shares are held in the name of a bank, broker or other nominee, and you wish to
vote your shares at the Annual Meeting, you will need to contact your bank,
broker or other nominee to obtain a legal proxy form that you must bring with
you to the meeting to exchange for a ballot.
What
vote is needed for the proposals to be adopted?
As of the
close of business on the record date, April 30, 2010, there were 10,035,654
shares of the Company’s Class A Common Stock and 31,938 shares of the Company’s
Class B Common Stock issued and outstanding, representing the only classes of
voting stock of the Company issued and outstanding as of such
date. Each holder of Class A Common Stock and each holder of Class B
Common Stock is entitled to cast one vote per share of Class A Common Stock or
Class B Common Stock held on each matter that properly comes before the Annual
Meeting. Holders of shares of Class A Common Stock and Class B Common
Stock vote together as one class in all matters, except that matters that would
adversely affect the rights and preferences of only one class must be separately
approved by the holders of the adversely affected class.
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Quorum: In
order to conduct the Annual Meeting, the presence, in person or by proxy,
of stockholders entitled to cast a majority of all the votes entitled to
be cast at the Annual Meeting is required. This is referred to
as a quorum. If you submit a properly executed proxy card or
authorize a proxy by telephone or by Internet, you will be treated as
present at the Annual Meeting for purposes of determining the presence of
a quorum. Proxy cards marked as abstaining and broker non-votes
on any proposal to be acted on by stockholders will be treated as present
at the Annual Meeting for purposes of determining the presence of a
quorum.
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§
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Proposals: The
vote of a plurality of all of the votes cast at a meeting at which a
quorum is present is necessary for the election of
directors. For purposes of the election of directors,
abstentions will not be counted as votes cast and will have no effect on
the result of the vote. The affirmative vote of a
majority of all of the votes cast at a meeting at which a quorum is
present is required to approve the 2010 Long Term Incentive
Compensation Plan and to ratify the appointment of BDO Seidman,
LLP. For purposes of the vote on each of these two proposals,
abstentions and broker non-votes will have the same effect as votes
against the proposal.
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Who
will count and certify the votes?
Representatives
of Broadridge Financial Solutions, Inc. and the inspector of elections
(our controller) will count the votes and certify the election
results. The results will be published in a current report on Form
8-K to be filed after the Annual Meeting.
What
does it mean if I receive more than one proxy card?
It means
you have multiple accounts registered with our transfer agent or with stock
brokers or other nominees. Please complete and provide your voting
instructions for all proxy cards and vote instruction forms that you
receive.
Will
my shares be voted if I do not sign and return my proxy card?
Possibly.
If your shares are held in street name and you do not instruct your broker or
other nominee how to vote your shares, your broker or nominee may either use its
discretion to vote your shares on “routine matters” including each of the
proposals at this meeting or leave your shares unvoted. For any
“non-routine matters” considered at the meeting, your broker or other nominee
would not be able to vote on such matters. We encourage you to
provide instructions to your nominee by completing the vote instruction form or
proxy card that you have received. This will ensure that your shares
are voted at the Annual Meeting as you direct.
How
can I change my vote?
You have
the right to revoke your proxy at any time before the Annual
Meeting. If you are a holder of record, you may contact our corporate
secretary and request that another proxy card be sent to you. Alternatively, you
may use the Internet or the telephone to authorize a new proxy and revoke your
old proxy, even if you previously mailed in a proxy card. The
latest-dated, properly completed proxy that you submit, whether through the
Internet, by telephone or by mail will count as your vote. Please
note that if you submit a later proxy authorization by mail, your
re-authorization will not be effective unless it is received by our corporate
secretary prior to the start of the Annual Meeting. If your shares
are held in street name, you must contact your bank, broker or other nominee and
follow their procedures for changing your vote instructions.
How
can I attend the Annual Meeting?
Admission
to the Annual Meeting is limited to stockholders who are entitled to vote or
their authorized representatives. If you are a holder of record and
wish to attend the Annual Meeting, tear off the Admission Ticket attached to the
top half of your proxy card and bring it and a photo ID with you to gain
admission to the meeting.
If your
shares are held in the name of a bank, broker or other nominee, and you wish to
attend the Annual Meeting, you must bring other proof of ownership, such as an
account statement, that clearly shows that you held Bimini Capital Management,
Inc. common stock on the record date, or a legal proxy obtained from your bank,
broker or other nominee. You must also bring a photo
ID. Alternatively, you may obtain an admission ticket by sending your
request and a copy of your proof of ownership to our corporate secretary at
Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963
provided that your request is received by the Company by Thursday, June 10,
2010.
No
cameras, recording equipment, cell phones, electronic devices, large bags,
backpacks, briefcases or packages will be permitted in the meeting room or
adjacent areas. All items will be subject to search.
Can
I view or receive these materials electronically?
This
Proxy Statement and our 2009 Annual Report are available online at
www.biminicapital.com. From the home page, select the “SEC Filings”
tab to view or download the materials.
If you
hold your shares in street name, you must contact your bank, broker or other
nominee to consent to electronic delivery. By choosing to access your
proxy materials electronically in the future, you will save the company the cost
of printing and mailing these documents to you and help conserve natural
resources.
How
do I obtain a copy of materials related to corporate governance?
Our
Corporate Governance Guidelines, the charters of each standing committee of our
Board of Directors, our Code of Business Conduct and Ethics, our Code of Ethics
for Senior Financial Officers and other materials related to our corporate
governance are published on the Corporate Governance section of our website at
www.biminicapital.com. In addition, this information is available in
print to any stockholder who requests it by contacting our corporate secretary
at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida
32963.
Who
are the proxy solicitors and what are the solicitation expenses?
Our Board
of Directors is asking for your proxy and we will pay all of the costs of asking
for stockholder proxies. We can ask for proxies through the mail or
personally by telephone or the Internet. We may use directors,
officers and regular employees of the Company to ask for
proxies. These people do not receive additional compensation for
these services. We will reimburse brokerage firms and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses
for forwarding solicitation material to the beneficial owners of the Company’s
common stock held of record by them. Broadridge Financial Solutions,
Inc. assists us with certain administrative functions related to the
distribution of the proxy, but is not acting as a solicitor.
How
can I submit a proposal for consideration at the 2011 Annual
Meeting?
To be
considered for the 2011 Annual Meeting of Stockholders, stockholder proposals
must be submitted in writing to our corporate secretary at Bimini Capital
Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963. No
proposal can be included in our proxy statement for the 2011 Annual Meeting of
Stockholders unless it is received by our corporate secretary no later than
December 31, 2010 (120 days prior to April 30. The proposal must also
meet the other requirements of the rules of the Securities and Exchange
Commission relating to stockholder
proposals.
Any
stockholder whose proposal is not included in our proxy statement relating to
the 2011 Annual Meeting of Stockholders and who intends to present a matter for
consideration at such meeting must give notice to our corporate secretary in
accordance with Section 1.11 of our Amended and Restated Bylaws and such matter
must otherwise be a proper matter for stockholder action. For our
2011 Annual Meeting of Stockholders, any such notice must be received by our
corporate secretary no later than April 15, 2011, and no earlier than March 16,
2011.
How
can I recommend someone as a candidate for director?
A
stockholder who wishes to recommend a candidate for director of the Company may
write to Chair, Corporate Governance and Nominating Committee of the Board of
Directors, c/o Corporate Secretary, Bimini Capital Management, Inc., 3305
Flamingo Drive, Vero Beach, Florida 32963.
To be
effective for consideration at the 2011 Annual Meeting of Stockholders, the
recommendation must be received by our corporate secretary no later than April
15, 2011, and no earlier than March 16, 2011 and must include information about
the nominating stockholder and the nominee that is required to be included in a
proxy statement under the rules of the Securities and Exchange
Commission.
MATTERS
TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL
1: TO ELECT ONE CLASS I DIRECTOR TO SERVE UNTIL
THE
2013 ANNUAL MEETING OF STOCKHOLDERS AND
UNTIL
HIS SUCCESSOR IS DULY ELECTED AND QUALIFIED.
One
director is nominated for election as a Class I director to serve until the 2013
Annual Meeting of Stockholders and until his successor has been duly elected and
qualified, or until his earlier retirement, death or resignation. It
is intended that the shares represented by each proxy for which no voting
instructions have been given will be voted for the nominee for director set
forth below who is an incumbent director, or for any substitute nominee
designated by our Board of Directors in the event the nominee becomes
unavailable for election. The principal occupation of, and certain
other information regarding, the Class I director nominee and our continuing
directors, as of April 30, 2010, is set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR
THE
ELECTION OF THE CLASS I DIRECTOR NOMINEE.
_____________________
Class
I Director Nominee — Term Expires in 2013
_____________________
FRANK E. JAUMOT, 53, has been a director of
the Company since April 24, 2009. He has been the Director of
Accounting and Auditing for the certified public accounting firm of Ahearn,
Jasco & Company, P.A. since 1991, and is a shareholder in that firm. From
1979 to 1991, Mr. Jaumot was associated with Deloitte & Touche LLP.
Mr. Jaumot is a certified public accountant in Florida and Ohio and is a
member of the American Institute of Certified Public Accountants and the Florida
Institute of Certified Public Accountants. He is also a member of the
Board of Directors of MasTec, Inc. and PPOA Holding, Inc, and serves on the
audit committees and the compensation committees for both. Mr. Jaumot is
also on the Board of Directors for Junior Achievement of South Florida, Inc., a
not-for-profit entity.
_____________________
Continuing
Class II Director — Term Expires in 2011
_____________________
ROBERT E. CAULEY, 51, has
been a director of the Company since its inception in 2003. He is
currently Chairman of the Board and Chief Executive Officer of the Company and
is one of the Company’s founders. Prior to co-founding the Company,
he was Vice President, Portfolio Manager at Federated Investment Management
Company in Pittsburgh, Pennsylvania, where, from 1996 until September 2003, he
served as a lead portfolio manager, co-manager, or assistant portfolio manager
of $4.25 billion (base capital, unlevered amount) in mortgage and asset backed
securities funds. From 1994 to 1996, he was an associate at Lehman
Brothers in the asset-backed structuring group. From 1992 to 1994, he
was a credit analyst in the highly levered firms group and the aerospace group
at Barclay’s Bank. Mr. Cauley has invested in, researched, or
structured almost every type of mortgage-backed security. Mr. Cauley,
who is a CFA and a CPA, received his MBA in finance and economics from Carnegie
Mellon University and his BA in accounting from California State University,
Fullerton. Mr. Cauley served in the United States Marine Corps for
four years.
_____________________
Class III Director — Term Expires in
2012
_____________________
ROBERT J. DWYER,
65, has been a director of the Company
since June 2007. He retired from Morgan Stanley Dean Witter in 1999
as Executive Vice President-National Sales Director, having served in that role
from 1990 until his retirement. Prior to that, Mr. Dwyer was Director of Taxable
Fixed Income for Morgan Stanley Dean Witter. He currently serves on
the Board of Directors of the Bank of New York Ivy Multi-Strategy Hedge
Funds.
Mr. Dwyer
has numerous charitable and civic interests. He currently serves as
Chairman of the Board of Trustees for Niagara University and is on the
investment committee for the Vincentian Order. He also is Chairman of
the Dwyer Family Foundation, which supports a number of health and social
programs. Mr. Dwyer has also served as a member of the Board of
Directors of MasTec, Inc. since October 2004.
_____________________
PROPOSAL
2: TO APPROVE THE BIMINI CAPITAL MANAGEMENT, INC.
2010
LONG TERM INCENTIVE COMPENSATION PLAN.
Since
2004, the Company has had two incentive and bonus plans, the Bimini Capital
Management, Inc. 2003 Long Term Incentive Compensation Plan (the “2003 Plan”)
and the 2004 Bonus Compensation Plan (the “Bonus Plan”). The purpose
of these plans is to attract key employees, directors and consultants to the
Company, induce key employees, directors and consultants to continue employment
with, or service to, the Company, and to provide incentives to make the
Company’s business more successful.
The Board
of Directors believes the 2003 Plan has been effective in accomplishing its
objectives. The 2003 Plan is scheduled to expire in 2014, and as of
April 15, 2010, there were approximately 448,647 shares available for grant
under the 2003 Plan (but subject to the 2003 Plan limitation that the total
grants cannot exceed 10% of the total outstanding shares). The
Company is therefore proposing the adoption of a new plan, the Bimini Capital
Management, Inc. 2010 Long Term Incentive Compensation Plan (the “2010
Plan”). The 2010 Plan is a long term incentive compensation plan
containing terms that are similar to those in the 2003 Plan. If the
2010 Plan is approved by stockholders, then no new awards will be
granted under the 2003 Plan. If stockholders do not
approve the 2010 Plan, then the 2003 plan will remain in effect and the 2010
plan will not be implemented.
No awards
have been made under the Bonus Plan in recent years and the Board of Directors
believes that the Bonus Plan has not been effective in accomplishing its
objectives. As a result, on April 1, 2010 the Board of Directors
terminated the Bonus Plan. At this time the Company does not intend
to replace the Bonus Plan.
The
proposed 2010 Plan is attached as Exhibit A to this proxy statement. The more
significant features of the 2010 Plan are summarized below. This
summary is qualified in its entirety by reference to the full text of the 2010
Plan. To the extent there is a conflict between this summary and the 2010 Plan,
the 2010 Plan shall govern. Capitalized terms not defined herein are used as
defined in the 2010 Plan.
General
The
Company is the sponsor of the 2010 Plan. The 2010 Plan is not subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended.
Purpose
The
purpose of the 2010 Plan is to attract key employees, directors and consultants
to the Company and its subsidiaries and to induce key employees, directors and
consultants to continue employment with, or service to, the Company and its
subsidiaries, and to provide incentives to make the Company’s business more
successful, whether directly or through its subsidiaries. In furtherance of
those objectives, the 2010 Plan is designed to provide equity-based incentives
to certain key employees, directors and consultants. Awards under the 2010 Plan
may be made to key employees, directors and consultants in the form of Options,
Restricted Stock, Phantom Shares, Dividend Equivalent Rights or Other
Stock-Based Awards. The Company will consider awards pursuant to the 2010 Plan
in light of its overall compensation philosophy and competitive conditions in
the marketplace.
Duration
Awards
may be granted under the 2010 Plan until the day before the 10th anniversary of
the date on which it was adopted by the Board of Directors of the Company.
However, the 2010 Plan may be terminated at any time prior to that date by the
Board of Directors of the Company.
Administration
The 2010
Plan will be administered by the Compensation Committee of the Board of
Directors (the “Committee”), which consists of two or more non-employee
directors, each of whom is intended to be a non-employee director under Rule
16b-3 and an outside director under Section 162(m) of the Internal Revenue Code
(the “Code”). If and to the extent applicable, no member of the
Committee may act as to matters under the 2010 Plan specifically relating to
such member. If no Committee exists, the functions of the Committee will be
exercised by the Company’s Board of Directors.
The
Committee has the full authority to administer and interpret the 2010 Plan, to
authorize the grant of awards, to determine the eligibility of key employees,
directors or consultants to receive an award, and to determine the number of
shares of Class A Common Stock to be covered by each award. The award agreement
will contain other terms, provisions and conditions not inconsistent with the
2010 Plan, as determined by the Committee. The Committee may (subject to such
considerations as may arise under Section 16 of the Exchange Act, or under other
corporate, securities or tax laws) take any steps it deems appropriate, that are
not inconsistent with the purposes and intent of the 2010 Plan, to establish
performance-based criteria applicable to awards otherwise permitted to be
granted under the 2010 Plan, and to take into account the provisions of Section
162(m) of the Code.
Eligibility
and Types of Awards
Key
employees, directors, officers and consultants of the Company and its
subsidiaries are eligible to be granted Options, Restricted Stock, Phantom
Shares, Dividend Equivalent Rights and Other Stock-Based Awards under the 2010
Plan. Eligibility for awards under the 2010 Plan is generally determined by the
Committee.
Available
Shares
Subject
to adjustment upon certain corporate transactions or events, the total aggregate
number of shares of the Company’s Class A Common Stock that may be issued
pursuant to Awards granted under the 2010 Plan is 1,500,000
shares. In addition, subject to adjustment upon certain corporate
transactions or events, a participant may not receive awards for more than
750,000 shares of the Company’s Class A Common Stock during the term of the 2010
Plan. In the event an option or other award granted under the 2010
Plan is forfeited or otherwise expires or terminates, the shares subject to any
portion of such award will again become available for the issuance of additional
awards. Shares of the Company’s Class A Common Stock distributed
under the 2010 Plan may be authorized but previously unissued shares or treasury
shares. The Committee intends that no awards will be granted under the 2010 Plan
to any person who, assuming exercise of all options and payment of all awards
held by such person, would own or be deemed to own more than 9.8% of the
outstanding Class A Common Stock of the Company.
Stock
Options
The 2010 Plan authorizes
the grant of both incentive stock options under Section 422 of the Code
“Incentive Stock Options”) and options that are not subject to Section 422 of
the Code. The primary difference between the two types of options is
that Incentive Stock Options may provide federal income tax advantages to the
option holder. See “Certain U.S. Federal
Income Tax Consequences” below. Other than as specifically set
forth under the terms of the 2010 Plan, the terms of each option, including
whether the option shall constitute an Incentive Stock Option, shall be
determined by the Committee. Options granted under the 2010 Plan will be
evidenced by award agreements containing provisions consistent with the terms of
the 2010 Plan. The award agreement may specify the extent to which, and the
period during which, an option may be exercised after termination of employment.
Generally, an option cannot be exercised more than three months after a
termination of employment (or other service) or more than one year after a
termination on account of death, disability or retirement and then only to the
extent it was exercisable at the time of termination.
The
exercise price of an option shall be determined by the Committee and reflected
in the applicable award agreement. The exercise price with respect to Options
may not be lower than 100% of the shares’ fair market value on the date of
grant, or 110% of the shares’ fair market value on the date of grant in the case
of an Incentive Stock Option granted to an individual who owns, or is deemed to
own, more than 10% of the total value of outstanding Company
stock. The aggregate fair market value (determined as of the date the
option is granted) of the shares for which any Incentive Stock Options may first
become exercisable during any calendar year (under the 2010 Plan or any other
stock option plan required to be taken into account under Section 422(d) of the
Code) may not exceed $100,000.
The term
of each option will be specified in the award agreement, but the term cannot
exceed 10 years from the date of grant (or five years in the case of an
Incentive Stock Option granted to a 10% stockholder of the Company). The
Committee shall determine the time or times at which an option may be exercised
in whole or in part. Unless otherwise determined by the Committee at the time of
grant, options will vest ratably in annual installments over a five-year period
beginning on the date of grant. The Committee also shall determine the manner in
which the option price may be paid (including, without limitation, by cash,
loans or third-party sale programs, or by the tender of previously-owned
shares).
Options
granted under the 2010 Plan will not be transferable except by will or the laws
of descent and distribution; provided, however, that the Committee may permit
other transfers, where the Committee concludes that such transferability (i)
does not result in accelerated U.S. federal income taxation, (ii) does not cause
any option intended to be an Incentive Stock Option to fail to qualify as such,
and (iii) is otherwise appropriate and desirable.
Restricted
Stock
Restricted
Stock is an award of common stock that is subject to restrictions (including,
without limitation, limitations on transferability, the right to vote a share of
restricted stock or the right to receive any dividend or other right or
property) as the Committee shall determine. The restrictions may require the
participant to complete a specified period of employment or service and may
require the Company or a subsidiary to achieve goals or objectives based on one
or more of the performance measures described below. Restrictions on
the shares shall lapse in accordance with the terms of the applicable award
agreement, as determined by the Committee. Unless otherwise provided
in the applicable award agreement, upon a termination of employment or other
service for cause or by the grantee for any reason, all shares of Restricted
Stock still subject to restrictions shall be forfeited to the Company. Unless
otherwise provided in the applicable award agreement, upon a termination of
employment or other service on account of death, disability or retirement, or if
the grantee has a termination of service by the Company for any reason other
than cause, during the restriction period, then restrictions under the 2010 Plan
will immediately lapse on all Restricted Stock held by the grantee.
Unless
otherwise determined by the Committee, a participant’s title to Restricted Stock
will be evidenced by a stock certificate, which will be held in custody by the
Company until the restrictions have lapsed. Each participant must
deliver to the Company an executed stock power, endorsed in blank, relating to
the stock subject to the award. If and when the restrictions lapse, the stock
certificates will be delivered by the Company to the participant or his
designee.
Subject
to the other terms of the 2010 Plan, the Committee may provide a specified
purchase price for the Restricted Stock, determine the restrictions applicable
to Restricted Stock and determine or impose other conditions to the grant of
Restricted Stock under the 2010 Plan as it may deem appropriate.
Phantom
Shares
A Phantom
Share represents the right to receive the fair market value of a share of the
Company’s common stock or, if provided by the Committee, the right to receive
the fair market value of a share of the Company’s common stock on the vesting
date in excess of a base value established by the Committee at the time of grant
(which cannot be less than the fair market value of a share on the date of
grant). Subject to the terms of the 2010 Plan, the Committee shall,
in its discretion as reflected by the terms of the applicable award agreement,
authorize the grant of Phantom Shares to key employees, directors and
consultants and determine or impose other conditions to the grant of Phantom
Shares under the 2010 Plan, as it may deem appropriate. Phantom Shares will vest
as provided in the applicable award agreement and the vesting requirements may
require the participant to complete a specified period of employment or service
and may require the Company or a subsidiary to achieve goals or objectives based
on one or more of the performance measures described below. Unless otherwise
determined by the Committee at the time of the grant, Phantom Shares will be
settled by the issuance of shares of common stock. Phantom Shares are settled
with a single-sum payment after the Phantom Shares vest in accordance with the
award agreement. Rights to payments with respect to Phantom Shares are generally
not subject to alienation, transfer, assignment, pledge or
garnishment.
Dividend
Equivalent Right
A
Dividend Equivalent Right award entitles the recipient, subject to the terms
prescribed by the Committee (which may include completing a specified period of
employment or service or the attainment of goals and objectives based on one or
more of the performance measures described below) to receive (or have credited)
the equivalent value (in cash or shares of common stock) of dividends declared
on a specified number of shares of common stock. The Committee may provide that
amounts payable with respect to Dividend Equivalent Rights shall be converted
into cash or additional shares of the Company’s common stock. The Committee will
establish all other limitations and conditions of awards of dividend
equivalents.
Other
Stock-Based Awards
The 2010
Plan authorizes the grant of Other Stock-Based Awards, i.e., other types of awards
based upon the common stock of the Company, securities convertible into the
Company’s common stock and stock appreciation rights. Other
Stock-Based Awards will be subject to terms and conditions established by the
Committee.
Section
162(m) of the Code; Performance Measures
Section
162(m) of the Code provides that the Company generally cannot claim a federal
income tax deduction of more than $1 million on account of compensation paid to
each of its Chief Executive Officer or three other most highly compensated
officers (other than the Company’s Chief Financial
Officer). Compensation that qualifies as “performance based
compensation” under Section 162(m) of the Code is deductible without regard to
this limitation.
The 2010
Plan is designed so that Options and certain Phantom Share awards, i.e., Phantom Share awards in
which the benefit is limited to appreciation in the common stock after the date
of grant, can qualify as performance based compensation under Section
162(m). The 2010 Plan is also designed so that other Phantom Share
awards, Restricted Stock and Other Stock-based Awards can qualify as
performance-based compensation under Section 162(m). Those Phantom
Share awards, Restricted Stock and Other Stock-Based Awards can satisfy Section
162(m) if the vesting or payment under the award is conditioned upon meeting
goals or objectives based on performance measures authorized under the 2010
Plan.
The
performance measures authorized under the 2010 Plan, which may relate to the
Company or a subsidiary, are: (i) return on equity, (ii) total
earnings, (iii) earnings growth, (iv) return on capital (treating the Company’s
trust preferred debt as capital), (v) return on capital employed, (vi) the fair
market value of the Company’s common stock, (vii) appreciation in the fair
market value of the Company’s common stock, (viii) capital raised in the sale of
common equity of the Company or a subsidiary, (ix) net interest margin, (x)
comparison of common stock performance with market indices or peer groups, (xi)
earnings per share, (xii) dividends per share, (xiii) income from continuing
operations or core earnings, i.e., net interest income
less direct operating expenses and general and administrative expenses but
disregarding items specified by the Committee (e.g., items related to
discontinued operations, extraordinary items, non-recurring items, the effects
of changes in tax laws or regulations or changes in applicable accounting
standards), (xiv) assets under management (with or without leverage limitations
prescribed by the Committee), (xv) book value per share or growth in book value
per share or (xvi) maintenance of book value per share.
In
accordance with Section 162(m) of the Code and as stated above, the 2010 Plan
provides that no participant can receive awards during the term of the 2010 Plan
covering more than 750,000 shares of Class A Common Stock.
Special
Rules Upon Reorganizations, Changes in Control, Etc.
If the
Company is involved in a merger, consolidation, dissolution, liquidation,
reorganization, exchange of shares, sale of substantially all of the assets or
stock of the Company or a transaction similar thereto, or upon certain changes
in capital structure and other similar events, the Committee will make
correlative adjustments to outstanding awards and various 2010 Plan provisions
(including, without limitation, the number and kind of shares available under
the 2010 Plan and the per-individual grant limitation).
Without
limiting the foregoing, upon a change in control of the Company (as defined in
the 2010 Plan), the Committee may make such adjustments as it, in its
discretion, determines are necessary or appropriate in light of the change in
control, but only if the Committee determines that the adjustments do not have
an adverse economic impact on the participants (as determined at the time of the
adjustments).
Amendment
and Termination
The Board
of Directors may amend the 2010 Plan as it deems advisable, except that it may
not amend the 2010 Plan in any way that would adversely affect a participant
with respect to an award previously granted unless the amendment is required in
order to comply with applicable laws. However, the Board of Directors may not
amend the 2010 Plan without the approval of stockholders if approval is required
by applicable law or the rules of any exchange.
2010
Plan Benefits
All
awards under the 2010 Plan will be made at the discretion of the
Committee. Accordingly, the benefits or amounts that may be received
by or allocated to participants under the 2010 Plan cannot be determined at
this.
CERTAIN
U.S. FEDERAL INCOME TAX CONSEQUENCES
The
following is a summary of certain expected U.S. federal income tax consequences
under current law relating to awards under the 2010 Plan. This description is
not intended to be complete in all respects and the consequences may vary
depending on the personal tax circumstances of the participant.
Non-Qualified
Stock Options
No income
will be recognized by a participant at the time a non-qualified stock option
i.e., an option that is
not an Incentive Stock Option, is granted. Ordinary income will generally be
recognized by a participant at the time a non-qualified stock option is
exercised in an amount equal to the excess of the fair market value of the
common stock on the exercise date over the exercise price. The Company will
generally be entitled to a deduction for U.S. federal income tax purposes in the
same amount as the ordinary income recognized by the option holder upon exercise
of the non-qualified stock option. Gain or loss on a subsequent sale or other
disposition of the shares acquired upon the exercise of a non-qualified stock
option will be measured by the difference between the amount realized on the
disposition and the tax basis of such shares, and will generally be long-term or
short-term capital gain depending on the holding period involved. The tax basis
of the shares acquired upon the exercise of any non-qualified stock option will
be equal to the sum of the exercise price of the non-qualified stock option and
the amount included in income with respect to the option.
Incentive
Stock Options
In
general, neither the grant nor the exercise of an Incentive Stock Option will
result in taxable income to a participant or a deduction for the Company. To
receive special tax treatment as an Incentive Stock Option under the Code, a
participant must not dispose of the shares within two years after the Incentive
Stock Option is granted nor within one year after the transfer of the shares to
the option holder pursuant to exercise of the option. In addition, the option
holder must be an employee of the Company or a subsidiary at all times between
the date of grant and the date three months (or one year in the case of
disability) before exercise of the option. (Special rules apply in the case of
the death of the option holder.) If the holding period is satisfied,
any gain on the sale of shares of the Company’s common stock received upon the
exercise of an Incentive Stock Option will be treated as a capital gain, but the
Company will not be entitled to a tax deduction. The exercise of an Incentive
Stock Option may affect the participant’s liability for alternative minimum
tax.
If the
holding period rules noted above are not satisfied, all or part of the gain
recognized on the disposition of the shares acquired upon the exercise of an
Incentive Stock Option will be characterized as ordinary income. The ordinary
income generally will be equal to the difference between the exercise price and
the fair market value of the shares at the time of exercise. (Special rules may
apply to disqualifying dispositions where the amount realized is less than the
value at exercise.) The Company will generally be entitled to a deduction equal
to the amount of ordinary income recognized by participant. Any excess of the
amount realized upon such disposition over the fair market value at exercise
will generally be long-term or short-term capital gain depending on the holding
period involved.
Restricted
Stock
Unless a
participant makes an "83(b) election" (as discussed below), a participant will
recognize ordinary income on account of a restricted stock award on the first
date that the restricted stock is no longer subject to a substantial risk of
forfeiture or is transferable. Dividends paid on unvested shares will generally
be treated as compensation income for U.S. federal income tax purposes (unless
an 83(b) election has been made, as discussed below). Generally, when the
restrictions are lifted, the participant will recognize ordinary income, and the
Company will be entitled to a deduction, equal to the difference between the
fair market value of the stock at that time and the amount, if any, paid for the
restricted stock. Subsequently realized changes in the value of the stock
generally will be treated as long-term or short-term capital gain or loss,
depending on the length of time the shares are held prior to disposition of the
shares. In general terms, if a participant makes an 83(b) election (under
Section 83(b) of the Code) upon the award of restricted stock, the participant
will recognize ordinary income on the date of the award of restricted stock, and
the Company will be entitled to a deduction, equal to (i) the fair market value
of the restricted stock on the date of grant, minus (ii) the amount, if any,
paid for the restricted stock. If an 83(b) election is made, there
will generally be no tax consequences to the participant upon the lifting of
restrictions, and all subsequent appreciation after the date of grant generally
would be eligible for capital gains treatment. In the event of a
forfeiture after an 83(b) election is made, no deduction or loss will be
available, other than with respect to amounts actually paid for the
stock.
Phantom
Shares
It is
generally expected that phantom share awards will be designed so that there will
be no tax consequences as a result of the granting of a phantom share until
payment is made with respect to the phantom share. When payment is made, the
participant generally would recognize ordinary income, and the Company would
generally be entitled to a deduction, equal to the fair market value of the
common stock and cash, as applicable, received upon payment.
Other
Stock-Based Awards
A
participant will recognize ordinary income on account of the transfer of common
stock or other property under an Other Stock-Based Award on the first date that
the shares or other property are no longer subject to a substantial risk of
forfeiture or is transferable. A participant who receives common
stock or other property under an Other Stock-Based Award may elect to have the
federal income tax consequences of the transfer determined as of the date of
grant by making an 83(b) election as described above. The amount of
income recognized by a participant is equal to the (i) the fair market value of
the common stock or other property on the applicable tax date minus (ii) the
amount, if any, paid for the common stock or other property. The
Company will be entitled to a deduction equal to the amount of ordinary income
recognized by the participant.
Other
Stock-Based Awards that do not involve a transfer of common stock or other
property generally will be designed so that there will be no tax consequences as
a result of the granting of the award until payment is made. When
payment is made, the participant will recognize ordinary income, and the Company
will be entitled to a deduction, equal to the amount paid pursuant to the other
stock-based award.
Dividend
Equivalents
There
generally will be no tax consequences as a result of the award of a dividend
equivalent. When payment is made, the holder of the dividend equivalent
generally will recognize ordinary income, and the Company will be entitled to a
deduction, equal to the amount received in respect of the dividend
equivalent.
THE
BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
THE
BIMINI CAPITAL MANAGEMENT, INC.
2010
LONG-TERM INCENTIVE COMPENSATION PLAN.
PROPOSAL
3: TO RATIFY THE SELECTION OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
Our Audit
Committee has selected the accounting firm of BDO Seidman, LLP to serve as our
independent registered public accounting firm for the year ending December 31,
2010, subject to ratification of this appointment by our
shareholders. Action by shareholders is not required by law in the
appointment of an independent registered public accounting firm, but this
appointment is submitted by the Board of Directors in order to give the
shareholders a voice in the designation of auditors. If the
appointment is not ratified by the shareholders, the Board of Directors will
reconsider its choice of BDO Seidman, LLP as our independent registered public
accounting firm. BDO Seidman, LLP has advised us that neither it nor
any member thereof has any financial interest, direct or indirect, in our
company or any of our subsidiaries in any capacity. BDO Seidman, LLP
has served as our independent registered public accounting firm since April 17,
2008 and audited our consolidated financial statements for the years ended
December 31, 2008 and 2009.
The
Company anticipates that a representative of BDO Seidman, LLP will be present at
the annual meeting, will be given the opportunity to make a statement if he or
she so desires and will be available to respond to appropriate
questions.
THE BOARD RECOMMENDS
A VOTE FOR
THE
RATIFICATION OF THE SELECTION OF BDO SEIDMAN, LLP
AS
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
CORPORATE
GOVERNANCE
Board
Composition
The
Company’s business, property and affairs are managed under the direction of the
Board of Directors. The Board is currently comprised of three
directors divided into three classes, with one director representing each class.
Terms of the classes are staggered, with one class standing for election each
year. The Board is elected by stockholders to oversee management of
the Company in the long-term interests of all stockholders.
Director
Independence
Pursuant
to Item 407(a)(1)(ii) of Regulation S-K of the Securities and Exchange
Commission, the Board is required to affirmatively determine and disclose the
independence of each director, and nominee for election as a director, based on
the director independence standards of a national securities exchange or an
inter-dealer quotation system having certain director independence requirements
notwithstanding that the Company is not currently listed on any such exchange
and the Company’s securities are not currently quoted in any such inter-dealer
quotation system. The Board has determined to use the definition of
“independent director” as set forth in the Marketplace Rules of The Nasdaq Stock
Market, LLC. Based on such definition, the Board has affirmatively
determined that the following directors are “independent” within the meaning of
Rule 5605(a)(2) of the Marketplace Rules and have no relationship with the
Company which, in the opinion of the Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director:
Robert J.
Dwyer
Frank E.
Jaumot
Notwithstanding
the determination described above, the Board has determined that Mr. Jaumot is
not “independent” under the stricter definition of that term that is contained
in Rule 5605(c)(2) of the Marketplace Rules and Rule 10A-3(b)(1) of the
Securities Exchange Act of 1934. That stricter definition of
“independent” is applied for purposes of service on the Company’s Audit
Committee. Services provided to the Company by Ahearn, Jasco &
Company, P.A. cause Mr. Jaumot to not be “independent” for Audit Committee
purposes. In addition, the Board has determined that Robert E. Cauley
is not “independent” for purposes of the Marketplace Rules because he is an
officer and employee of the Company.
Board
Meetings and Committees
The Board
currently has three standing committees: the Audit Committee, the Compensation
Committee and the Corporate Governance and Nominating Committee. The
charter of each Board committee is available on the Corporate Governance section
of the Company’s website at www.biminicapital.com and will be made available in
print to any stockholder upon written request delivered to our corporate
secretary at Bimini Capital Management, Inc., 3305 Flamingo Drive, Vero Beach,
Florida 32963. The following table reflects the composition of each
of the Board’s standing committees as of April 30, 2010:
|
Audit
|
Compensation
|
Corporate
Governance and
|
||
|
Committee
|
|
Committee
|
|
Nominating
Committee
|
|
Robert J. Dwyer*+
|
Robert
J Dwyer*
|
Robert
J. Dwyer*
|
||
|
Frank
E. Jaumot
|
Frank
E. Jaumot
|
|||
____________________
|
*
|
Current
Committee Chair.
|
|
+
|
Audit
Committee Financial Expert.
|
During
2009, the Board held 7 meetings, the Audit Committee held 5 meetings, the
Corporate Governance and Nominating Committee held 2 meetings and the
Compensation Committee held 2 meetings. During 2009, no incumbent
director attended fewer than 75% of the aggregate of the total number of
meetings of the Board (held during the period for which such person was a
director) and the total number of meetings held by all committees of the Board
on which such person served (during the periods that such person
served). It is the Company’s policy for Board members to attend
the Annual Meeting of the Stockholders. In 2009, all three Board
members attended the Annual Meeting of the Stockholders.
Audit
Committee
The Audit
Committee’s charter, which may be accessed on the Corporate Governance section
of our website at www.biminicapital.com, describes the composition, purposes and
responsibilities of the committee. Among other things, the charter
provides that the committee will be comprised of at least one director as
appointed by the Board, whom shall meet the independence and audit committee
composition requirements under applicable law and stock exchange listing
standards as in effect from time to time and shall be free from any relationship
that would interfere with the exercise of his or her independent judgment as a
member of the Committee.
The
functions of the committee are primarily to review with our independent
registered public accounting firm their reports concerning audit findings
related to the Company’s annual and quarterly financial statements, internal
controls and procedures and disclosure controls and procedures. The
committee also appoints our independent registered public accounting firm and
assists the Board in oversight of our compliance with legal and regulatory
requirements related to financial reporting matters.
The Board
has determined that the Chair of the committee, Mr. Robert J. Dwyer, is an
“audit committee financial expert” within the meaning of the applicable rules
and regulations of the Securities and Exchange Commission and an Independent
Directors according to the Marketplace Rules of The Nasdaq Stock Market,
LLC.
Service
Fees Paid to the Independent Registered Public Accounting Firm
The Audit
Committee has selected BDO Seidman, LLP as its independent registered public
accounting firm for 2010 and such firm has audited the Company’s annual
consolidated financial statements for 2008 and 2009. The Company
anticipates that representatives of BDO Seidman, LLP will be present at the
Annual Meeting and, while they do not plan to make a statement (although they
will have the opportunity to do so if they desire), they will be available to
respond to appropriate questions from stockholders.
Fee
Disclosure
The
following table lists the fees for services rendered by BDO Seidman, LLP, our
independent registered public accounting firm for the years ended December 31,
2009 and 2008:
|
Services
|
2009
|
2008
|
||||||
|
Audit
Fees1
|
$ | 425,000 | $ | 550,000 | ||||
|
Audit
Related Fees2
|
- | - | ||||||
|
Tax
Fees3
|
- | - | ||||||
|
All
Other Fees
|
- | - | ||||||
|
Total
|
$ | 425,000 | $ | 550,000 | ||||
|
1
|
Fees
related to the audit of the consolidated financial statements, consents,
quarterly reviews, consultations concerning financial accounting and
reporting standards arising during the
audits.
|
|
2
|
Audit-related
fees consist of Sarbanes Oxley compliance review and
consultation.
|
|
3
|
Tax
services consist of tax compliance and tax planning and
advice.
|
Pre-Approval
Policies and Procedures of our Audit Committee
Our Audit
Committee must pre-approve, to the extent required by applicable law, all audit
services and permissible non-audit services provided by our independent
registered public accounting firm, except for any de minimis non-audit services.
All of the fees reflected above were approved by our Audit
Committee.
Transactions
with Related Persons
Pursuant
to its committee charter, the Audit Committee of the Board of Directors is
responsible for reviewing and approving related person
transactions. Related person transactions include those transactions
required to be disclosed by Item 404 of Regulation S-K under the Securities
Exchange Act of 1934, as amended. As the Company is currently a
“smaller reporting company” within the meaning of Regulation S-K, Item 404
requires disclosure of any transaction, since the beginning of the Company’s
fiscal year immediately preceding the Company’s last fiscal year, or any
currently proposed transaction, in which the Company was or is to be a
participant and the amount involved exceeds the lesser of $120,000 or one
percent of the average of the Company’s total assets at year end for the last
two completed fiscal years, and in which a related person had or will have a
direct or indirect material interest. The term “related person” is
defined in Item 404 and includes the Company’s directors, nominees for director,
executive officers and each of their respective immediate family members, as
well as any person that beneficially owns more than 5% of any class of the
Company’s voting stock and each such person’s immediate family members, where
applicable.
In
fulfilling its responsibility, the Audit Committee will review the relevant
facts of each related person transaction or series of related transactions and
either approve, ratify or disapprove such transaction or
transactions. The Audit Committee will take into account such factors
as it deems necessary or appropriate in deciding whether to approve, ratify or
disapprove any related person transaction, including any one or more of the
following:
|
§
|
The
terms of the transaction;
|
|
§
|
The
benefits to the Company of the
transaction;
|
|
§
|
The
availability of other sources for comparable products or
services;
|
|
§
|
The
terms available to unrelated third parties or to employees generally;
and
|
|
§
|
The
impact on a director’s independence in the event that such director is a
party to the transaction or such director, an immediately family member of
such director, or an entity in which such director is an executive officer
or has a direct or indirect material interest is a party to the
transaction.
|
No
director may participate in any consideration or approval of a related person
transaction with respect to which such director or any of such director’s
immediate family members is the related person or has a direct or indirect
material interest. Related person transactions will only be approved
if they are determined to be in, or not inconsistent with, the best interests of
the Company and its stockholders.
On an
annual basis, the Company solicits information from each of the Company’s
directors and executive officers to identify related person
transactions. If a related person transaction that has not been
previously approved or previously ratified is identified, the Audit Committee
will promptly consider all of the relevant facts. If the transaction
is ongoing, the Audit Committee may ratify or request the rescission, amendment
or termination of the related person transaction. If the transaction
has been completed, the Audit Committee may seek to rescind the transaction
where appropriate and may recommend that the Board or the Company take
appropriate disciplinary action where warranted. In addition, the
Audit Committee will generally review any ongoing related person transactions on
an annual basis to determine whether to continue, modify or terminate such
related person transactions.
Mr.
Jaumot is the Director of Accounting and Auditing and a shareholder of the
certified public accounting firm Ahearn, Jasco & Company,
P.A. Ahearn, Jasco & Company, P.A. has provided tax, accounting,
and SEC consulting services to the Company since approximately 2003 and is
expected to continue providing such services in the future. Mr.
Jaumot has been directly involved with services provided by Ahearn, Jasco &
Company, P.A. to the Company. During fiscal years 2008 and 2009, the
Company paid Ahearn, Jasco & Company, P.A. approximately $103,000 and
$112,000, respectively, and from January 1, 2010 through March 31, 2010, the
Company has been billed approximately $43,400 for services performed in
2010. The Audit Committee has reviewed the engagement of Ahearn,
Jasco & Company, P.A. and Mr. Jaumot’s position on the Board of Directors,
and determined that the engagement of Ahearn, Jasco & Company, P.A. is in
the best interests of the Company. The Audit Committee will annually
review this engagement.
Compensation
Committee
The
Compensation Committee’s charter, which may be accessed on the Corporate
Governance section of our website at www.biminicapital.com, describes the
composition, purposes and responsibilities of the committee. Among
other things, the charter provides that the committee will be comprised of at
least one director as appointed by the Board, each of whom shall meet the
independence requirements under applicable law and stock exchange listing
standards as in effect from time to time and shall be free from any relationship
that would interfere with the exercise of his or her independent judgment as a
member of the committee. The Compensation Committee reviews and
establishes or recommends to the Board the compensation and benefits of all of
the Company’s executive officers, administers the Company’s incentive
compensation plans and establishes and reviews general policies relating to
compensation and benefits of the Company’s employees. Recommendations
regarding compensation of other non-executive officers are made by our Chief
Executive Officer.
The
Compensation Committee has the sole authority under its charter to select,
retain and terminate a compensation consultant and to approve the consultant’s
fees and other retention terms. The Compensation Committee did not
engage any compensation consultants during 2009. Rather, the
Compensation Committee reviewed certain publicly available information, as well
as information provided by the Company.
Compensation
Committee Interlocks and Insider Participation
No member
of the Compensation Committee was at any time during 2009 an officer or employee
of the Company or any of the Company’s direct or indirect subsidiaries nor is
any such person a former officer of the Company or any of the Company’s direct
or indirect subsidiaries. In addition, no executive officer of the
Company currently serves as a director or member of the compensation committee
of any entity that has one or more executive officers serving as a director of
the Company.
Corporate
Governance and Nominating Committee
The
Corporate Governance and Nominating Committee’s charter, which may be accessed
on the Corporate Governance section of our website at www.biminicapital.com,
describes the composition, purposes and responsibilities of the
committee. Among other things, the charter provides that the
committee shall be comprised of at least one director as appointed by the Board,
each of whom shall meet the independence requirements under applicable law and
stock exchange listing standards as in effect from time to time and shall be
free from any relationship that would interfere with the exercise of his or her
independent judgment as a member of the committee. The charter also
provides that the committee shall be responsible to identify and recommend to
the Board of Directors persons to be nominated by the Board to stand for
election as directors at each Annual Meeting of Stockholders and persons to be
elected by the Board to fill any vacancy or vacancies in its
number. The committee also recommends to the Board actions to be
taken regarding the structure, organization and functioning of the Board, and
the persons to serve as members of the standing committees of, and other
committees appointed by, the Board. The charter gives the committee
the responsibility to develop and recommend corporate governance guidelines to
the Board, and to recommend to the Board the process and criteria to be used in
evaluating the performance of the Board and to oversee the evaluation of the
Board.
In
identifying potential candidates for Board membership, the Corporate Governance
and Nominating Committee may consider candidates proposed by management, but is
not required to do so. The committee also relies on suggestions and
recommendations from current directors and stockholders and does not distinguish
nominees recommended by stockholders from other nominees. A
stockholder who wishes to recommend a candidate for director of the Company may
write to Chair, Corporate Governance and Nominating Committee of the Board of
Directors, in care of our corporate secretary at Bimini Capital Management,
Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963.
In
evaluating candidates for members of the Board, the Corporate Governance and
Nominating Committee has not established specific minimum qualification
standards, but rather takes into consideration such factors as it deems
appropriate. These factors may include judgment, skill, diversity,
experience with businesses and other organizations of comparable size, the
interplay of the candidate’s experience with the experience of other Board
members, and the extent to which the candidate would be a desirable addition to
the Board and any committees of the Board.
Corporate
Governance Guidelines
The Board
has adopted Corporate Governance Guidelines. These guidelines are
revised from time to time to better address new or changing needs and regulatory
requirements. The Corporate Governance Guidelines may be accessed
from the Corporate Governance section of our website at www.biminicapital.com,
and will be made available in print to any stockholder upon written request
delivered to our corporate secretary at Bimini Capital Management, Inc., 3305
Flamingo Drive, Vero Beach, Florida 32963.
Corporate
Conduct and Ethics
The
Company has adopted a Code of Business Conduct and Ethics that is applicable to
all officers, directors and employees of the Company and its
subsidiaries. The Company has also adopted a Code of Ethics for
Senior Financial Officers that is applicable to our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The Company’s Code of Business
Conduct and Ethics and the Company’s Code of Ethics for Senior Financial
Officers may be accessed from the Corporate Governance section of our website at
www.biminicapital.com, and will be made available in print to any stockholder
upon written request delivered to our corporate secretary at Bimini Capital
Management, Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963. The
Company intends to disclose any waivers from, or amendments to, our Code of
Business Conduct and Ethics and our Code of Ethics for Senior Financial Officers
required to be disclosed by applicable law or stock exchange listing standards
by posting a description of such waiver or amendment on our website at
www.biminicapital.com.
Stockholder
Communications
Stockholders
and other interested parties may communicate with any director, including the
Chairman of the Board and the chairman of any committee of the Board or with the
non-management directors as a group, by sending a letter to the attention of the
appropriate person or persons (which may be marked as confidential) addressed in
care of our corporate secretary at Bimini Capital Management, Inc., 3305
Flamingo Drive, Vero Beach, Florida 32963. All communications
received by our corporate secretary will be forwarded to the intended
recipient(s). Any such communications may be made
anonymously.
AUDIT
COMMITTEE REPORT
In
connection with the preparation of the Company’s consolidated financial
statements for the year ended December 31, 2009, the Audit
Committee:
|
§
|
Reviewed
and discussed the Company’s audited consolidated financial statements with
management;
|
|
§
|
Discussed with the Company’s
independent registered public accounting firm, BDO Seidman, LLP, the
matters required by Statement on Auditing Standards (“SAS”) No. 61, as
amended (AICPA, Professional
Standards, Vol. 1.
AU section 380), as adopted by the Public Company Accounting Oversight
Board in Rule 3200T; and
|
|
§
|
Received the written independence
disclosures from BDO Seidman, LLP required by Independence Standards Board
Standard No. 1 (Independence Standards Board No. 1, Independence
Discussions with Audit Committees), as adopted by the Public
Company Accounting Oversight Board in Rule 3600T, and has discussed with
BDO Seidman, LLP their
independence.
|
Based
upon these reviews and discussions, the Audit Committee recommended to the Board
that the Company’s audited consolidated financial statements be included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2009, for
filing with the Securities and Exchange Commission.
The Audit
Committee:
Robert J.
Dwyer (Chair)
Notwithstanding
anything to the contrary set forth in any of our previous filings under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, that incorporate future filings, including this Proxy Statement, in
whole or in part, the foregoing Audit Committee Report shall not be incorporated
by reference into any such filings.
COMPENSATION
OF DIRECTORS
Overview
Directors
who are not also employees of the Company are paid compensation in exchange for
their service as a director. Director compensation is reviewed
periodically by the Board to ensure such compensation is reasonable and
appropriate.
Annual
Retainer
During
2007, each of the Company’s non-employee directors were entitled to an annual
retainer of $95,000. Effective as of the 2008 Annual Meeting, the annual
retainer was reduced to $70,000. Except for directors who own,
through direct ownership or voting control, 50,000 shares or more of the
Company’s Class A Common Stock, a minimum of one-half of the compensation paid
to the Company’s non-employee directors is required to be paid in the form of
shares of the Company’s Class A Common Stock. In addition, each of the Company’s
non-employee directors may elect to receive all or a portion of the balance of
their director compensation in the form of shares of the Company’s Class A
Common Stock. Directors who are also employees of the Company are not separately
compensated for their service as directors.
The
Company has agreed to compensate Mr. Jaumot on a different basis than the other
non-employee directors. Mr. Jaumot will be compensated for his board
service on an hourly basis using the standard hourly rate used in his CPA
practice. During 2009, Mr. Jaumot’s hourly rate was $345 per
hour. Mr. Jaumot’s current hourly rate is $365.
Additional
Retainers
In
addition to the annual retainer for each non-employee director, non-employee
directors were entitled to the following additional retainers during
2009:
|
Nature of
Retainer
|
Retainer
Amount
|
|||
|
Audit Committee Chair
|
$ | 25,000 | ||
|
Corporate Governance and
Nominating Committee Chair
|
$ | 10,000 | ||
|
Compensation Committee
Chair
|
$ | 10,000 | ||
During
2009, Mr. Dwyer served as Chair of each of the Committees listed
above.
The
following table sets forth the compensation paid to non-employee directors
during 2009:
Directors
Compensation Table
|
Name
|
Fees
Earned or Paid in Cash1
|
|
Stock
Awards2
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Non-Qualified
Deferred Compensation Earnings
|
All
Other Compensation
|
|
Total
|
||||
|
Robert
J. Dwyer
|
$
|
$ |
115,000
|
$
|
$
|
$
|
$
|
$ |
115,000
|
||||
|
Frank
E. Jaumot3
|
$
|
$ |
34,052
|
$
|
$
|
$
|
$
|
$ |
34,052
|
||||
|
1
|
Except
as described in note 3 below, during 2009 director fees included an annual
retainer of $70,000 and additional committee chair
retainers. The chair of the Audit Committee received an
additional annual retainer of $25,000, while the chairs of the
Compensation Committee and the Corporate Governance and Nominating
Committee each received an additional annual retainer of
$10,000. These retainer fees were paid quarterly and directors
were entitled to elect to receive shares of the Company’s Class A Common
Stock in lieu of all or any portion of their retainer fees that would
otherwise be payable in cash. In addition, except for directors
who own, through direct ownership or voting control, 5,000 shares or more
of the Company’s Class A Common Stock, a minimum of one-half of the
compensation paid to the Company’s non-employee directors is paid in the
form of shares of the Company’s Class A Common
Stock. Director’s fees are paid in advance on December 1, March
1, June 1, and September 1 of each
year.
|
|
2
|
Amounts
in this column represent the expense, rounded to the nearest dollar,
recognized for financial statement purposes for the fiscal year ended
December 31, 2009, in accordance with Statement of Financial Accounting
Standards No. 123R (“FAS 123R”) of shares of the Company’s Class A Common
Stock issued to directors in lieu of any retainer fees that would
otherwise be payable in cash. The grant date fair value of
shares of the Company’s Class A Common Stock so issued during 2009 to each
non-employee director is shown in the accompanying table below entitled
“Stock Awards to Non-Employee Directors in Lieu of Cash
Payments.”
|
|
3
|
Mr.
Jaumot became a director on April 24, 2009. Mr. Jaumot is
compensated for his board service on an hourly basis using the standard
hourly rate used in his CPA practice, which was $345 per hour during
2009.
|
Stock
Awards to Non-Employee Directors in Lieu of Cash Payments
|
Grant
Date
|
|||||||||||||
|
Number
of
|
Fair
Value of
|
||||||||||||
|
Name
|
Grant
Date
|
Shares
|
Stock
Awards1
|
Total
|
|||||||||
|
Robert
J. Dwyer
|
3/18/2009
|
71,875 | $ | 28,750 | $ | 115,000 | |||||||
|
6/16/2009
|
20,536 | 28,750 | |||||||||||
|
9/16/2009
|
13,691 | 28,750 | |||||||||||
|
12/16/2009
|
9,914 | 28,750 | |||||||||||
|
Frank
E. Jaumot
|
6/16/2009
|
8,527 | $ | 11,937 | $ | 34,052 | |||||||
|
9/16/2009
|
4,091 | 8,591 | |||||||||||
|
12/16/2009
|
4,664 | 13,524 | |||||||||||
|
1
|
Amounts
in this column represent the grant date fair value computed in accordance
with FASB ASC Topic 718 (column (c)) attributable to shares of the
Company’s Class A Common Stock issued to directors in lieu of retainer
fees that would otherwise be payable in
cash.
|
COMPENSATION
OF EXECUTIVE OFFICERS
Our
executive officers are appointed by the Board of Directors and they serve at the
Board’s discretion. None of our executive officers or directors are
related. Set forth below is information about our current executive
officers.
ROBERT E. CAULEY, 51, has
been a director of the Company since its inception in 2003. He is
currently Chairman of the Board and Chief Executive Officer of the Company and
is one of the Company’s founders. Prior to co-founding the Company,
he was Vice President, Portfolio Manager at Federated Investment Management
Company in Pittsburgh, Pennsylvania, where, from 1996 until September 2003, he
served as a lead portfolio manager, co-manager, or assistant portfolio manager
of $4.25 billion (base capital, unlevered amount) in mortgage and asset backed
securities funds. From 1994 to 1996, he was an associate at Lehman
Brothers in the asset-backed structuring group. From 1992 to 1994, he
was a credit analyst in the highly levered firms group and the aerospace group
at Barclay’s Bank. Mr. Cauley has invested in, researched, or
structured almost every type of mortgage-backed security. Mr. Cauley,
who is a CFA and a CPA, received his MBA in finance and economics from Carnegie
Mellon University and his BA in accounting from California State University,
Fullerton. Mr. Cauley served in the United States Marine Corps for
four years.
G. HUNTER HAAS, IV, 33, serves as President, Chief
Investment Officer, Chief Financial Officer and Treasurer for the
Company. Mr. Haas joined Bimini Capital Management, Inc. in April
2004 as Vice President and Head of Mortgage Research. Prior to
joining the Company, Mr. Haas worked at National City Mortgage Company from June
2002 to April 2004, most recently as Vice President of Risk Analytics in the
Servicing Asset Risk Management Department. While there, he
specialized in researching the impact of mortgage prepayments on a $155 billion
servicing portfolio. Mr. Haas has presented his research at
conferences to other fixed income and mortgage banking
professionals. He worked at Homeside Lending Inc. from December 2001
to May 2002, where he was a member of the Capital Markets Finance Group. Prior
to December 2001, Hunter attended Oklahoma State University, where he received
his MS in Economics. While there he focused his graduate studies on
econometrics, forecasting and statistical analysis.
The
following table summarizes compensation awarded or paid during the Company’s
last two fiscal years to Robert E. Cauley and G. Hunter Haas, IV as the
Company’s principal executive officer and principal financial officer,
respectively. Mr. Cauley and Mr. Haas constitute all of the Company’s
executive officers and are referred to as the Company’s named executive
officers.
Summary
Compensation Table
|
Nonqualified
|
||||||||||||||||||||||||
|
Non-Equity
|
Deferred
|
|||||||||||||||||||||||
|
Stock
|
Option
|
Incentive
Plan
|
Compensation
|
All
Other
|
||||||||||||||||||||
|
Name
|
Year
|
Salary1
|
Bonus2
|
Awards3
|
Awards
|
Compensation
|
Earnings
|
Compensation4
|
Total
|
|||||||||||||||
|
Robert
E. Cauley
|
2009
|
400,000 | 200,000 | 75,000 | 76,544 | 751,544 | ||||||||||||||||||
|
2008
|
400,000 | 88,800 | - | 22,960 | 511,760 | |||||||||||||||||||
|
G.
Hunter Haas, IV
|
2009
|
400,000 | 100,000 | 75,000 | 70,208 | 645,208 | ||||||||||||||||||
|
2008
|
200,004 | 227,500 | 29,900 | 11,605 | 469,009 | |||||||||||||||||||
____________________
|
1
|
Effective
January 1, 2010, the annual salaries of Mr. Cauley was increased to
$525,000.
|
|
2
|
On
December 18, 2009, the Compensation Committee awarded cash bonuses to
Messrs. Cauley and Haas in respect of 2009 service to the Company in the
amounts of $200,000 and $100,000, respectively. These amounts
were paid in December, 2009. On February 6, 2008, the
Compensation Committee awarded a cash bonus to Mr. Cauley in respect of
2007 service to the Company in the amount of $88,800. This amount was paid
in February, 2008.
|
|
3
|
Does
not reflect amounts actually received as compensation, but represents the
grant date fair value computed in accordance with FASB ASC Topic 718. On
June 16, 2009, the Compensation Committee granted 50,000 phantom shares to
each of Mr. Cauley and Mr. Haas. All such phantom shares have
dividend equivalent rights and vest on June 14, 2014. On
January 2, 2008, the Compensation Committee granted 11,500 phantom shares
to Mr. Haas.
|
|
4
|
Amounts
in this column consist of payments made with respect
reimbursement of certain life, health, disability,
accidental death and dental insurance premiums (exclusive of any tax
gross-up payments) in excess of the percentage of such premiums paid by
the Company for salaried employees generally; matching
contributions under the Company’s 401(k) savings plan; and the aggregate
dollar value of dividends paid on phantom shares that were not vested on
the applicable dividend date, the value of which were not included in the
grant date fair value for such
shares.
|
Neither Mr. Cauley nor Mr. Haas has an employment agreement with the Company. However, Mr. Cauley and Mr. Haas have entered into agreements with the Company which provide for certain payments upon the termination of their employment. Such agreements are described in detail below under “Potential Payments Upon Termination or a Change of Control.”
Outstanding Equity
Awards at Fiscal Year-End
The
following sets forth all outstanding equity awards held by the executive
officers as of December 31, 2009.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||
|
Equity
|
Equity
Incentive
|
|||||||||||||||||||||||
|
Incentive
|
Equity
Incentive
|
Plan
Awards:
|
||||||||||||||||||||||
|
Plan
Awards:
|
Market
|
Plan
Awards:
|
Market
or
|
|||||||||||||||||||||
|
Number
of
|
Number
of
|
Number
of
|
Number
of
|
Value
of
|
Number
of
|
Payout
|
||||||||||||||||||
|
Securities
|
Securities
|
Securities
|
Shares
|
Shares
or
|
Unearned
|
Value
of
|
||||||||||||||||||
|
Underlying
|
Underlying
|
Underlying
|
or
Units of
|
Units
of
|
Shares,
Units or
|
Unearned
|
||||||||||||||||||
|
Unexercised
|
Unexercised
|
Unexercised
|
Option
|
Stock
That
|
Stock
That
|
Other
Rights
|
Shares,
Units or
|
|||||||||||||||||
|
Options
|
Options
|
Unearned
|
Exercise
|
Option
|
Have
|
Have
|
That
Have Not
|
Other
Rights
|
||||||||||||||||
| (#) | (#) |
Options
|
Price
|
Expiration
|
Not
Vested
|
Not
Vested
|
Vested
|
Not
Vested
|
||||||||||||||||
|
Name
|
Exercisable
|
Unexercisable
|
(#) |
($)
|
Date
|
(#)1 |
($)2
|
(#) |
($)
|
|||||||||||||||
|
Robert
E. Cauley
|
— | — | — |
—
|
—
|
50,000 |
$120,000
|
— |
—
|
|||||||||||||||
|
G.
Hunter Haas, IV
|
50,000 |
$120,000
|
||||||||||||||||||||||
____________________
|
1
|
Amounts
in this column represent the number of shares of the Company’s Class A
Common Stock that are issuable upon vesting of phantom shares that were
granted under the Company’s 2003 Long-Term Incentive Compensation Plan and
that remain unvested as of December 31, 2009. These phantom
shares are subject to certain vesting requirements and forfeiture
provisions prior to vesting, but are not subject to any performance-based
vesting criteria. The 50,000 phantom shares held by Mr. Cauley
and 50,000 phantom shares held by Mr. Haas shall vest on June 14,
2014. . Hunter and Bob have no other unvested
shares.
|
|
2
|
Market
value is based on the $2.40 closing price of the Company’s Class A Common
Stock on December 31, 2009, and assumes that the time-based vesting
criteria of all phantom shares unvested as of December 31, 2009, will be
satisfied.
|
Executive
Retirement Benefits
The Company does not maintain any
tax-qualified or nonqualified defined benefit pension plans, supplemental
executive retirement plans or nonqualified deferred compensation plans in which
any of the named executive officers participate. The Company does
maintain a tax qualified defined contribution plan in which Messrs. Cauley and
Haas participate. Under these defined contribution plans, Messrs.
Cauley and Haas received certain matching contributions as set forth in the
Summary Compensation table
above.
POTENTIAL
PAYMENTS UPON TERMINATION OR A CHANGE OF CONTROL
Mr.
Cauley and Mr. Haas entered severance agreements with the Company on December
18, 2008. Those agreements were replaced by new agreements entered
into on June 30, 2009. Mr. Cauley’s agreement and Mr. Haas’ agreement
contain substantially the same terms and conditions. The term of each
new agreement expires June 30, 2012, but is automatically extended by additional
twelve month periods each July 1 unless the Company provides notice otherwise or
in the event of a change of control during the term of the
agreement.
The
qualitative and quantitative information below reflects the amount of
compensation payable to Mr. Cauley and Mr. Haas under their respective
agreements with the Company in the event of termination of such executive’s
employment under several different circumstances. Amounts disclosed
assume that such termination is effective as of December 31, 2009, and thus
include amounts earned through such time and are estimates of the amounts that
would have been payable to the executives had their employment terminated
effective December 31, 2009. The actual amounts, if any, to be paid
out under the executive’s respective agreement can only be determined at the
time of such executive’s separation from the Company. Upon expiration
of these agreements, the termination payment provisions contained in the
agreements, as described below, will automatically terminate and will have no
further force or effect.
Potential Payments and Benefits upon
Termination without Cause or for Good Reason
Under the
agreements, if the Company terminates an executive’s employment without “cause,”
or an executive terminates his employment for “good reason,” or an executive’s
employment terminates due to death or disability, then the executive will be
entitled to receive the following payments and benefits from the Company,
subject to the terms and conditions of the severance agreements:
|
·
|
Payment
of any accrued but unpaid salary from the Company through the date
that employment
terminates;
|
|
·
|
Payment
of any bonus that has been approved by the Compensation Committee of the
Board but which remains unpaid as of termination of
employment;
|
|
·
|
Reimbursement
for any expenses that the executive incurred on behalf of the Company
prior to termination of employment to the extent that such expenses are
reimbursable under the Company’s standard reimbursement
policies;
|
|
·
|
Payment
for the cost of continued health plan coverage for the executive and his
qualified beneficiaries through the term of the
agreement;
|
|
·
|
Payment
for any benefits or payments that the executive is entitled to receive
under any employee benefit plans or other arrangements or agreements that
cover executive;
|
|
·
|
Nonvested
phantom shares or restricted stock, stock options and other
stock-based awards will become automatically vested on the date of the
executive’s termination of
employment;
|
|
·
|
Indemnification
if certain liabilities are incurred by the executive pursuant to Internal
Revenue Code Section 4999; and
|
|
·
|
A
severance benefit equal to the amount described in either (i) or (ii)
below, as applicable:
|
|
|
(i)
|
If
the Company terminates the executive’s employment without Cause within six
months before or after a change of control or the executive resigns from
the Company within six months after a change of control with Good Reason,
the executive will receive a severance benefit equal to three times his
“current cash compensation,” which shall be equal to one year of the
executive’s annual base salary from the Company as in effect on the date
the executive’s employment terminates and the average of the annual cash
bonuses, excluding extraordinary bonuses, paid to the executive for the
Company’s two fiscal years ending before the date the executive’s
employment with the Company terminates;
or
|
|
|
(ii)
|
If
the executive’s employment terminates but the requirements specified in
(i) above are not satisfied, the severance benefit payable is equal to the
executive’s current cash compensation multiplied by the quotient of (a)
the number of days remaining in the term of the agreement and (b)
365.
|
Had the
employment of Mr. Cauley or Mr. Haas been terminated effective as of December
31, 2009, without Cause or for Good Reason, the severance payment would have
been $1,633,200 or $1,360,254 for Mr. Cauley, depending on whether subpart (i)
or (ii) applied, and $1,691,250 or $1,408,603 for Mr. Haas, depending on whether
subpart (i) or (ii) applied. In addition, the fair market value as of
December 31, 2009, of unvested equity-based awards (the vesting of which would
have been accelerated under such circumstances) would have been $120,000 and
$120,000, respectively, for Mr. Cauley and Mr. Haas.
OTHER
INFORMATION
Security
Ownership of Certain Beneficial Owners
As of the
close of business on April 30, 2010, there were 10,099,530 shares of the
Company’s common stock issued and outstanding, consisting of 10,035,654 shares
of Class A Common Stock, 31,938 shares of Class B Common Stock and 31,938 shares
of Class C Common Stock. Set forth below is certain information
concerning beneficial owners, other than the Company’s directors or executive
officers, of more than five percent of the Company’s outstanding common stock as
of December 31, 2009. (The figures in the table and footnote below
give effect to the one-for-ten reverse stock split effective as of March 12,
2010, however, they do not give effect to the January 19, 2010 stock dividend
because the Schedule 13G/A described below presents information as of December
31, 2009 prior to the payment of such dividend.)
|
Amount
and
|
|||||||
|
Nature
of
|
|||||||
|
Title
of
|
Name
and
|
Beneficial
|
Percent
of
|
||||
|
Class
|
|
Address
of Beneficial Owner
|
|
Ownership
|
|
Class
|
|
|
Class
A
|
Security
Investors, LLC
|
||||||
|
Common
|
One
Security Benefit Place
|
||||||
|
Stock
|
Topeka,
KS 66636-0001
|
208,690
|
1
|
7.59%
|
1
|
____________________
|
1
|
Based
solely on a Schedule 13G/A filed with the Securities and Exchange
Commission on February 12, 2010, Security Investors, LLC (“Security
Investors”) reported aggregate beneficial ownership of 208,690 shares of
the Company’s Class A Common Stock outstanding as of December 31, 2009.
Security Investors reported that it possessed sole voting and dispositive
power over 208,690 shares of Class A Common Stock. Security Investors also
reported that it did not possess shared voting or shared dispositive power
over any shares beneficially owned.
|
Security
Ownership of Management and Directors
Set forth
below is information known to the Company regarding the beneficial ownership of
the Company’s Class A Common Stock and Class B Common Stock as of April 30,
2010, by each of the Company’s directors, director nominees and named executive
officers, as well as the beneficial ownership of the Company’s common stock by
all directors, director nominees and named executive officers as a group. Each
person’s beneficial ownership includes:
|
§
|
all
shares the person actually owns (of record or
beneficially);
|
|
§
|
all
shares over which the person has or shares voting or dispositive control
(such as in the capacity as a general partner of an investment fund);
and
|
|
§
|
all
shares the person has the right to acquire within 60 days after April 30,
2010 (such as upon vesting of outstanding phantom shares that are
scheduled to vest within such
period).
|
|
Name
of
|
Amount
and Nature of
|
Percent
of
|
|||||||||||
|
Title
of Class
|
Beneficial
Owner
|
|
Beneficial
Ownership
|
Class
|
|||||||||
|
Class
A
|
|||||||||||||
|
Common
Stock
|
|||||||||||||
|
Robert
E. Cauley
|
1 | 215,910 | 2.15 | % | |||||||||
|
G.
Hunter Haas, IV
|
136,499 | 1.36 | % | ||||||||||
|
Robert
J. Dwyer
|
496,932 | 4.95 | % | ||||||||||
|
Frank
E. Jaumot
|
2 | 157,516 | 1.57 | % | |||||||||
|
All
Directors and Executive Officers
|
|||||||||||||
|
as
a Group
|
1,006,857 | 10.03 | % | ||||||||||
|
1
|
Includes
189,457 shares directly owned by Mr. Cauley, 12,345 shares held in an IRA
account for the benefit of Mr. Cauley, 3,527 shares held in an account for
the benefit of Sherry J. Cauley, Mr. Cauley’s wife, and 10,581 shares held
in custodial accounts for Mr. Cauley’s
children.
|
|
2
|
Includes 143,219 shares directly
owned by Mr. Jaumot, 7,853 shares held in an IRA account for the benefit
of Mr. Jaumot, and 6,444 shares held in an IRA account for the benefit of
Janet M. Jaumot, Mr. Jaumot’s
wife.
|
|
Name
of
|
Amount
and Nature of
|
Percent
of
|
|||||||
|
Title
of Class
|
Beneficial
Owner
|
Beneficial
Ownership
|
Class
|
||||||
|
Class
B
|
|||||||||
|
Common
Stock
|
|||||||||
|
Robert
E. Cauley
|
11,179 | 35.0 | % | ||||||
|
All
Directors and Executive Officers
|
|||||||||
|
as
a Group
|
11,179 | 35.0 | % | ||||||
Section 16(a)
Beneficial Ownership Reporting Compliance
The
Company’s directors and executive officers are required to file reports of
initial ownership and changes in ownership of the Company’s securities with the
Securities and Exchange Commission. To the Company’s knowledge, based
solely on a review of copies of such reports filed with the Securities and
Exchange Commission and written representations that no other reports were
required, the required filings of all such directors and executive officers were
filed timely.
2009
Annual Report
The
Company’s 2009 Annual Report is being mailed to stockholders concurrently with
this Proxy Statement. The 2009 Annual Report, however, is not part of
the proxy solicitation material. A copy of the Company’s Annual
Report on Form 10-K as filed with the Securities and Exchange Commission, which
includes the Company’s consolidated financial statements for the year ended
December 31, 2009, is contained in the 2009 Annual Report and is available on
the Company’s website at www.biminicapital.com. You may obtain
additional copies of our Annual Report on Form 10-K free of charge by directing
your request in writing to our corporate secretary at Bimini Capital Management,
Inc., 3305 Flamingo Drive, Vero Beach, Florida 32963.
Important
Notice Regarding Delivery of Stockholder Documents
In
accordance with a notice sent to certain street name stockholders of the
Company’s voting stock who share a single address, only one copy of this Proxy
Statement and the Annual Report is being sent to that address unless we received
contrary instructions from any stockholder at that address. This
practice, known as “householding,” is designed to reduce the Company’s printing
and postage costs. However, if any stockholder residing at such an
address wishes to receive a separate copy of this Proxy Statement or the Annual
Report, he, she or it may contact the Company at 3305 Flamingo Drive, Vero
Beach, Florida 32963, (772) 231-1400, and the Company will deliver those
documents to such stockholder promptly upon receiving the
request. Any such stockholder may also contact the Company at the
contact information provided above if he, she or it would like to receive
separate proxy statements and annual reports in the future. If you
are receiving multiple copies of the Annual Report and Proxy Statement, you may
also request householding in the future by contacting the Company’s corporate
secretary.
Other Matters;
Adjournments
So far as
is known, no matters other than those described herein are expected to come
before the 2010 Annual Meeting of Stockholders. It is intended,
however, that the proxies solicited hereby will be voted on any other matters
which may properly come before the meeting, or any adjournment or postponement
thereof, in the discretion of the person or persons voting such proxies unless
the stockholder has indicated on the Proxy Card that the shares represented
thereby are not to be voted on such other matters. Adjournments may
be made for the purpose of, among other things, soliciting additional
proxies. Any adjournment may be made from time to time by approval of
the holders of a majority of the shares present in person or by proxy at the
Annual Meeting (whether or not a quorum exists) without further notice other
than by an announcement made at the Annual Meeting. If the Annual
Meeting is adjourned or postponed for any reason, all proxies will be voted at
the reconvened Annual Meeting in the same manner as such proxies would have been
voted at the original convening of the Annual Meeting (except for proxies that
have, at that time, effectively been revoked or withdrawn). The
Company does not currently intend to seek an adjournment of the Annual
Meeting.
|
Vero
Beach, Florida
April 30,
2010
|
BIMINI
CAPITAL MANAGEMENT, INC.
2010 LONG
TERM INCENTIVE COMPENSATION PLAN
TABLE
OF CONTENTS
|
1.
|
DEFINITIONS.
|
1
|
|
2.
|
EFFECTIVE
DATE AND TERMINATION OF PLAN.
|
4
|
|
3.
|
ADMINISTRATION
OF PLAN.
|
4
|
|
4.
|
SHARES
AND UNITS SUBJECT TO THE PLAN.
|
5
|
|
5.
|
PROVISIONS
APPLICABLE TO STOCK OPTIONS.
|
6
|
|
6.
|
PROVISIONS
APPLICABLE TO RESTRICTED STOCK.
|
9
|
|
7.
|
PROVISIONS
APPLICABLE TO PHANTOM SHARES.
|
11
|
|
8.
|
PROVISIONS
APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS.
|
14
|
|
9.
|
OTHER
STOCK-BASED AWARDS
|
15
|
|
10.
|
TAX
WITHHOLDING.
|
15
|
|
11.
|
REGULATIONS
AND APPROVALS.
|
16
|
|
12.
|
INTERPRETATION
AND AMENDMENTS; OTHER RULES.
|
17
|
|
13.
|
CHANGES
IN CAPITAL STRUCTURE.
|
18
|
BIMINI
CAPITAL MANAGEMENT, INC.
2010 LONG TERM INCENTIVE
COMPENSATION PLAN
Bimini
Capital Management, Inc., a Maryland corporation, wishes to attract key
employees, directors and consultants to the Company and its Subsidiaries and
induce key employees, directors and consultants to remain with the Company and
its Subsidiaries, and encourage them to increase their efforts to make the
Company’s business more successful whether directly or through its
Subsidiaries. In furtherance thereof, the Bimini Capital Management,
Inc. 2010 Long Term Incentive Compensation Plan is designed to provide
equity-based incentives to key employees, directors and consultants of the
Company and its Subsidiaries. Awards under the Plan may be made to
selected key employees, directors and consultants of the Company and its
Subsidiaries in the form of Options, Restricted Stock, Phantom Shares, Dividend
Equivalent Rights or other forms of equity-based compensation.
1. DEFINITIONS.
Whenever
used herein, the following terms shall have the meanings set forth
below:
“Award,”
except where referring to a particular category of grant under the Plan, shall
include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock,
Phantom Shares, Dividend Equivalent Rights and Other Stock-Based
Awards.
“Award
Agreement” means a written agreement in a form approved by the Committee to be
entered into by the Company and the Participant as provided in Section
3.
“Board”
means the Board of Directors of the Company.
“Cause”
means, unless otherwise provided in the Participant’s Award Agreement, (i)
engaging in (A) willful or gross misconduct or (B) willful or gross
neglect; (ii) repeatedly failing to adhere to the directions of superiors or the
Board or the written policies and practices of the Company or its Subsidiaries
or its affiliates; (iii) the commission of a felony or a crime of moral
turpitude, dishonesty, breach of trust or unethical business conduct, or any
crime involving the Company or its Subsidiaries, or any affiliate thereof; (iv)
fraud, misappropriation or embezzlement; (v) a material breach of the
Participant’s employment agreement (if any) with the Company or its Subsidiaries
or its affiliates; (vi) acts or omissions constituting a material failure to
perform substantially and adequately the duties assigned to the Participant,;
(vi) any illegal act detrimental to the Company or its Subsidiaries or its
affiliates; or (vii) repeated failure to adhere to the directions of the Board,
to adhere to the Company’s policies and practices or to devote substantially all
of Participant’s business time and efforts to the Company if required by
Participant’s employment agreement; provided, however, that, if at any
particular time the Participant is subject to an effective employment agreement
with the Company, then, in lieu of the foregoing definition, “Cause” shall at
that time have such meaning as may be specified in such employment
agreement.
“Change
in Control” shall mean the happening of any of the following:
(i) any
“person,” including a “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, but excluding the Company, any entity controlling,
controlled by or under common control with the Company, any employee benefit
plan of the Company or any such entity, and with respect to any particular
Participant, the Participant and any “group” (as such term is used in Section
13(d)(3) of the Exchange Act) of which the Participant is a member, is or
becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the Exchange
Act), directly or indirectly, of securities of the Company representing 30% or
more of either (A) the combined voting power of the Company’s then outstanding
securities or (B) the then outstanding Shares (in either such case other than as
a result of an acquisition of securities directly from the Company); provided,
however, that, in no event shall a Change in Control be deemed to have occurred
upon an initial public offering of the Common Stock under the Securities Act;
or
(ii) any
consolidation or merger of the Company where the shareholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, shares representing in
the aggregate 50% or more of the combined voting power of the securities of the
corporation issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any); or
(iii) there
shall occur (A) any sale, lease, exchange or other transfer (in one transaction
or a series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company, other than a
sale or disposition by the Company of all or substantially all of the Company’s
assets to an entity, at least 50% of the combined voting power of the voting
securities of which are owned by “persons” (as defined above in Section (i)) in
substantially the same proportion as their ownership of the Company immediately
prior to such sale or (B) the approval by shareholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company;
or
(iv) the
members of the Board at the beginning of any consecutive 24-calendar-month
period (the “Incumbent Directors”) cease for any reason other than due to death
to constitute at least a majority of the members of the Board; provided that any
director whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the members of
the Board then still in office who were members of the Board at the beginning of
such 24-calendar-month period, shall be deemed to be an Incumbent
Director.
If a
Change in Control constitutes a payment or vesting event with respect to an
Award that provides for the deferral of compensation and is subject to Section
409A of the Code, no payment will be made under that Award on account of a
Change in Control unless the event described in (i), (ii), (iii) or (iv) above,
as applicable, constitutes a “change in control event” under Treasury Regulation
Section 1.409A-3(i)(5).
“Code”
means the Internal Revenue Code of 1986, as amended.
“Committee”
means the Compensation Committee of the Board.
“Common
Stock” means the Company’s Class A Common Stock, par value $.001 per share,
either currently existing or authorized hereafter.
“Company”
means the Bimini Capital Management, Inc., a corporation.
“Director”
means a non-employee director of the Company or it Subsidiaries.
“Disability”
means, unless otherwise provided by the Committee in the Participant’s Award
Agreement, a disability which renders the Participant incapable of performing
all of his or her material duties for a period of at least 180 consecutive or
non-consecutive days during any consecutive twelve-month period.
“Dividend
Equivalent Right” means a right awarded under Section 8 of the Plan to receive
(or have credited) the equivalent value (in cash or Shares of Common Stock) of
dividends declared on the number of shares of Class A Common Stock specified in
the Dividend Equivalent Right Award.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Fair
Market Value” per Share as of a particular date means (i) if Shares are then
listed on a national stock exchange, the closing sales price per Share on the
exchange for the last preceding date on which there was a sale of Shares on such
exchange, as determined by the Committee, (ii) if Shares are not then listed on
a national stock exchange but are then traded on an over-the-counter market, the
average of the closing bid and asked prices for the Shares in such
over-the-counter market for the last preceding date on which there was a sale of
such Shares in such market, as determined by the Committee, or (iii) if Shares
are not then listed on a national stock exchange or traded on an
over-the-counter market, such value as the Committee in its discretion may
determine in accordance with the regulations under Section 409A of the
Code.
“Grantee”
means an employee, director or consultant granted Restricted Stock, Phantom
Shares, Dividend Equivalent Rights or Other Stock-Based Award
hereunder.
“Incentive
Stock Option” means an “incentive stock option” within the meaning of Section
422(b) of the Code.
“Non-Qualified
Stock Option” means an Option which is not an Incentive Stock
Option.
“Option”
means the right to purchase, at a price and for the term fixed by the Committee
in accordance with the Plan, and subject to such other limitations and
restrictions in the Plan and the applicable Award Agreement, a number of Shares
determined by the Committee.
“Optionee”
means an employee or director of, or consultant to, the Company to whom an
Option is granted, or the Successors of the Optionee, as the context so
requires.
“Option
Price” means the exercise price per Share.
“Other
Stock-Based Award” means an award granted pursuant to Section 9.
“Participant”
means a Grantee or Optionee.
“Performance
Measure” means with respect to the Company or a Subsidiary: (i) return on
equity, (ii) total earnings, (iii) earnings growth, (iv) return on capital
(treating the Company’s trust preferred debt as capital), (v) return on capital
employed, (vi) Fair Market Value, (vii) appreciation in Fair Market Value,
(viii) capital raised in the sale of common equity, (ix) net interest margin,
(x) comparison of Share performance with market indices or peer groups, (xi)
earnings per share, (xii) dividends per share, (xiii) income from continuing
operations or core earnings, i.e., net interest income
less direct operating expenses and general and administrative expenses but
disregarding items specified by the Committee (e.g., items related to
discontinued operations, extraordinary items, non-recurring items, the effects
of changes in tax laws or regulations or changes in applicable accounting
standards), (xiv) assets under management (with or without leverage limitations
prescribed by the Committee), (xv) book value per share or growth in book value
per share or (xvi) maintenance of book value per share.
“Phantom
Share” means a right, pursuant to the Plan, of the Grantee to payment of the
Phantom Share Value.
“Phantom
Share Value,” per Phantom Share, means the Fair Market Value of a Share of Class
A Common Stock, or, if so provided by the Committee, such Fair Market Value to
the extent in excess of a base value established by the Committee at the time of
grant (which shall not be less than the Fair Market Value of a Share on the date
of grant of the Phantom Share).
“Plan”
means the Company’s 2010 Long Term Incentive Compensation Plan, as set forth
herein and as the same may from time to time be amended.
“Restricted
Stock” means an award of Shares that are subject to restrictions
hereunder.
“Retirement”
means, unless otherwise provided by the Committee in the Participant’s Award
Agreement, the Termination of Service (other than for Cause) of a Participant on
or after the Participant’s attainment of age 65 or on or after the Participant’s
attainment of age 55 with five consecutive years of service with the Company and
or its Subsidiaries or its affiliates.
“Securities
Act” means the Securities Act of 1933, as amended.
“Settlement
Date” means the date determined under Section 7.4(c).
“Shares”
means shares of Class A Common Stock of the Company.
“Subsidiary”
means any corporation (other than the Company) that is a “subsidiary
corporation” with respect to the Company under Section 424(f) of the
Code. In the event the Company becomes a subsidiary of another
company, the provisions hereof applicable to subsidiaries shall, unless
otherwise determined by the Committee, also be applicable to any company that is
a “parent corporation” with respect to the Company under Section 424(e) of the
Code.
“Successor
of the Optionee” means the legal representative of the estate of a deceased
Optionee or the person or persons who shall acquire the right to exercise an
Option by bequest or inheritance or by reason of the death of the
Optionee.
“Termination
of Service” means a Participant’s termination of employment or other service, as
applicable, with the Company and its Subsidiaries. Cessation of
service as an officer, employee, director or consultant shall not be treated as
a Termination of Service if the Participant continues without interruption to
serve thereafter in another one (or more) of such other capacities.
2. EFFECTIVE DATE AND
TERMINATION OF PLAN.
The
effective date of the Plan is June 15, 2010. The Plan shall not
become effective unless and until it is approved by the shareholders of the
Company. The Plan shall terminate on, and no Award shall be granted
hereunder on or after, the day before the tenth anniversary of the earlier of
the approval of the Plan by (i) the Board or (ii) the shareholders of the
Company; provided, however, that the Board may at any time prior to that date
terminate the Plan.
3. ADMINISTRATION OF
PLAN.
(a) The Plan
shall be administered by the Committee appointed by the Board. The Committee
shall consist of at least two individuals each of whom shall be a “nonemployee
director” as defined in Rule 16b-3 as promulgated by the Securities and Exchange
Commission (“Rule 16b-3”) under the Exchange Act and an “outside director” for
purposes of Section 162(m) of the Code; provided that any action taken by
the Committee shall be valid and effective, whether or not the members of the
Committee at the time of such action are later determined not to have satisfied
the foregoing requirements. The acts of a majority of the members
present at any meeting of the Committee at which a quorum is present, or acts
approved in writing by a majority of the entire Committee, shall be the acts of
the Committee for purposes of the Plan. If and to the extent
applicable, no member of the Committee may act as to matters under the Plan
specifically relating to such member. If no Committee is designated
by the Board to act for these purposes, the Board shall have the rights and
responsibilities of the Committee hereunder and under the Award
Agreements.
(b) Subject
to the provisions of the Plan, the Committee shall in its discretion as
reflected by the terms of the Award Agreements (i) authorize the granting of
Awards to key employees, directors and consultants of the Company and its
Subsidiaries; and (ii) determine the eligibility of an employee, director or
consultant to receive an Award, as well as determine the number of Shares to be
covered under any Award Agreement, considering the position and responsibilities
of the employee, director or consultant, the nature and value to the Company of
the employee’s, director’s or consultant’s present and potential contribution to
the success of the Company whether directly or through its Subsidiaries and such
other factors as the Committee may deem relevant.
(c) The Award
Agreement shall contain such other terms, provisions and conditions not
inconsistent herewith as shall be determined by the Committee. In the
event that any Award Agreement or other agreement hereunder provides (without
regard to this sentence) for the obligation of the Company or any affiliate
thereof to purchase or repurchase Shares from an Participant or any other
person, then, notwithstanding the provisions of the Award Agreement or such
other agreement, such obligation shall not apply to the extent that the purchase
or repurchase would not be permitted under governing state law. The
Participant shall take whatever additional actions and execute whatever
additional documents the Committee may in its reasonable judgment deem necessary
or advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on the Participant pursuant to the express provisions of
the Plan and the Award Agreement.
(d) Without
limiting the generality of the Committee’s discretion hereunder, the Committee
may (subject to such considerations as may arise under Section 16 of the
Exchange Act, or under other corporate, securities or tax laws) take any steps
it deems appropriate, that are not inconsistent with the purposes and intent of
the Plan, to establish performance-based criteria applicable to Awards otherwise
permitted to be granted hereunder, and to attempt to procure shareholder
approval with respect thereto, to take into account the provisions of Section
162(m) of the Code.
4. SHARES AND UNITS SUBJECT TO
THE PLAN.
4.1 In
General.
(a) Subject
to adjustments as provided in Section 13, the total number of Shares that may be
issued upon the exercise of Options granted under the Plan or that may be issued
pursuant to other Awards, may not exceed 1,500,000 Shares. Shares
distributed under the Plan may be treasury Shares or authorized but unissued
Shares. Any Shares that have been granted as Restricted Stock or
Other Stock-Based Awards or that have been reserved for distribution in payment
for Options or Phantom Shares but are later forfeited or for any other reason
are not payable under the Plan may again be made the subject of Awards under the
Plan.
(b) Shares
subject to Dividend Equivalent Rights, other than Dividend Equivalent Rights
based directly on the dividends payable with respect to Shares subject to
Options or the dividends payable on a number of Shares corresponding to the
number of Phantom Shares awarded, shall be subject to the limitation of Section
4.1(a).
(c) The
certificates for Shares issued hereunder may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer hereunder or
under the Award Agreement, or as the Committee may otherwise deem
appropriate.
4.2 Individual Grant
Limit.
The
aggregate number of Shares for which Awards may be granted to any Participant
during the term of the Plan is 750,000 Shares.
5. PROVISIONS APPLICABLE TO
STOCK OPTIONS.
5.1 Grant of
Option.
Subject
to the other terms of the Plan, the Committee shall, in its discretion as
reflected by the terms of the applicable Award Agreement: determine and
designate from time to time those key employees, directors and consultants of
the Company and its Subsidiaries to whom Options are to be granted (provided
that Options may be granted only to individuals who provide direct services to
the Company or a Subsidiary) and the number of Shares to be optioned to each
employee, director and consultant; (ii) determine whether to grant Options
intended to be Incentive Stock Options, or to grant Non-Qualified Stock Options,
or both (to the extent that any Option does not qualify as an Incentive Stock
Option, it shall constitute a separate Non-Qualified Stock Option); provided
that Incentive Stock Options may only be granted to employees; (iii) determine
the time or times when and the manner and condition in which each Option shall
be exercisable and the duration of the exercise period; (iv) designate each
Option as one intended to be an Incentive Stock Option or as a Non-Qualified
Stock Option; and (v) determine or impose other conditions to the grant or
exercise of Options under the Plan as it may deem appropriate.
5.2 Option
Price.
The
Option Price shall be determined by the Committee on the date the Option is
granted and reflected in the Award Agreement, as the same may be amended from
time to time. Any particular Award Agreement may provide for
different exercise prices for specified amounts of Shares subject to the Option;
provided, however, that the Option Price shall not be less than 100% of the Fair
Market Value of a Share on the day the Option is granted or, in the case of an
Incentive Stock Option granted to an individual described in Section 422(b)(6)
of the Code, not less than 110% of the Fair Market Value of a Share on the day
the Option is granted.
5.3 Period of Option and
Vesting.
(a) Unless
earlier expired, forfeited or otherwise terminated, each Option shall expire in
its entirety upon the day before the tenth anniversary of the date of grant or
such earlier date as is set forth in the applicable Award Agreement (except
that, in the case of an individual described in Section 422(b)(6) of the Code
who is granted an Incentive Stock Option, the term of such Option shall be no
more than five years from the date of grant). The Option shall also
expire, be forfeited and terminate at such times and in such circumstances as
otherwise provided hereunder or under the Award Agreement.
(b) Each
Option, to the extent that the Optionee has not had a Termination of Service and
the Option has not otherwise lapsed, expired, terminated or been forfeited,
shall first become exercisable according to the terms and conditions set forth
in the Award Agreement, as determined by the Committee at the time of grant.
Unless otherwise determined by the Committee at the time of the grant, such
stock options shall vest ratably, in annual installments, over a five-year
period beginning on the date of the grant. Notwithstanding the
preceding sentences, the aggregate Fair Market Value, determined as of the date
an Option is granted, of the Common Stock for which Incentive Stock Options are
first exercisable by the Optionee during any calendar year under the Plan (or
any other stock option plan required to be taken into account under
Section 422(d) of the Code) shall not exceed $100,000. Unless
otherwise provided in the Award Agreement, no Option (or portion thereof) shall
ever be exercisable if the Optionee has a Termination of Service before the time
at which such Option would otherwise have become exercisable, and any Option
that would otherwise become exercisable after such Termination of Service shall
not become exercisable and shall be forfeited upon such
termination. Notwithstanding the foregoing provisions of this Section
5.3(b), Options exercisable pursuant to the schedule set forth by the Committee
at the time of grant may be fully or more rapidly exercisable or otherwise
vested at any time in the discretion of the Committee. Upon and after
the death of an Optionee, such Optionee’s Options, if and to the extent
otherwise exercisable hereunder or under the applicable Award Agreement after
the Optionee’s death, may be exercised by the Successors of the
Optionee.
5.4 Exercisability Upon and
After Termination of Optionee.
(a) Subject
to provisions of the Award Agreement, in the event the Optionee has a
Termination of Service other than by the Company or its Subsidiaries for Cause,
other than by the Optionee for any reason, or other than by reason of death,
Retirement or Disability, no exercise of an Option may occur after the
expiration of the three-month period following a Termination of Service or, if
earlier, the expiration of the term of the Option as provided under Section
5.3(a); provided that, if the Optionee should die after the Termination of
Service, such termination being for a reason other than Disability or
Retirement, but while the Option is still in effect, the Option (if and to the
extent otherwise exercisable by the Optionee at the time of death) may be
exercised until the earlier of (i) one year from the date of the Termination of
Service of the Optionee, or (ii) the date on which the term of the Option
expires in accordance with Section 5.3(a).
(b) Subject
to provisions of the Award Agreement, in the event the Optionee has a
Termination of Service on account of death or Disability or Retirement, the
Option (whether or not otherwise exercisable) may be exercised until the earlier
of (i) one year from the date of the Termination of Service of the Optionee, or
(ii) the date on which the term of the Option expires in accordance with Section
5.3.
(c) Notwithstanding
any other provision hereof, unless otherwise provided in the Award Agreement, if
the Optionee has a Termination of Service by the Company for Cause, the
Optionee’s Options, to the extent then unexercised, shall thereupon cease to be
exercisable and shall be forfeited forthwith.
5.5 Exercise of
Options.
(a) Subject
to vesting, restrictions on exercisability and other restrictions provided for
hereunder or otherwise imposed in accordance herewith, an Option may be
exercised, and payment in full of the aggregate Option Price made, by an
Optionee only by written notice (in the form prescribed by the Committee) to the
Company specifying the number of Shares to be purchased.
(b) Without
limiting the scope of the Committee’s discretion hereunder, the Committee may
impose such other restrictions on the exercise of Incentive Stock Options
(whether or not in the nature of the foregoing restrictions) as it may deem
necessary or appropriate.
(c) If Shares
acquired upon exercise of an Incentive Stock Option are disposed of in a
disqualifying disposition within the meaning of Section 422 of the Code by an
Optionee prior to the expiration of either two years from the date of grant of
such Option or one year from the transfer of Shares to the Optionee pursuant to
the exercise of such Option, or in any other disqualifying disposition within
the meaning of Section 422 of the Code, such Optionee shall notify the Company
in writing as soon as practicable thereafter of the date and terms of such
disposition and, if the Company (or any affiliate thereof) thereupon has a
tax-withholding obligation, shall pay to the Company (or such affiliate) an
amount equal to any withholding tax the Company (or affiliate) is required to
pay as a result of the disqualifying disposition.
5.6 Payment.
(a) The
aggregate Option Price shall be paid in full upon the exercise of the
Option. Payment must be made by one of the following
methods:
(i) a
certified or bank cashier’s check;
(ii) [the
proceeds of a Company loan program or] third-party sale program or a notice
acceptable to the Committee given as consideration under such a program, in each
case if permitted by the Committee in its discretion, if such a program has been
established and the Optionee is eligible to participate therein;
(iii) if
approved by the Committee in its discretion, Shares of previously owned Common
Stock having an aggregate Fair Market Value on the date of exercise equal to the
aggregate Option Price; or
(iv) by any
combination of such methods of payment or any other method acceptable to the
Committee in its discretion.
(b) Except in
the case of Options exercised by certified or bank cashier’s check, the
Committee may impose limitations and prohibitions on the exercise of Options as
it deems appropriate, including, without limitation, any limitation or
prohibition designed to avoid accounting consequences which may result from the
use of Common Stock as payment upon exercise of an Option.
(c) The
Committee may provide that no Option may be exercised with respect to any
fractional Share. Any fractional Shares resulting from an Optionee’s
exercise that is accepted by the Company shall in the discretion of the
Committee be paid in cash.
5.7 Exercise by
Successors.
An Option
may be exercised, and payment in full of the aggregate Option Price made, by the
Successors of the Optionee only by written notice (in the form prescribed by the
Committee) to the Company specifying the number of Shares to be
purchased. Such notice shall state that the aggregate Option Price
will be paid in full, or that the Option will be exercised as otherwise provided
hereunder, in the discretion of the Company or the Committee, if and as
applicable.
5.8 Nontransferability of
Option.
Each
Option granted under the Plan shall be nontransferable by the Optionee except by
will or the laws of descent and distribution of the state wherein the Optionee
is domiciled at the time of his death; provided, however, that the Committee may
(but need not) permit other transfers, where the Committee concludes that such
transferability (i) does not result in accelerated U.S. federal income taxation,
(ii) does not cause any Option intended to be an Incentive Stock Option to fail
to be described in Section 422(b) of the Code, and (iii) is otherwise
appropriate and desirable.
6. PROVISIONS APPLICABLE TO
RESTRICTED STOCK.
6.1 Grant of Restricted
Stock.
Subject
to the other terms of the Plan, the Committee may, in its discretion as
reflected by the terms of the applicable Award Agreement: (i)
authorize the granting of Restricted Stock to key employees, directors and
consultants of the Company and its Subsidiaries; (ii) provide a specified
purchase price for the Restricted Stock (whether or not the payment of a
purchase price is required by any state law applicable to the Company); (iii)
determine the restrictions applicable to Restricted Stock and (iv) determine or
impose other conditions to the grant of Restricted Stock under the Plan as it
may deem appropriate which may include provisions that condition the vesting or
transferability or both of the Restricted Stock on the attainment of goals or
objectives stated with reference to one or more Performance
Measures. Restricted Stock may be awarded on an annual
basis.
6.2 Certificates.
(a) Each
Grantee of Restricted Stock shall be issued a stock certificate in respect of
Shares of Restricted Stock awarded under the Plan. Such certificate
shall be registered in the name of the Grantee. Without
limiting the generality of Section 4.1(c), the certificates for Shares of
Restricted Stock issued hereunder may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer hereunder or under the
Award Agreement, or as the Committee may otherwise deem appropriate, and,
without limiting the generality of the foregoing, shall bear a legend referring
to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) of the Bimini
Capital Management, Inc. 2010 Long Term Incentive Compensation Plan and an Award
Agreement entered into between the registered owner and Bimini Capital
Management, Inc. Copies of such Plan and Award Agreement are on file
in the offices of Bimini Capital Management, Inc., at 3305 Flamingo Drive, Suite
100, Vero Beach, Florida 32963.
(b) The
Committee shall require that the stock certificates evidencing such Shares be
held in custody by the Company until the restrictions hereunder shall have
lapsed, and that, as a condition of any Award of Restricted Stock, the Grantee
shall have delivered a stock power, endorsed in blank, relating to the stock
covered by such Award. If and when such restrictions so lapse, the
stock certificates shall be delivered by the Company to the Grantee or his or
her designee as provided in Section 6.3.
6.3 Restrictions and
Conditions.
Unless
otherwise provided by the Committee, the Shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:
(i) Subject
to the provisions of the Plan and the Award Agreements, during a period
commencing with the date of such Award and ending on the date the period of
forfeiture with respect to such Shares lapses, the Grantee shall not be
permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate,
alienate, encumber or assign Shares of Restricted Stock awarded under the Plan
(or have such Shares attached or garnished). Subject to the
provisions of the Award Agreements and clauses (iv) and (v) below, the period of
forfeiture with respect to Shares granted hereunder shall lapse as provided in
the applicable Award Agreement. Notwithstanding the foregoing, unless
otherwise expressly provided by the Committee, the period of forfeiture with
respect to such Shares shall only lapse as to whole Shares.
(ii) Subject
to the provisions of the Plan and Award Agreements, unless otherwise determined
by the Committee at the time of grant, the period of forfeiture described in
clause (i) shall be a three-year period, and restriction shall lapse ratably in
annual installments over the period. In addition, unless otherwise
provided by the Committee at the time of the grant, 50% of each grant of
Restricted Stock granted pursuant to the Plan shall also be subject to the
Company’s achieving such financial hurdles, which may be stated with respect to
one or more Performance Measures, pre-determined by the Committee, as the
Committee may determine are applicable for each of the applicable three
years.
(iii) Except as
provided in the foregoing clause (i), below in this clause (iii), or in Section
13, the Grantee shall have, in respect of the Shares of Restricted Stock, all of
the rights of a shareholder of the Company, including the right to vote the
Shares, and, except as provided below, the right to receive any cash
dividends. The Committee may provide in the Award Agreement that cash
dividends on such Shares shall be held by the Company (unsegregated as a part of
its general assets) until the period of forfeiture lapses (and forfeited if the
underlying Shares are forfeited), and paid over to the Grantee as soon as
practicable after such period lapses (if not forfeited), or alternatively may
provide for other treatment of such dividends (including without limitation the
crediting of Phantom Shares in respect of dividends or other deferral
provisions). Certificates for Shares (not subject to restrictions
hereunder) shall be delivered to the Grantee or his or her designee promptly
after, and only after, the period of forfeiture shall lapse without forfeiture
in respect of such Shares of Restricted Stock.
(iv) Except if
otherwise provided in the applicable Award Agreement, and subject to clause (v)
below, if the Grantee has a Termination of Service by the Company and its
Subsidiaries for Cause, or by the Grantee for any reason, during the applicable
period of forfeiture, then (A) all Shares still subject to restriction shall
thereupon, and with no further action, be forfeited by the Grantee, and (B) the
Company shall pay to the Grantee as soon as practicable (and in no event more
than 30 days) after such termination an amount equal to the lesser of (x) the
amount paid by the Grantee for such forfeited Restricted Stock as contemplated
by Section 6.1, and (y) the Fair Market Value on the date of termination of the
forfeited Restricted Stock.
(v) Subject
to the provisions of the Award Agreement, in the event the Grantee has a
Termination of Service on account of death or Disability or Retirement during
the applicable period of forfeiture, then restrictions under the Plan will
immediately lapse on all Restricted Stock granted to the applicable
Grantee.
7. PROVISIONS APPLICABLE TO
PHANTOM SHARES.
7.1 Grant of Phantom
Shares.
Subject
to the other terms of the Plan, the Committee shall, in its discretion as
reflected by the terms of the applicable Award Agreement: (i)
authorize the granting of Phantom Shares to key employees, directors and
consultants of the Company and its Subsidiaries (provided that Phantom Shares
may only be granted to individuals who provide direct services to the Company or
a Subsidiary if the Phantom Share Value is determined by reference to the excess
of the Fair Market Value over a base value) and (ii) determine or impose other
conditions to the grant of Phantom Shares under the Plan as it may deem
appropriate.
7.2 Term.
The
Committee may provide in an Award Agreement that any particular Phantom Share
shall expire at the end of a specified term.
7.3 Vesting.
Phantom
Shares shall vest as provided in the applicable Award Agreement. The
applicable Award Agreement may provide that the Phantom Shares will vest only if
the individual completes a specified period of employment or service and may
provide that the Phantom Shares will vest on the attainment of goals or
objectives stated with reference to one or more Performance
Measures.
7.4 Settlement of Phantom
Shares.
(a) Each
vested and outstanding Phantom Share shall be settled by the transfer to the
Grantee of one Share; provided that, the Committee at the time of grant may
provide that a Phantom Share may be settled (i) in cash at the applicable
Phantom Share Value, (ii) in cash or by transfer of Shares as elected by the
Grantee in accordance with procedures established by the Committee or (iii) in
cash or by transfer of Shares as elected by the Company.
(b) Each
Phantom Share shall be settled with a single-sum payment by the
Company.
(c) (i) The
Settlement Date with respect to a Grantee is the first day of the month after
the Phantom Shares vest in accordance with the applicable Award
Agreement.
(ii) Notwithstanding
Section 7.4(c)(i), the Committee may provide that distributions of Phantom
Shares can be elected at any time in those cases in which the Phantom Share
Value is determined by reference to the excess of the Fair Market Value on that
date over a base value (which shall not be less than the Fair Market Value of a
Share on the date of grant of the Phantom Share), rather than by reference to
unreduced Fair Market Value.
(d) Notwithstanding
the other provisions of this Section 7, in the event of a Change in Control, the
Settlement Date shall be the date of such Change in Control and all amounts due
with respect to Phantom Shares to a Grantee hereunder shall be paid as soon as
practicable (but in no event more than 30 days) after such Change in Control,
unless such Grantee elects otherwise in accordance with procedures established
by the Committee.
7.5 Other Phantom Share
Provisions.
(a) Rights to
payments with respect to Phantom Shares granted under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, garnishment, levy, execution, or other legal or
equitable process, either voluntary or involuntary; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or
garnish, or levy or execute on any right to payments or other benefits payable
hereunder, shall be void.
(b) A Grantee
may designate in writing, on forms to be prescribed by the Committee, a
beneficiary or beneficiaries to receive any payments payable after his or her
death and may amend or revoke such designation at any time. If no
beneficiary designation is in effect at the time of a Grantee’s death, payments
hereunder shall be made to the Grantee’s estate. If a Grantee with a
vested Phantom Share dies, such Phantom Share shall be settled and the Phantom
Share Value in respect of such Phantom Shares paid as soon as practicable (but
no later than 30 days) after the date of death to such Grantee’s beneficiary or
estate, as applicable.
(c) Each
Grantee’s right in the Phantom Shares is limited to the right to receive
payment, if any, as may herein be provided. The Phantom Shares do not
constitute Common Stock and shall not be treated as (or as giving rise to)
property or as a trust fund of any kind; provided, however, that the Company may
establish a mere bookkeeping reserve to meet its obligations hereunder or a
trust or other funding vehicle that would not cause the Plan to be deemed to be
funded for tax purposes or for purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended. The right of any Grantee of
Phantom Shares to receive payments by virtue of participation in the Plan shall
be no greater than the right of any unsecured general creditor of the
Company.
(d) Notwithstanding
any other provision of this Section 7, any fractional Phantom Share will be paid
out in cash at the Fair Market Value as of the Settlement Date.
(e) Nothing
contained in the Plan shall be construed to give any Grantee any rights with
respect to Shares or any ownership interest in the Company. Except as
may be provided in accordance with Section 8, no provision of the Plan shall be
interpreted to confer upon any Grantee any voting, dividend or derivative or
other similar rights with respect to any Phantom Share.
8. PROVISIONS APPLICABLE TO
DIVIDEND EQUIVALENT RIGHTS.
8.1 Grant of Dividend
Equivalent
Rights.
Subject
to the other terms of the Plan, the Committee shall, in its discretion as
reflected by the terms of the Award Agreements, authorize the granting of
Dividend Equivalent Rights to key employees, directors and consultants of the
Company and its Subsidiaries based on the dividends declared on Common Stock, to
be credited as of the dividend payment dates, during the period between the date
a Dividend Equivalent Right is granted, and the date the Dividend Equivalent
Right vests or expires, as determined by the Committee. Such Dividend
Equivalent Rights shall be converted to cash or additional Shares of Common
Stock by such formula and at such time and subject to such limitation as may be
determined by the Committee.
8.2 Certain
Terms.
(a) The term
of a Dividend Equivalent Right shall be set by the Committee in its
discretion.
(b) Unless
otherwise determined by the Committee, a Dividend Equivalent Right is
exercisable or payable only while the Participant is an employee, director or
consultant.
(c) Payment
of the amount determined in accordance with Section 8.1 shall be in cash, in
Common Stock or a combination of the both, as determined by the
Committee.
(d) The
Committee may provide that the Participant’s rights under the Dividend
Equivalent Rights are subject to such employment-related conditions or
conditions based on the attainment of goals or objectives stated with reference
to one or more Performance Measures as prescribed by the Committee in its
discretion.
(e) A
Dividend Equivalent Right shall be granted independently of other Awards, i.e., the Dividend Equivalent
Right shall be governed by its Award Agreement and the grant or payment of a
Dividend Equivalent Right shall not affect, or be affected by, the Participant’s
rights under any other Award.
9. OTHER STOCK-BASED
AWARDS
The Board
shall have the right to grant Other Stock-Based Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation
rights. A Participant’s rights under an Other Stock-Based Award shall
be subject to the terms and conditions prescribed by the Committee in its
discretion, including requirements related to continued employment or service
and the attainment of goals or objectives stated with reference to one or more
Performance Measures.
10. TAX
WITHHOLDING.
10.1 In
General.
The
Company shall be entitled to withhold from any payments or deemed payments any
amount of tax withholding determined by the Committee to be required by
law. Without limiting the generality of the foregoing, the Committee
may, in its discretion, require the Participant to pay to the Company at such
time as the Committee determines the amount that the Committee deems necessary
to satisfy the Company’s obligation to withhold federal, state or local income
or other taxes incurred by reason of (i) the exercise of any Option, (ii) the
lapsing of any restrictions applicable to any Restricted Stock, (iii) the
receipt of a distribution in respect of Phantom Shares or Dividend Equivalent
Rights or (iv) any other applicable income-recognition event (for example, an
election under Section 83(b) of the Code).
10.2 Share
Withholding.
(a) Upon
exercise of an Option or Other Stock-Based Award, the Participant may, if
approved by the Committee in its discretion, make a written election to have
Shares then issued withheld by the Company from the Shares otherwise to be
received, or to deliver previously owned Shares, in order to satisfy the
liability for such withholding taxes. In the event that the
Participant makes, and the Committee permits, such an election, the number of
Shares so withheld or delivered shall have an aggregate Fair Market Value on the
date of exercise sufficient to satisfy the applicable withholding
taxes. Where the exercise of an Option or Other Stock-Based Award
does not give rise to an obligation by the Company to withhold federal, state or
local income or other taxes on the date of exercise, but may give rise to such
an obligation in the future, the Committee may, in its discretion, make such
arrangements and impose such requirements as it deems necessary or
appropriate.
(b) Upon
lapsing of restrictions on Restricted Stock or an Other Stock-Based Award (or
other income-recognition event), the Participant may, if approved by the
Committee in its discretion, make a written election to have Shares withheld by
the Company from the Shares otherwise to be released from restriction, or to
deliver previously owned Shares (not subject to restrictions hereunder), in
order to satisfy the liability for such withholding taxes. In the
event that the Participant makes, and the Committee permits, such an election,
the number of Shares so withheld or delivered shall have an aggregate Fair
Market Value on the date of exercise sufficient to satisfy the applicable
withholding taxes.
(c) Upon the
making of a distribution in respect of Phantom Shares, Dividend Equivalent
Rights or Other Stock-Based Awards, the Participant may, if approved by the
Committee in its discretion, make a written election to have amounts (which may
include Shares) withheld by the Company from the distribution otherwise to be
made, or to deliver previously owned Shares (not subject to restrictions
hereunder), in order to satisfy the liability for such withholding
taxes. In the event that the Participant makes, and the Committee
permits, such an election, any Shares so withheld or delivered shall have an
aggregate Fair Market Value on the date of exercise sufficient to satisfy the
applicable withholding taxes.
10.3 Withholding
Required.
Notwithstanding
anything contained in the Plan or the Award Agreement to the contrary, the
Participant’s satisfaction of any tax-withholding requirements imposed by the
Committee shall be a condition precedent to the Company’s obligation as may
otherwise be provided hereunder to provide Shares to the Participant and to the
release of any restrictions as may otherwise be provided hereunder, as
applicable; and the applicable Option, Restricted Stock, Phantom Shares,
Dividend Equivalent Rights or Other Stock-Based Awards shall be forfeited upon
the failure of the Participant to satisfy such requirements with respect to, as
applicable, (i) the exercise of the Option, (ii) the lapsing of restrictions on
the Restricted Stock (or other income-recognition event) or (iii) distributions
in respect of any Phantom Share or Dividend Equivalent Right.
11. REGULATIONS AND
APPROVALS.
(a) The
obligation of the Company to sell Shares with respect to an Award granted under
the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining of
all such approvals by governmental agencies as may be deemed necessary or
appropriate by the Committee.
(b) The
Committee may make such changes to the Plan as may be necessary or appropriate
to comply with the rules and regulations of any government authority or to
obtain tax benefits applicable to an Award.
(c) Each
grant of Options, Restricted Stock, Phantom Shares (or issuance of Shares in
respect thereof) or Dividend Equivalent Rights (or issuance of Shares in respect
thereof) or Other Stock-Based Awards is subject to the requirement that, if at
any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the issuance of Options,
Shares of Restricted Stock, Phantom Shares, Dividend Equivalent Rights or Other
Stock-Based Awards or other Shares, no payment shall be made, or Phantom Shares
or Shares issued or grant of Restricted Stock or Other Stock-Based Award made,
in whole or in part, unless listing, registration, qualification, consent or
approval has been effected or obtained free of any conditions in a manner
acceptable to the Committee.
(d) In the
event that the disposition of stock acquired pursuant to the Plan is not covered
by a then current registration statement under the Securities Act, and is not
otherwise exempt from such registration, such Shares shall be restricted against
transfer to the extent required under the Securities Act, and the Committee may
require any individual receiving Shares pursuant to the Plan, as a condition
precedent to receipt of such Shares, to represent to the Company in writing that
such Shares are acquired for investment only and not with a view to distribution
and that such Shares will be disposed of only if registered for sale under the
Securities Act or if there is an available exemption for such
disposition.
(e) Notwithstanding
any other provision of the Plan, the Company shall not be required to take or
permit any action under the Plan or any Award Agreement which, in the good-faith
determination of the Company, would result in a material risk of a violation by
the Company of Section 13(k) of the Exchange Act.
12. INTERPRETATION AND
AMENDMENTS; OTHER RULES.
The
Committee may make such rules and regulations and establish such procedures for
the administration of the Plan as it deems appropriate. Without
limiting the generality of the foregoing, the Committee may (i) determine the
extent, if any, to which Options, Phantom Shares or Shares (whether or not
Shares of Restricted Stock), Dividend Equivalent Rights or Other Stock-Based
Awards shall be forfeited (whether or not such forfeiture is expressly
contemplated hereunder); (ii) interpret the Plan and the Award Agreements
hereunder, with such interpretations to be conclusive and binding on all persons
and otherwise accorded the maximum deference permitted by law; and (iii) take
any other actions and make any other determinations or decisions that it deems
necessary or appropriate in connection with the Plan or the administration or
interpretation thereof. In the event of any dispute or disagreement
as to the interpretation of the Plan or of any rule, regulation or procedure, or
as to any question, right or obligation arising from or related to the Plan, the
decision of the Committee shall be final and binding upon all
persons. Unless otherwise expressly provided hereunder, the
Committee, with respect to any grant, may exercise its discretion hereunder at
the time of the Award or thereafter. The Board may amend the Plan as
it shall deem advisable, except that no amendment may adversely affect a
Participant with respect to an Award previously granted unless such amendments
are required in order to comply with applicable laws; provided, however, that
the Plan may not be amended without shareholder approval in any case in which
amendment in the absence of shareholder approval would cause the Plan to fail to
comply with any applicable legal requirement or applicable exchange or similar
rule.
All
Awards made under this Plan are intended to comply with, or otherwise be exempt
from, Section 409A of the Code (“Section 409A”), after giving effect to the
exemptions in Treasury Regulation sections 1.409A-1(b)(3) through
(b)(12). This Plan and all Award Agreements shall be administered,
interpreted and construed in a manner consistent with Section
409A. If any provision of this Plan or any Award Agreement is found
not to comply with, or otherwise not be exempt from, the provisions of Section
409A, it shall be modified and given effect, in the sole discretion of the
Committee and without requiring the Participant’s consent, in such manner as the
Committee determines to be necessary or appropriate to comply with, or
effectuate an exemption from, Section 409A. Each payment under an
Award granted under this Plan shall be treated as a separate identified payment
for purposes of Section 409A.
If a
payment obligation under an Award or an Award Agreement arises on account of the
Participant’s termination of employment and such payment obligation constitutes
“deferred compensation” (as defined under Treasury Regulation section
1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation
sections 1.409A-1(b)(3) through (b)(12)), it shall be payable only after the
Participant’s “separation from service” (as defined under Treasury Regulation
section 1.409A-1(h)); provided, however, that if the Participant is a “specified
employee” (as defined under Treasury Regulation section 1.409A-1(i)), any such
payment that is scheduled to be paid within six months after such separation
from service shall accrue without interest and shall be paid on the first day of
the seventh month beginning after the date of the Participant’s separation from
service or, if earlier, within fifteen days after the appointment of the
personal representative or executor of the Participant’s estate following the
Participant’s death.
13. CHANGES IN CAPITAL
STRUCTURE.
(a) If (i)
the Company or its Subsidiaries shall at any time be involved in a merger,
consolidation, dissolution, liquidation, reorganization, exchange of shares,
sale of all or substantially all of the assets or stock of the Company or its
Subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock
split, reverse stock split, stock combination, reclassification,
recapitalization or other similar change in the capital structure of the Company
or its Subsidiaries, or any distribution to holders of Common Stock other than
cash dividends, shall occur or (iii) any other event shall occur which in the
judgment of the Committee necessitates action by way of adjusting the terms of
the outstanding Awards, then:
(x) the
maximum aggregate number of Shares which may be issued pursuant to Awards under
the Plan and the maximum aggregate number of shares which may be granted
pursuant to Awards to any individual shall be appropriately adjusted by the
Committee in its discretion; and
(y) the
Committee may take any such action as in its judgment shall be necessary to
maintain the Participants' rights hereunder (including under the Award
Agreements) so that they are substantially proportionate to the rights existing
in such Awards, prior to such event, including, without limitation, adjustments
in (A) the number of Options, Phantom Shares, Dividend Equivalent Rights or
Other Stock-Based Awards granted, (B) the number and kind of shares or other
property to be distributed in respect of Awards, (C) the Option Price and
Phantom Share Value, and (D) performance-based criteria established in
connection with Awards; provided that, in the discretion of the Committee, the
foregoing clause (D) may also be applied in the case of any event relating to a
Subsidiary if the event would have been covered under this Section 13(a) had the
event related to the Company.
(b) Any
Shares or other securities distributed to a Grantee with respect to Restricted
Stock or otherwise issued in substitution of Restricted Stock shall be subject
to the restrictions and requirements imposed by Section 6, including depositing
the certificates therefor with the Company together with a stock power and
bearing a legend as provided in Section 6.2(a).
(c) If the
Company shall be consolidated or merged with another corporation or other
entity, each Grantee who has received Restricted Stock that is then subject to
restrictions imposed by Section 6.3(a) may be required to deposit with the
successor corporation the certificates for the stock or securities or the other
property that the Grantee is entitled to receive by reason of ownership of
Restricted Stock in a manner consistent with Section 6.2(b), and such stock,
securities or other property shall become subject to the restrictions and
requirements imposed by Section 6.3(a), and the certificates therefor or other
evidence thereof shall bear a legend similar in form and substance to the legend
set forth in Section 6.2(a).
(d) If a
Change in Control shall occur, then the Committee may make such adjustments as
it, in its discretion, determines are necessary or appropriate in light of the
Change in Control, provided that the Committee determines that such adjustments
do not have an adverse economic impact on the Participant as determined at the
time of the adjustments.
(e) The
judgment of the Committee with respect to any matter referred to in this Section
13 shall be conclusive and binding upon each Participant without the need for
any amendment to the Plan.
14. MISCELLANEOUS.
14.1 No Rights to Employment or
Other Service.
Nothing
in the Plan or in any grant made pursuant to the Plan shall confer on any
individual any right to continue in the employ or other service of the Company
or its Subsidiaries or interfere in any way with the right of the Company or its
Subsidiaries and its shareholders to terminate the individual’s employment or
other service at any time.
14.2 Right of First Refusal;
Right of Repurchase.
At the
time of grant, the Committee may provide in connection with any grant made under
the Plan that Shares received hereunder shall be subject to a right of first
refusal pursuant to which the Company shall be entitled to purchase such Shares
in the event of a prospective sale of the Shares, subject to such terms and
conditions as the Committee may specify at the time of grant or (if permitted by
the Award Agreement) thereafter, and to a right of repurchase, pursuant to which
the Company shall be entitled to purchase such Shares at a price determined by,
or under a formula set by, the Committee at the time of grant or (if permitted
by the Award Agreement) thereafter.
14.3 No Fiduciary
Relationship.
Nothing
contained in the Plan (including without limitation Sections 7.5(c) and 8.4(b),
and no action taken pursuant to the provisions of the Plan, shall create or
shall be construed to create a trust of any kind, or a fiduciary relationship
between the Company or its Subsidiaries, or their officers or the Committee, on
the one hand, and the Participant, the Company, its Subsidiaries or any other
person or entity, on the other.
14.4 Notices.
All
notices under the Plan shall be in writing, and if to the Company, shall be
delivered to the Board or mailed to its principal office, addressed to the
attention of the Board; and if to the Participant, shall be delivered
personally, sent by facsimile transmission or mailed to the Participant at the
address appearing in the records of the Company. Such addresses may
be changed at any time by written notice to the other party given in accordance
with this Section 14.4.
14.5 Exculpation and
Indemnification.
The
Company shall indemnify and hold harmless the members of the Board and the
members of the Committee from and against any and all liabilities, costs and
expenses incurred by such persons as a result of any act or omission to act in
connection with the performance of such person’s duties, responsibilities and
obligations under the Plan, to the maximum extent permitted by law.
14.6 Captions.
The use
of captions in this Plan is for convenience. The captions are not
intended to provide substantive rights.
14.7 Governing
Law.
THE PLAN
SHALL BE GOVERNED BY THE LAWS OF FLORIDA WITHOUT REFERENCE TO PRINCIPLES OF
CONFLICT OF LAWS.