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Section 1: S-8 (FORM S-8)

 

As filed with the Securities and Exchange Commission on May 14, 2020

Registration No. 333-

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 

 

 

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933 

 

 

 

Walker & Dunlop, Inc.

(Exact name of registrant as specified in its charter)

 

Maryland 80-0629925
(State or other jurisdiction of incorporation or
organization)
(I.R.S. Employer Identification No.)

 

7501 Wisconsin Avenue

Suite 1200E

Bethesda, MD 20814

(Address of Principal Executive Offices) (Zip Code)

 

WALKER & DUNLOP, INC. 2020 EQUITY INCENTIVE PLAN

(Full title of the plan)

 

William M. Walker

Chairman and Chief Executive Officer

Walker & Dunlop, Inc.

7501 Wisconsin Avenue

Suite 1200E

Bethesda, MD 20814

(301) 215-5500

(Name and address of agent for service)

(Telephone number, including area code, of agent for service)

 

Copy to:

William J. Cernius

Julia A. Thompson

Latham & Watkins LLP

555 Eleventh Street N.W., Suite 1000

Washington, D.C. 20004

(202) 637-2200

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer x   Accelerated filer o  
  Non-accelerated filer ¨   Smaller reporting company o  
        Emerging growth company o  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o

 

CALCULATION OF REGISTRATION FEE

 

Title of securities to be registered   Amount to be
registered (1)
  Proposed
maximum
offering
price
per share (2)
  Proposed
maximum
aggregate
offering
price (2)
  Amount of
registration
fee
Common Stock, $0.01 par value per share   2,000,000   $39.48   $78,960,000.00   $10,249.01

 

 

(1)Represents the number of shares of the registrant’s common stock, par value $0.01 per share (the “Common Stock”) reserved for issuance under the Walker & Dunlop, Inc. 2020 Equity Incentive Plan (the “Plan”). Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the “Securities Act”), this registration statement (“Registration Statement”) shall also cover any additional shares of Common Stock to be offered or sold pursuant to the Plan and shares that become issuable under the Plan by reason of certain corporate transactions or events, including any stock dividend, stock split, recapitalization or any other similar transaction or adjustment of the registrant’s outstanding shares of Common Stock.

 

(2)Estimated in accordance with Rule 457(c) and (h) under the Securities Act solely for the purpose of calculating the registration fee. The proposed maximum offering price per share is based upon the average of the high and low prices per share of Common Stock as reported on the New York Stock Exchange on May 7, 2020.

 

 

 

 

 

 

EXPLANATORY NOTE

 

On March 19, 2020, the Board of Directors of the Company approved the Plan, subject to the approval of the Company’s stockholders. On May 14, 2020, the Company’s stockholders approved the Plan. The Company is filing this registration statement to register an additional 2,000,000 shares of Common Stock for issuance pursuant to the Plan, which constitutes an amendment and restatement of the Walker & Dunlop, Inc. 2015 Equity Incentive Plan.

 

Pursuant to General Instruction E to Form S-8, the contents of the earlier registration statements on Form S-8 concerning the Equity Incentive Plan filed with the SEC on June 4, 2015 (File No. 333-204722), August 30, 2012 (File No. 333-183635) and December 16, 2010 (File No. 333-171205) are incorporated herein by reference, except to the extent supplemented, amended or superseded by the information set forth herein.

 

PART I

 

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

Item 1.Plan Information.

 

Not required to be filed with this Registration Statement.

 

Item 2.Registrant Information and Employee Plan Annual Information.

 

Not required to be filed with this Registration Statement.

 

PART II

 

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3.Incorporation of Documents by Reference.

 

The following documents filed by the Company with the Securities and Exchange Commission (the “Commission”) are hereby incorporated by reference in this Registration Statement: 

 

·the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on February 26, 2020, including the information specifically incorporated by reference into the Company’s Annual Report on Form 10-K from the Company’s Definitive Proxy Statement on Schedule 14A, filed with the Commission on March 27, 2020;

 

·the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, filed with the Commission on May 6, 2020;

 

·the Company’s Current Report on Form 8-K, filed with the Commission on April 29, 2020; and

 

·the description of the Company’s Common Stock contained in the Company’s Registration Statement on Form S-3, filed with the Commission on October 4, 2012, including any subsequently filed amendments and reports updating such description.

 

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, after the date hereof (excluding any documents or portions of such documents that are furnished under Item 2.02 or Item 7.01 of a Current Report on Form 8-K and any exhibits included with such Items), and prior to the filing of a post-effective amendment that indicates that all the securities offered hereby have been sold or that deregisters the securities offered hereby then remaining unsold, shall also be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents.

 

 

 

 

Any statement contained in this Registration Statement or in a document incorporated or deemed to be incorporated by reference in this Registration Statement will be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Registration Statement modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

 

Item 4. Description of Securities.

 

Not required to be filed with this Registration Statement.

 

Item 5. Interests of Named Experts and Counsel.

 

Not applicable.

 

Item 6.Indemnification of Directors and Officers.

 

Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty that is established by a final judgment and is material to the cause of action. The Company’s charter contains a provision that eliminates our directors’ and officers’ liability to the maximum extent permitted by Maryland law.

 

The Maryland General Corporation Law requires a Maryland corporation (unless its charter provides otherwise, which the Company’s charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. The Maryland General Corporation Law permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to or in which they may be made or threatened to be made a party or witness by reason of their service in those or other capacities unless it is established that: (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith; or (ii) was the result of active and deliberate dishonesty; (b) the director or officer actually received an improper personal benefit in money, property or services; or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, a Maryland corporation may not indemnify for an adverse judgment in a suit by or on behalf of the corporation or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification, and then only for expenses.

 

In addition, the Maryland General Corporation Law permits a Maryland corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of: (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and (b) a written undertaking by the director or officer or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that he or she did not meet the standard of conduct.

 

The Company’s charter and bylaws obligate it to indemnify, to the maximum extent permitted by Maryland law, any present or former director or officer of the Company or any individual who, while a director or officer of the Company and at the Company’s request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan, limited liability company or any other enterprise as a director, officer, partner or trustee and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity from and against any claim or liability to which that individual may become subject or which that individual may incur by reason of his or her service in that capacity, and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding.

 

 

 

 

The Company has entered into indemnification agreements with each of its executive officers and directors whereby the Company has agreed to indemnify such executive officers and directors to the fullest extent permitted by Maryland law against all expenses and liabilities, subject to limited exceptions.

 

Item 7. Exemption from Registration Claimed.

 

Not applicable.

 

Item 8.Exhibits.

 

Exhibit
Number
  Description
     
4.1   Articles of Amendment and Restatement of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 4 to the Company's Registration Statement on Form S-1 (File No. 333-168535) filed on December 1, 2010).
     
4.2   Specimen Common Stock Certificate of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on September 30, 2010).
     
5.1   Opinion of Venable LLP.
     
23.1   Consent of KPMG LLP.
     
23.2   Consent of Venable LLP (included in Exhibit 5.1).
     
24.1   Power of Attorney (included on the signature page of this Registration Statement).
     
99.1   Walker & Dunlop, Inc. 2020 Equity Incentive Plan (incorporated by reference to Annex A to the Company’s Definitive Proxy Statement on Schedule 14A, filed on March 27, 2020).
     
99.2   Form of Non-Qualified Stock Option Agreement under 2020 Equity Incentive Plan.
     
99.3   Form of Performance Stock Unit Agreement under 2020 Equity Incentive Plan.
     
99.4   Form of Restricted Stock Agreement under 2020 Equity Incentive Plan.
     
99.5   Form of Restricted Stock Agreement (Directors) under 2020 Equity Incentive Plan.
     
99.6   Management Deferred Stock Unit Purchase Matching Program.
     
99.7   Form of Restricted Stock Unit Agreement (Management Deferred Stock Unit Purchase Matching Program) under 2020 Equity Incentive Plan.
     
99.8   Form of Deferred Stock Unit Agreement (Management Deferred Stock Unit Purchase Matching Program) under 2020 Equity Incentive Plan.
     
99.9   Form of Non-Qualified Stock Option Transfer Agreement under 2020 Equity Incentive Plan.

 

 

 

 

Item 9.Undertakings.

 

(a)           The undersigned registrant hereby undertakes:

 

(1)           To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

 

(i)            to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii)           to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of

securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and

 

(iii)          to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

 

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

 

(2)           That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(b)           The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c)           Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on the 14th day of May, 2020.

 

  Walker & Dunlop, Inc.
   
  BY /s/ William M. Walker
    William M. Walker
    Chairman and Chief Executive Officer

 

 

 

 

POWER OF ATTORNEY

 

We, the undersigned directors and officers of Walker & Dunlop, Inc., a Maryland corporation, do hereby constitute and appoint Stephen P. Theobald, Executive Vice President and Chief Financial Officer and Richard M. Lucas, the Executive Vice President, General Counsel and Secretary, and each and either of them, our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, to do any and all acts and things in our names and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our name in the capacities indicated below, which said attorneys and agents may deem necessary or advisable to enable said corporation to comply with the Securities Act and any rules, regulations and requirements of the SEC, in connection with this registration statement, or any registration statement for this offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act, including specifically, but without limitation, any and all amendments (including post-effective amendments) hereto; and we hereby ratify and confirm all that said attorneys and agents, or either of them, shall do or cause to be done by virtue thereof.

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.

 

Signature   Title   Date
         
/s/ William M. Walker   Chairman and Chief Executive Officer
(Principal Executive Officer)
  May 13, 2020
William M. Walker      
         
/s/ Alan J. Bowers   Lead Director   May 14, 2020
Alan J. Bowers        
         
/s/ Ellen D. Levy   Director   May 11, 2020
Ellen D. Levy        
         
/s/ Michael D. Malone   Director   May 14, 2020
Michael D. Malone        
         
/s/ John Rice   Director   May 14, 2020
John Rice        
         
/s/ Dana L. Schmaltz   Director   May 14, 2020
Dana L. Schmaltz        
         
/s/ Howard W. Smith, III   President and Director   May 12, 2020
Howard W. Smith, III      
         
/s/ Michael J. Warren   Director   May 12, 2020
Michael J. Warren      
         
/s/ Stephen P. Theobald   Executive Vice President and Chief
Financial Officer (Principal Financial
  May 14, 2020
Stephen P. Theobald      
    Officer and Principal Accounting Officer)    

 

 

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Section 2: EX-5.1 (EXHIBIT 5.1)

 

Exhibit 5.1

 

 

May 14, 2020

 

Walker & Dunlop, Inc.

7501 Wisconsin Avenue, Suite 1200E

Bethesda, Maryland 20814

 

Re:    Registration Statement on Form S-8

 

Ladies and Gentlemen:

 

We have served as Maryland counsel to Walker & Dunlop, Inc., a Maryland corporation (the “Company”), in connection with certain matters of Maryland law arising out of the issuance of up to 2,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), pursuant to the Walker & Dunlop, Inc. 2020 Equity Incentive Plan (the “Plan”), covered by the above-referenced Registration Statement, and all amendments thereto (the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).

 

In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):

 

1.       The Registration Statement in the form in which it was transmitted to the Commission under the 1933 Act;

 

2.       The charter of the Company (the “Charter”), certified by the State Department of Assessments and Taxation of Maryland (the “SDAT”);

 

3.       The Amended and Restated Bylaws of the Company, certified as of the date hereof by an officer of the Company;

 

4.       A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;

 

5.       Resolutions adopted by the Board of Directors of the Company (the “Board”) relating to, among other matters, the approval of the Plan and the issuance of the Shares (the “Resolutions”), certified as of the date hereof by an officer of the Company;

 

6.       The Plan;

 

 

 

 

 

Walker & Dunlop, Inc.

May 14, 2020

Page 2

 

7.       The report of the Inspector of Elections certifying as to the quorum and approval of the Plan at the 2020 annual meeting of stockholders of the Company held on May 14, 2020, certified as of the date hereof by an officer of the Company;

 

8.       A certificate executed by an officer of the Company, dated as of the date hereof; and

 

9.       Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.

 

In expressing the opinion set forth below, we have assumed the following:

 

1.       Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.

 

2.       Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.

 

3.       Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.

 

4.       All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.

 

5.       Upon the issuance of any Shares, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the Charter.

 

6.       Each option, award, right other security exercisable or exchangeable for a Plan Share pursuant to the Plan (each, an “Award”) will be duly authorized and validly granted in accordance with the Plan, and each Award will be exercised or exchanged in accordance with the terms of the Plan and such Award, including any option or award agreement entered into in connection therewith.

 

 

 

 

 

Walker & Dunlop, Inc.

May 14, 2020

Page 3

 

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:

 

1.       The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.

 

2.       The issuance of the Shares pursuant to the Plan has been duly authorized and, when and to the extent issued and delivered by the Company in accordance with the Registration Statement, the Plan, the Resolutions, any applicable Award and any other resolutions adopted by the Board or a duly authorized committee thereof relating thereto, the Shares will be validly issued, fully paid and nonassessable.

 

The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning United States federal law or the laws of any other jurisdiction. We express no opinion as to the applicability or effect of federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein is subject to the effect of any judicial decision which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

 

The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.

 

 

 

 

 

Walker & Dunlop, Inc.

May 14, 2020

Page 4

 

This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.

 

  Very truly yours,
   
  /s/ Venable LLP

 

 

 

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Section 3: EX-23.1 (EXHIBIT 23.1)

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

The Board of Directors

Walker & Dunlop, Inc.:

 

We consent to the incorporation by reference in this registration statement on Form S-8 of Walker & Dunlop, Inc. of our reports dated February 26, 2020, with respect to the consolidated balance sheets of Walker & Dunlop, Inc. and subsidiaries as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes, and the effectiveness of internal control over financial reporting as of December 31, 2019, which reports appear in the December 31, 2019 annual report on Form 10-K of Walker & Dunlop, Inc.

 

/s/ KPMG LLP

 

McLean, Virginia

May 14, 2020

 

 

 

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Section 4: EX-99.2 (EXHIBIT 99.2)

Exhibit 99.2 

 

WALKER & DUNLOP, INC.

2020 EQUITY INCENTIVE PLAN

 

NON-QUALIFIED STOCK OPTION AGREEMENT

COVER SHEET

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants an option (the “Option”) to purchase shares of the Company’s common stock, par value $0.01 per share (the “Stock”), to the Grantee named below, subject to the vesting conditions set forth below. Additional terms and conditions of the Option are set forth on this cover sheet and in the attached Non-Qualified Stock Option Agreement (collectively, the “Agreement”), in the Company’s 2020 Equity Incentive Plan (as amended from time to time, the “Plan”), and in any written employment or other written compensatory arrangement between you and the Company or any Affiliate (if any, the “Employment Agreement”).

 

 

Grant Date:

   

 

Name of Grantee:

   

 

Grantee’s Social Security Number:

   

 

Number of Shares of Stock Covered by the Option:

   

 

Option Price per Share:

   

Vesting Schedule:

 

 

 

 

 

 

 

 

If you continue in Service on each applicable vesting date, the Option shall vest in equal installments on each vesting date set forth below; provided, however, that any fractional shares shall be rounded up to the nearest whole share on the first and, if applicable, the last vesting date: 

 

You agree to all of the terms and conditions described in this Agreement, in the Plan (a copy of which is also posted), and in the Employment Agreement unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

 

Attachment

This is not a stock certificate or a negotiable instrument.

 

 

 

WALKER & DUNLOP, INC.

2020 EQUITY INCENTIVE PLAN

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

Non-qualified Option  

This Agreement evidences an award of an Option exercisable for that number of shares of Stock set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement, in the Plan, and on the cover sheet. This Option is not intended to be an incentive stock option under Section 422 of the Code and will be interpreted accordingly.

 

Transfer of Option  

Except as provided in the following paragraph, during your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the Option. Other than by will or the laws of descent and distribution, the Option may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the Option be made subject to execution, attachment, or similar process. If you attempt to do any of these things, you will immediately and automatically forfeit your Option.

 

Notwithstanding these restrictions on transfer but subject to such limitations as the Chief Executive Officer of the Company or the General Counsel of the Company may impose, you may transfer all or part of the vested portion of the Option to a Family Member, subject to the terms and conditions set forth in the Plan and a Non-Qualified Stock Option Transfer Agreement in the form approved by the Committee, to be entered into between you, the Company and such trust.

 

Vesting  

Your Option shall vest in accordance with the vesting schedule set forth on the cover sheet of this Agreement, so long as you continue in Service on each applicable vesting date set forth on the cover sheet, and is exercisable only as to its vested portion.

 

No additional portion of your Option shall vest after your Service has terminated for any reason.

 

 

2

 

 

Change in Control  

Notwithstanding the vesting schedule set forth above, upon the consummation of a Change in Control, this Option will become 100% vested (i) if it is not assumed, or equivalent options are not substituted for the options, by the Company or its successor, or (ii) if assumed or substituted for, upon your Involuntary Termination within the twelve (12)-month period (or for the period of time or lack of a period of time otherwise set forth in the Employment Agreement), following the consummation of the Change in Control.

 

Involuntary Termination” means termination of your Service by reason of (i) your involuntary dismissal by the Company or its successor for reasons other than Cause; or (ii) your voluntary resignation for Good Reason (and without Cause) as defined in the Employment Agreement, or if none, then following (x) the assignment of substantial duties or responsibilities inconsistent with your position at the Company, or any other action by the Company which results in a substantial diminution of your duties or responsibilities other than any such reduction which is remedied by the Company within thirty (30) days of receipt of written notice from you; (y) a requirement that you work principally from a location that is twenty (20) miles further from your residence than the Company’s principal place of business on the date of this Agreement; or (z) a substantial reduction in your aggregate base salary and other compensation taken as a whole, excluding any reductions caused by the failure to achieve performance targets. To qualify as an “Involuntary Termination,” you must provide notice to the Company or its successor of any of the foregoing occurrences within ninety (90) days of the initial occurrence, and the Company shall have thirty (30) days thereafter to remedy such occurrence. In addition, you must terminate your Service at a time agreed reasonably with the Company, but in any event within one hundred twenty (120) days from the initial occurrence of any of the foregoing events.

 

Forfeiture of Unvested Options / Term  

Unless the termination of your Service triggers accelerated vesting or other treatment of your Option pursuant to the terms of this Agreement, the Plan, or any Employment Agreement, you will automatically and immediately forfeit to the Company the unvested portion of the Option in the event your Service terminates for any reason.

 

Your Option will expire in any event at the close of business at Company headquarters on the tenth (10th) anniversary of the Grant Date, as shown on the cover sheet. Your Option will expire earlier if your Service terminates, as described below.

 

Expiration of Vested Options After Service Terminates  

If your Service terminates for any reason, other than death, Disability, or Cause, then the vested portion of your Option will expire at the close of business at Company headquarters on the ninetieth (90th) day after your termination date.

 

If your Service terminates because of your death or Disability, or if you die during the ninety (90)-day period after your termination for any reason (other than Cause), then the vested portion of your Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of your death or termination for Disability. During that twelve (12)-month period, your estate or heirs may exercise the vested portion of your Option.

 

If your Service is terminated for Cause, then you shall immediately forfeit all rights to your entire Option (both vested and unvested portions), and the Option shall immediately and automatically expire.

 

 

3

 

 

Forfeiture of Rights  

If you should take actions in violation or breach of, or in conflict with, any non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any Affiliate, any confidentiality obligation with respect to the Company or any Affiliate, otherwise in competition with the Company or any Affiliate, any Company or Affiliate policy or procedure, any other agreement, or any other obligation to the Company or any Affiliate, the Company has the right to cause an immediate forfeiture of your rights to this Option, and the Option shall immediately and automatically expire.

 

In addition, if you have exercised any portion of the Option during the two (2)-year period prior to your actions, you will owe the Company a cash payment (or forfeiture of shares of Stock) in an amount determined as follows: (i) for any shares of Stock that you have sold prior to receiving notice from the Company, the amount will be the proceeds received from the sale(s), less the Option Price, and (ii) for any shares of Stock that you still own, the amount will be the number of shares of Stock owned times the Fair Market Value of the shares of Stock on the date you receive notice from the Company, less the Option Price (provided, that the Company may require you to satisfy your payment obligations hereunder either by forfeiting and returning to the Company the shares or any other shares of Stock or making a cash payment or a combination of these methods as determined by the Company in its sole discretion).

 

Leaves of Absence  

For purposes of this Agreement, your Service does not terminate when you go on a bona fide leave of absence that was approved by your employer (Walker & Dunlop, LLC or any Affiliate of the Company that directly employs you) in writing if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by Applicable Laws. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.

 

Your employer may determine, in its discretion, which leaves count for this purpose and when your Service terminates for all purposes under the Plan in accordance with the provisions of the Plan. Notwithstanding the foregoing, the Company may determine, in its discretion, that a leave counts for this purpose even if your employer does not agree.

 

 

4

 

 

Notice of Exercise   The Option may be exercised, in whole or in part, to purchase a whole number of vested shares of Stock of not less than one hundred (100) shares, unless the number of vested shares purchased is the total number available for purchase under the Option, by following the procedures set forth in the Plan and in this Agreement.   When you wish to exercise this Option, you must exercise in a manner required or permitted by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.  
     
Form of Payment  

When you exercise your Option, you must include payment of the aggregate Option Price for the shares you are purchasing. Payment may be made in one (or a combination) of the following forms:  

 

    Cash, your personal check, a cashier’s check, a money order, or another cash equivalent acceptable to the Company.  

 

     Shares of Stock which are owned by you and which are surrendered to the Company, including through the withholding of shares otherwise issuable upon exercise. The Fair Market Value of the shares as of the effective date of the Option exercise will be applied to the Option Price.  

 

     By delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Option Price and any withholding taxes.

     
  Evidence of Issuance     The issuance of the shares upon exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates.  
     
Withholding   You agree as a condition of this Option that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the Option exercise or the sale of Stock acquired under this Option. In the event that the Company or any Affiliate, as applicable, determines that any federal, state, local, or foreign tax or withholding payment is required relating to the exercise of this Option or the sale of Stock arising from this Option, the Company or any Affiliate, as applicable, shall have the right to require such payments from you or withhold such amounts from other payments due to you from the Company or any Affiliate, as applicable or withhold the delivery of vested shares of Stock otherwise deliverable under this Agreement.  

 

5

 

 

Notice and Non-Solicitation  

The following notice and non-solicitation provisions will apply to you unless you have entered into an Employment Agreement that has more restrictive notice and non-solicitation provisions (in which case, the more restrictive provisions in such Employment Agreement will apply).

 

You agree as a condition of this Option that in the event you decide to leave the Company or any Affiliate for any reason, you will provide the Company or the Affiliate with thirty (30) days’ prior notice of your departure (during which period, in the Company’s or an Affiliate’s sole discretion, you may be placed on paid leave), and you will not commence employment with anyone else during that period. For a period of ninety (90) days following the termination of your Service for any reason, you will not directly or indirectly solicit any employees of the Company or any Affiliate for employment or encourage any employee to leave the Company or any Affiliate.

 

Retention Rights  

This Agreement and this Option do not give you the right to be retained by the Company or any Affiliate in any capacity. Unless otherwise specified in an Employment Agreement, the Company or any Affiliate, as applicable, reserves the right to terminate your Service at the Company or an Affiliate at any time and for any reason.

 

 Stockholder Rights  

You (and your estate or heirs) have no rights as a stockholder with respect to the shares of Stock underlying the Option unless and until the shares of Stock underlying the Option have been issued upon exercise of your Option and either a certificate evidencing your Stock has been issued or an appropriate entry has been made on the Company’s books. No adjustments are made for dividends, distributions, or other rights if the applicable record date occurs before your certificate is issued (or an appropriate book entry is made), except as described in the Plan.

 

Corporate Activity  

Your Option shall be subject to the terms of any applicable agreement of merger, liquidation, or reorganization in the event the Company is subject to such corporate activity, consistent with Section 17 of the Plan.

 

Clawback  

This Option is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company “clawback” or recoupment policy or Applicable Laws that require the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy or Applicable Laws.

 

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, and you are subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly negligent in failing to prevent the misconduct, you shall reimburse the Company the amount of any payment in settlement of this Option earned or accrued during the twelve (12)-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

 

 

6

 

 

Applicable Law  

This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

The Plan  

The text of the Plan is incorporated into this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.

 

This Agreement, the Plan, and any Employment Agreement constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments, or negotiations concerning this Option are superseded; except that any written consulting, confidentiality, non-competition, non-solicitation, and/or severance agreement between you and the Company or an Affiliate, as applicable, shall supersede this Agreement with respect to its subject matter.

 

Data Privacy  

To administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting the Option, you give explicit consent to the Company to process any such personal data.

 

Electronic Delivery  

By accepting the Option, you consent to receive documents related to the Option by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.

 

Code Section 409A   The grant of the Option under this Agreement is intended to comply with Code Section 409A (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A.  Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty.    

 

By accepting this Agreement, you agree to all of the terms and conditions described above and in the Plan. In the event that any term of this Agreement conflicts with the terms of an Employment Agreement, the terms of such Employment Agreement shall supersede the conflicting terms herein.

 

 

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Section 5: EX-99.3 (EXHIBIT 99.3)

Exhibit 99.3

Walker & Dunlop, Inc.

2020 Equity Incentive Plan

 

Performance Stock Unit Agreement

COVER SHEET

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants performance stock units (the “Performance Stock Units”) relating to shares of the Company’s common stock, par value $0.01 per share (the “Stock”) to the Grantee named below, subject to the achievement of performance goals and vesting conditions set forth below. Additional terms and conditions of the Performance Stock Units are set forth on this cover sheet and in the attached Performance Stock Unit Agreement (together, the “Agreement”), in the Company’s 2020 Equity Incentive Plan (as amended from time to time, the “Plan”), and in any written employment or other written compensatory agreement between you and the Company or any Affiliate (if any, the “Employment Agreement”).

 

Grant Date:   
    
Name of Grantee:   
    
Threshold Number of Performance Stock Units:   
    
Target Number of Performance Stock Units:   
    
Maximum Number of Performance Stock Units:   
  
Performance Period:  ·       Beginning on _____ and
·       Ending on _____

 

You agree to all of the terms and conditions described in this Agreement, in the Plan (a copy of which is also posted), and in the Employment Agreement unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

 

Attachment
This is not a stock certificate or a negotiable instrument.

 

 

 

Walker & Dunlop, Inc.

2020 Equity Incentive Plan

 

Performance Stock Unit Agreement

 

Performance Stock Units  

This Agreement evidences an award of Performance Stock Units in the number set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement and the Plan.

 

Subject to your continued Service as set forth below, the number of shares of Stock, if any, that may be issued pursuant to the terms of this Agreement will be calculated based on the attainment, as determined by the Committee, of the performance goals described in Exhibit A to this Agreement (the “Performance Goals”) over the Performance Period set forth on the cover sheet, which number of shares of Stock may be equal to all or a portion, including none, of the Maximum Number of Performance Stock Units set forth on the cover sheet (the “Maximum Number”). If the Performance Goals are not achieved during the Performance Period, you will forfeit all of your unvested Performance Stock Units as of the end of the Performance Period, except as otherwise provided in this Agreement or as otherwise determined by the Committee. The Committee may revise the Performance Goals, in its discretion and/or provide that a greater portion of the Performance Stock Units will vest, up to the Maximum Number, even if the Performance Goals are not achieved.

 

Performance Stock Unit Transferability

 

 

 

  Your Performance Stock Units may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the Performance Stock Units be made subject to execution, attachment, or similar process.  If you attempt to do any of these things, you will immediately and automatically forfeit your Performance Stock Units.

Vesting

 

 

 

 

 

 

 

 

 

 

Your Performance Stock Units will vest on the date the Committee certifies the achievement of the Performance Goals following the close of the Performance Period (the “Certification Date”), and subject to your continued Service from the Grant Date through the Certification Date, but only to the extent that the Performance Goals have been satisfied. Promptly following the completion of the Performance Period (and no later than seventy (70) days following the end of the Performance Period), the Committee will review and determine (i) whether, and to what extent, the Performance Goals for the Performance Period have been achieved and (ii) the number of Performance Stock Units that will vest. Such determination will be final, conclusive, and binding. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Committee reserves the right to adjust the number of Performance Stock Units that will vest based on the achievement of the Performance Goals downward, including to zero, in its sole discretion.

 

 

2

 

 

 

 

 

 

Leaves of Absence

  

 

You will forfeit to the Company all of the unvested Performance Stock Units to the extent the specified Performance Goals have not been achieved, as determined by the Committee, effective as of the Certification Date, unless otherwise determined by the Committee.

 

For purposes of this Agreement, your Service does not terminate when you go on a bona fide leave of absence that was approved by your employer (Walker & Dunlop, LLC or any Affiliate of the Company that directly employs you) in writing if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by Applicable Laws. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.

 

Your employer may determine, in its discretion, which leaves count for this purpose and when your Service terminates for all purposes under the Plan in accordance with the provisions of the Plan. Notwithstanding the foregoing, the Company may determine, in its discretion, that a leave counts for this purpose even if your employer does not agree.

 

Vesting upon Termination of Service  

Death or Disability. If your Service terminates during the Performance Period as a result of your death or Disability, your Performance Stock Units will vest as to the Target Number of Performance Stock Units set forth on the cover sheet on the effective date of your termination of Service. If your Service terminates following the end of the Performance Period but prior to the Certification Date, your Performance Stock Units will be eligible to vest as provided in “Vesting” above as if your Service had not terminated, effective as of the Certification Date.

 

Termination without Cause or for Good Reason. If your Service terminates prior to the Certification Date because of your involuntary termination of Service by the Company without Cause or your voluntary termination for Good Reason (as defined below), you will be eligible to vest in a pro rata portion of the Performance Stock Units as provided in “Vesting” above as if your Service had not terminated, which pro rata portion will be calculated by multiplying the total number of the Performance Stock Units that vest based on actual performance, as determined by the Committee, by a fraction, the numerator of which equals the number of days that you provided Service during the Performance Period and the denominator of which equals the total number of days in the Performance Period, effective as of the Certification Date.

 

Other Terminations. If, prior to the Certification Date, you incur a termination of Service for any reason other than those specified above, whether voluntary or involuntary and prior to a Change in Control, you will forfeit to the Company all of the unvested portion of the Performance Stock Units on the date of your termination of Service.

 

 

3

 

 

   

For purposes of this Agreement, unless otherwise provided in the Employment Agreement, “Good Reason” for termination will mean, without your consent: (i) the assignment to you of substantial duties or responsibilities inconsistent with your position at the Company, or any other action by the Company that results in a substantial diminution of your duties or responsibilities other than any such reduction that is remedied by the Company within thirty (30) days of receipt of written notice thereof from you; (ii) a requirement that you work principally from a location that is thirty-five (35) miles further from your residence than your principal place of employment as of the Grant Date; (iii) a ten percent or greater reduction in your aggregate base salary and other compensation (including any target bonus amount and/or retirement plan, welfare plans and fringe benefits) taken as a whole, excluding any reductions caused by the failure to achieve performance targets; or (iv) any material breach by the Company of your Employment Agreement, if any. Good Reason will not exist pursuant to any subsection in the foregoing sentence unless (A) you have delivered written notice to the Company or its successor within ninety (90) days of the occurrence of the event constituting Good Reason, and (B) the Company fails to remedy the circumstances giving rise to your notice within thirty (30) days of receipt of notice. In addition, you must terminate your Service for Good Reason at a time agreed reasonably with the Company, but in any event within one hundred fifty (150) days from the occurrence of the event constituting Good Reason. For purposes of Good Reason, the Company will be defined to include any successor to the Company that has assumed the obligations of the Company through merger, acquisition, stock purchase, asset purchase, or otherwise.

 

Change in Control  

Notwithstanding the vesting schedule set forth above, upon the consummation of a Change in Control during the Performance Period, you will vest in a number of Performance Stock Units equal to the greater of (i) the number of Performance Stock Units that would vest based on actual performance through a date reasonably proximal to the date of the consummation of the Change in Control, as determined by the Committee in its sole discretion, against the Performance Goals, which Performance Goals shall be adjusted in a manner determined by the Committee to reflect any shortening of the Performance Period that results from the Change in Control, and that level of performance will be treated as achieved immediately prior to the Change in Control, or (ii) the Target Number of Performance Stock Units set forth on the cover sheet.  

 

Delivery  

Delivery of the shares of Stock represented by your vested Performance Stock Units will be made as soon as practicable after the date on which your Performance Stock Units vest and, in any event, by no later than March 15th of the calendar year after your Performance Stock Units vest.

 

 

4

 

 

Evidence of Issuance  

The issuance of the shares of Stock with respect to the Performance Stock Units will be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates.

 

Withholding  

In the event that the Company or any Affiliate determines that any federal, state, local, or foreign tax or withholding payment is required relating to the Performance Stock Units, or the issuance of shares of Stock with respect to the Performance Stock Units, you have the right to (i) tender a cash payment, (ii) enter into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares of Stock to be delivered in connection with the Performance Stock Units to satisfy withholding obligations and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the withholding obligations directly to the Company or any Affiliate, or (iii) unless otherwise determined by the Company (which shall mean the Committee if you are subject to Section 16(b) of the Exchange Act), have the Company withhold the delivery of vested shares of Stock otherwise deliverable under this Agreement to meet such obligations; provided that the shares of Stock so withheld will have an aggregate Fair Market Value not exceeding the maximum statutory tax rates applicable in your jurisdiction; provided, that, such shares shall be rounded up to the nearest whole share of Stock to the extent rounding up to the nearest whole share does not result in the liability classification of the Performance Stock Units under generally accepted accounting principles in the United States of America. In the event you fail to make arrangements for such withholding payment in a manner that is reasonably acceptable to the Company, the Company shall withhold shares of Stock as provided in clause (iii) of this paragraph.

 

Notice and Non-Solicitation  

The following notice and non-solicitation provisions will apply to you unless you have entered into an Employment Agreement that has more restrictive notice and non-solicitation provisions (in which case, the more restrictive provisions in such Employment Agreement will apply).

 

You agree as a condition of the Performance Stock Units that in the event you decide to leave the Company or an Affiliate for any reason, you will provide the Company or the Affiliate with thirty (30) days’ prior notice of your departure (during which period, in the Company’s or its Affiliate’s sole discretion, you may be placed on paid leave), and you will not commence employment with anyone else during that period. For a period of ninety (90) days following the termination of your Service for any reason, you will not directly or indirectly solicit any employees of the Company or its Affiliates for employment or encourage any employee to leave the Company or an Affiliate.

 

 

5

 

 

Retention Rights  

This Agreement and the Performance Stock Units evidenced by this Agreement do not give you the right to be retained by the Company or any Affiliate in any capacity. Unless otherwise specified in an Employment Agreement, the Company or any Affiliate, as applicable, reserves the right to terminate your Service with the Company or an Affiliate at any time and for any reason.

 

Stockholder Rights  

You have no rights as a stockholder with respect to the Performance Stock Units unless and until the Stock relating to the Performance Stock Units has been delivered to you. No adjustments are made for dividends, distributions, or other rights if the applicable record date occurs before your certificate is issued (or an appropriate book entry is made), except as described in the Plan.

 

Corporate Activity  

Your Performance Stock Units shall be subject to the terms of any applicable agreement of merger, liquidation, or reorganization in the event the Company is subject to such corporate activity, consistent with Section 17 of the Plan.

 

Clawback  

The Performance Stock Units are subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company “clawback” or recoupment policy or Applicable Laws that require the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy or Applicable Laws.

 

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, and you are subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly negligent in failing to prevent the misconduct, you shall reimburse the Company the amount of any payment in settlement of the Performance Stock Units earned or accrued during the twelve (12)-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

 

Applicable Law   This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

6

 

 

The Plan  

The text of the Plan is incorporated in this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.

 

This Agreement, the Plan, and any Employment Agreement constitute the entire understanding between you and the Company regarding the Performance Stock Units. Any prior agreements, commitments, or negotiations concerning the Performance Stock Units are superseded; except that any written consulting, confidentiality, non-competition, non-solicitation, and/or severance agreement between you and the Company or any Affiliate, as applicable, shall supersede this Agreement with respect to its subject matter.

 

Data Privacy  

To administer the Plan, the Company may process personal data about you.  Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.  By accepting the Performance Stock Units, you give explicit consent to the Company to process any such personal data.

 

Disclaimer of Rights  

The grant of Performance Stock Units under this Agreement will in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to you.  You will have no rights under this Agreement or the Plan other than those of a general unsecured creditor of the Company.  Performance Stock Units represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the Plan and this Agreement.

 

Electronic Delivery  

By accepting the Performance Stock Units, you consent to receive documents related to the Performance Stock Units by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.

 

Code Section 409A  

The grant of Performance Stock Units under this Agreement is intended to comply with Code Section 409A (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty.

 

    To the extent that the Performance Stock Units constitute “deferred compensation” under Section 409A, a termination of Service occurs only upon an event that would be a Separation from Service within the meaning of Section 409A. If, at the time of your Separation from Service, (1) you are a “specified employee” within the meaning of Section 409A, and (2) the Company makes a good faith determination that an amount payable on account of your Separation from Service constitutes deferred compensation (within the meaning of Section 409A), the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Section 409A to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after the Delay Period (or upon your death, if earlier), without interest. Each installment of Performance Stock Units that vest under this Agreement (if there is more than one installment) will be considered one of a series of separate payments for purposes of Section 409A.

 

 

By accepting this Agreement, you agree to all of the terms and conditions described above and in the Plan. In the event that any term of this Agreement conflicts with the terms of an Employment Agreement, the terms of such Employment Agreement shall supersede the conflicting terms herein.

 

7

 

 

Exhibit A

 

Performance Stock Unit Agreement

 

Performance Goals

 

The Performance Stock Units will vest based on the achievement of performance goals to be established and tailored as of the Grant Date by the Committee based on one or more Performance Measures under the Plan and consistent with the terms of the Plan.

 

 

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Section 6: EX-99.4 (EXHIBIT 99.4)

Exhibit 99.4

 

Walker & Dunlop, Inc.

2020 Equity Incentive Plan

 

RESTRICTED STOCK AGREEMENT

COVER SHEET

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants restricted shares of the Company’s common stock, par value $0.01 per share (the “Stock”), to the Grantee named below, subject to the vesting and other conditions set forth below (the “Restricted Stock”). Additional terms and conditions of the Restricted Stock are set forth on this cover sheet and in the attached Restricted Stock Agreement (together, the “Agreement”), in the Company’s 2020 Equity Incentive Plan (as amended from time to time, the “Plan”), and in any written employment or other written compensatory agreement between you and the Company or any Affiliate (if any, the “Employment Agreement”).

 

Grant Date:    

 

Name of Grantee:

   

 

Grantee’s Social Security Number:

   

 

Number of Shares of Restricted Stock:

   

 

Purchase Price per Share of Stock:

  $0.01

 

Vesting Schedule:

 

 

 

 

 

If you continue in Service on each applicable vesting date, the shares of Restricted Stock shall vest in equal installments on each vesting date set forth below; provided, however, that any fractional shares shall be rounded up to the nearest whole share on the first and, if applicable, the last vesting date:

·         [●];

·         [●]; and

·         [●].

 

 

You agree to all of the terms and conditions described in this Agreement, in the Plan (a copy of which is also posted), and in the Employment Agreement unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

 

Attachment

This is not a stock certificate or a negotiable instrument.

 

 

 

WALKER & DUNLOP, INC.

2020 EQUITY INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

 

Restricted Stock

This Agreement evidences an award of shares of Restricted Stock in the number set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement, the Plan, and on the cover sheet. The Purchase Price is deemed paid by your prior Services to the Company.

 

Transfer of Unvested Restricted Stock

Shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the shares of Restricted Stock be made subject to execution, attachment, or similar process. If you attempt to do any of these things, you will immediately and automatically forfeit your shares of Restricted Stock.

 

Issuance and Vesting

The Company will issue your shares of Restricted Stock in the name set forth on the cover sheet.

 

Your shares of Restricted Stock will vest in accordance with the vesting schedule set forth on the cover sheet of this Agreement, so long as you continue in Service on each applicable vesting date set forth on the cover sheet.

 

Notwithstanding your vesting schedule, the shares of Restricted Stock will become 100% vested upon your termination of Service due to your death or Disability.

 

Change in Control

Notwithstanding the vesting schedule set forth above, upon the consummation of a Change in Control, the shares of Restricted Stock will become 100% vested (i) if the shares of Restricted Stock are not assumed, or equivalent restricted securities are not substituted for the shares of Restricted Stock, by the Company or its successor, or (ii) if assumed or substituted for, upon your Involuntary Termination within the twelve (12)-month period (or for the period of time or lack of a period of time otherwise set forth in the Employment Agreement), following the consummation of the Change in Control.

 

Involuntary Termination” means termination of your Service by reason of (i) your involuntary dismissal by the Company or its successor for reasons other than Cause; or (ii) your voluntary resignation for Good Reason (and without Cause) as defined in the Employment Agreement, or if none, then following (x) the assignment of substantial duties or responsibilities inconsistent with your position at the Company, or any other action by the Company which results in a substantial diminution of your duties or responsibilities other than any such reduction which is remedied by the Company within thirty (30) days of receipt of written notice from you; (y) a requirement that you work principally from a location that is twenty (20) miles further from your residence than the Company’s principal place of business on the date of this Agreement; or (z) a substantial reduction in your aggregate base salary and other compensation taken as a whole, excluding any reductions caused by the failure to achieve performance targets. To qualify as an “Involuntary Termination,” you must provide notice to the Company or its successor of any of the foregoing occurrences within ninety (90) days of the initial occurrence, and the Company shall have thirty (30) days thereafter to remedy such occurrence. In addition, you must terminate your Service at a time agreed reasonably with the Company, but in any event within one hundred fifty (150) days from the initial occurrence of any of the foregoing events.

 

 

2

 

 

Evidence of Issuance

The issuance of the shares of Stock with respect to the Restricted Stock will be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates, with any unvested shares of Restricted Stock bearing the appropriate restrictions imposed by this Agreement. As your interest in the shares of Restricted Stock vests, the recordation of the number of shares of Restricted Stock attributable to you will be appropriately modified if necessary.

 

Forfeiture of Unvested Restricted Stock

Unless the termination of your Service triggers accelerated vesting of your shares of Restricted Stock or other treatment pursuant to the terms of this Agreement, the Plan, or any Employment Agreement, you will immediately and automatically forfeit to the Company all of the unvested shares of Restricted Stock in the event your Service terminates for any reason.

 

Forfeiture of Rights

If you should take actions in violation or breach of, or in conflict with, any non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any Affiliate, any confidentiality obligation with respect to the Company or any Affiliate, otherwise in competition with the Company or any Affiliate, any Company or Affiliate policy or procedure, any other agreement, or any other obligation to the Company or any Affiliate, the Company has the right to cause an immediate forfeiture of your rights to the shares of Restricted Stock awarded under this Agreement, and the shares of Restricted Stock shall immediately and automatically expire.

 

In addition, if you have vested in any portion of the shares of Restricted Stock granted pursuant to this Agreement during the two (2)-year period prior to your actions, you will owe the Company a cash payment (or forfeiture of shares of Stock) in an amount determined as follows: (i) for any shares of Stock that you have sold prior to receiving notice from the Company, the amount will be the proceeds received from the sale(s), and (ii) for any shares of Stock that you still own, the amount will be the number of shares of Stock owned times the Fair Market Value of the shares of Stock on the date you receive notice from the Company (provided, that the Company may require you to satisfy your payment obligations hereunder either by forfeiting and returning to the Company the shares of Restricted Stock or any other shares of Stock or making a cash payment or a combination of these methods as determined by the Company in its sole discretion).

 

 

3

 

 

Section 83(b) Election

Under Code Section 83, the difference between the Purchase Price paid for the shares of Restricted Stock and their Fair Market Value on the date any forfeiture restrictions applicable to such shares lapse will be reportable as ordinary income at that time. For this purpose, “forfeiture restrictions” include the forfeiture as to unvested shares of Restricted Stock described above. You may elect to be taxed at the time the shares of Restricted Stock are acquired, rather than when such shares cease to be subject to such forfeiture restrictions, by filing an election under Code Section 83(b) with the Internal Revenue Service within thirty (30) days after the Grant Date. You will have to make a tax payment to the extent the Purchase Price is less than the Fair Market Value of the shares on the Grant Date. No tax payment will have to be made to the extent the Purchase Price is at least equal to the Fair Market Value of the shares on the Grant Date. The form for making this election is attached as Exhibit A hereto. Failure to make this filing within the thirty (30)-day period will result in the recognition of ordinary income by you (in the event the Fair Market Value of the shares as of the vesting date exceeds the Purchase Price) as the forfeiture restrictions lapse.

 

YOU ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF. YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY CODE SECTION 83(b) ELECTION.

 

Leaves of Absence

For purposes of this Agreement, your Service does not terminate when you go on a bona fide leave of absence that was approved by your employer (Walker & Dunlop, LLC or any Affiliate of the Company that directly employs you) in writing if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by Applicable Laws. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.

 

Your employer may determine, in its discretion, which leaves count for this purpose and when your Service terminates for all purposes under the Plan in accordance with the provisions of the Plan. Notwithstanding the foregoing, the Company may determine, in its discretion, that a leave counts for this purpose even if your employer does not agree.

 

 

4

 

 

Withholding

You agree as a condition of this grant of Restricted Stock that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the vesting or the receipt of the shares of Restricted Stock. In the event that the Company or any Affiliate determines that any federal, state, local, or foreign tax or withholding payment is required relating to the Restricted Stock, the Company or any Affiliate will have the right to require such payments from you or withhold such amounts from other payments due to you from the Company or any Affiliate, or withhold the delivery of vested shares of Stock otherwise deliverable under this Agreement). You may elect to satisfy such obligations, in whole or in part, (i) by causing the Company or any Affiliate to withhold shares of Stock otherwise issuable to you or (ii) by delivering to the Company or any Affiliate shares of Stock already owned by you. The shares of Stock so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations.

 

Notice and Non-Solicitation

The following notice and non-solicitation provisions will apply to you unless you have entered into an Employment Agreement that has more restrictive notice and non-solicitation provisions (in which case, the more restrictive provisions in such Employment Agreement will apply).

 

You agree as a condition of the Restricted Stock that in the event you decide to leave the Company or an Affiliate for any reason, you will provide the Company or the Affiliate with four (4) weeks’ (for manager-level employees) or two (2) weeks’ (for non-manager-level employees) prior notice of your departure (during which period, in the Company’s or its Affiliate’s sole discretion, you may be placed on paid leave), and you will not commence employment with anyone else during that period. For a period of ninety (90) days following the termination of your Service for any reason, you will not directly or indirectly solicit any employees of the Company or its Affiliates for employment or encourage any employee to leave the Company or any Affiliate.

 

Retention Rights

This Agreement and the grant of Restricted Stock evidenced by this Agreement do not give you the right to be retained by the Company or any Affiliate in any capacity. Unless otherwise specified in an Employment Agreement, the Company or an Affiliate, as applicable, reserves the right to terminate your Service at any time and for any reason.

 

 

5

 

 

Stockholder Rights

You have the right to vote the shares of Restricted Stock and to receive any dividends declared or paid on such shares.  Any stock distributions you receive with respect to unvested shares of Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be deemed to be a part of the Restricted Stock and subject to the same conditions and restrictions applicable thereto.  Any cash dividends paid on unvested shares of Restricted Stock you hold on the record date for such dividend shall be paid to you in cash at the same time paid to other stockholders of the Company as of the record date for such dividend and shall not be subject to the conditions and restrictions applicable to the unvested shares of Restricted Stock.  Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs before an appropriate book entry is made (or your certificate is issued).

 

Your Restricted Stock grant shall be subject to the terms of any applicable agreement of merger, liquidation, or reorganization in the event the Company is subject to such corporate activity, consistent with Section 17 of the Plan.

 

Legends

If and to the extent that the shares of Restricted Stock are represented by certificates rather than book entry, all certificates representing the shares of Restricted Stock issued under this grant shall, where applicable, have endorsed thereon the following legends:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING, FORFEITURE, AND OTHER RESTRICTIONS ON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

 

To the extent the shares of Restricted Stock are represented by a book entry, such book entry will contain an appropriate legend or restriction similar to the foregoing.

 

Clawback

The Restricted Stock are subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company “clawback” or recoupment policy or Applicable Laws that require the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy or Applicable Laws.

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, and you are subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly negligent in failing to prevent the misconduct, you shall reimburse the Company the amount of any payment in settlement of the Restricted Stock earned or accrued during the twelve (12)-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

 

 

6

 

 

Applicable Law

This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

The Plan

The text of the Plan is incorporated in this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.

 

This Agreement, the Plan, and any Employment Agreement constitute the entire understanding between you and the Company regarding the shares of Restricted Stock. Any prior agreements, commitments, or negotiations concerning the Restricted Stock are superseded; except that any written employment, consulting, confidentiality, non-competition, non-solicitation, and/or severance agreement between you and the Company or any Affiliate, as applicable, shall supersede this Agreement with respect to its subject matter.

 

Data Privacy

To administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting the grant of Restricted Stock, you give explicit consent to the Company to process any such personal data.

 

 

7

 

 

Electronic Delivery

By accepting the Restricted Stock, you consent to receive documents related to the shares of Restricted Stock by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.

 

Code Section 409A The grant of Restricted Stock under this Agreement is intended to comply with Code Section 409A (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A.  Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty.  

 

 

By accepting this Agreement, you agree to all of the terms and conditions described above and in the Plan. In the event that any term of this Agreement conflicts with the terms of an Employment Agreement, the terms of such Employment Agreement shall supersede the conflicting terms herein.

 

8

 

 

EXHIBIT A

 

ELECTION UNDER SECTION 83(b) OF
THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:

 

1.The name, address, and social security number of the undersigned taxpayer:

Name:    

 

Address:

   

 

 

   

 

Social Security Number:

   

 

2.Description of property with respect to which the election is being made:

___________shares of common stock, par value $0.01 per share, of Walker & Dunlop, Inc., a Maryland corporation (the “Company”).

 

3.The date on which the property was transferred is: _____________, 20__.

 

4.The taxable year to which this election relates is calendar year: 20___.

 

5.Nature of restrictions to which the property is subject:

 

The shares of common stock are subject to the provisions of a Restricted Stock Agreement between the undersigned taxpayer and the Company. The shares of common stock are subject to forfeiture under the terms of the Restricted Stock Agreement.

 

6.The fair market value of the property at the time of transfer (determined without regard to any lapse restriction) was: $___________ per share, for a total of $__________.

 

7.The amount paid by taxpayer for the property was: $__________.

 

8.A copy of this statement has been furnished to the Company.

 

Dated: _____________, 20___

___________________________________________________

 

Print Name:__________________________________________

 

 

 

PROCEDURES FOR MAKING ELECTION

UNDER INTERNAL REVENUE CODE SECTION 83(b)

 

The following procedures must be followed with respect to the attached form for making an election under Internal Revenue Code section 83(b) in order for the election to be effective:

 

1.You must file one copy of the completed election form with the IRS Service Center where you file your federal income tax returns within thirty (30) days after the Grant Date of your Restricted Stock.

 

 

2.At the same time you file the election form with the IRS, you must also give a copy of the election form to the Stock Plan Administrator of the Company.

 

3.You must file another copy of the election form with your federal income tax return (generally, Form 1040) for the taxable year in which the Restricted Stock is transferred to you.

 

 

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Section 7: EX-99.5 (EXHIBIT 99.5)

Exhibit 99.5

WALKER & DUNLOP, INC.

2020 EQUITY INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

COVER SHEET

(Directors)

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants restricted shares of the Company’s common stock, par value $0.01 per share (the “Stock”), to the Grantee named below, subject to the vesting and other conditions set forth below (the “Restricted Stock”). Additional terms and conditions of the Restricted Stock are set forth on this cover sheet and in the attached Restricted Stock Agreement (together, the “Agreement”) and in the Company’s 2020 Equity Incentive Plan (as amended from time to time, the “Plan”).

 

Grant Date:   
    
Name of Grantee:   
    
Last Four Digits of Grantee’s Social Security Number:   
    
Number of Shares of Restricted Stock:   
    
Purchase Price per Share of Stock:  $0.01
    
Vesting Schedule:   All of the shares of Restricted Stock shall vest in full on: [●].

 

You agree to all of the terms and conditions described in this Agreement and in the Plan (a copy of which is also posted) unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

 

Attachment

This is not a stock certificate or a negotiable instrument.

 

 

 

WALKER & DUNLOP, INC.

2020 EQUITY INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

 

Restricted Stock  

This Agreement evidences an award of shares of Restricted Stock in the number set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement, the Plan, and on the cover sheet. The Purchase Price is deemed paid by your prior Services to the Company.

 

Transfer of Unvested
Restricted Stock
 

Shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the shares of Restricted Stock be made subject to execution, attachment, or similar process. If you attempt to do any of these things, you will immediately and automatically forfeit your Restricted Stock.

 

Issuance and Vesting  

The Company will issue your shares of Restricted Stock in the name set forth on the cover sheet.

 

Your Restricted Stock will vest in accordance with the vesting schedule set forth on the cover sheet of this Agreement, so long as you continue in Service on the applicable vesting date set forth on the cover sheet.

Notwithstanding your vesting schedule, the shares of Restricted Stock will become 100% vested upon your termination of Service due to your death or Disability.

 

Deferral Election  

Notwithstanding any other provision of this Agreement or the Plan, in the event you have previously made a valid election to defer receipt of all or any portion of the Restricted Stock represented by this Agreement in accordance with the terms of the Deferred Compensation Plan, the Company will not issue such deferred Restricted Stock to you on the Grant Date and will instead credit to your Deferred Compensation Account an equal amount of Deferred Stock Units. The Deferred Stock Units related to such deferred Restricted Stock shall be subject to all of the terms and conditions of the Deferred Compensation Plan, which provides that the Deferred Stock Units are subject to the vesting and forfeiture provisions set forth in this Agreement, and paid at the times set forth in the Deferred Compensation Plan and the Participant’s applicable deferral election thereunder.

 

Change in Control  

Notwithstanding the vesting schedule set forth above, upon the consummation of a Change in Control, the shares of Restricted Stock will become 100% vested.

 

 

2

 

 

Evidence of Issuance  

The issuance of the shares of Stock with respect to the Restricted Stock will be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates, with any unvested shares of Restricted Stock bearing the appropriate restrictions imposed by this Agreement. As your interest in the shares of Restricted Stock vests, the recordation of the number of shares of Restricted Stock attributable to you will be appropriately modified if necessary.

 

Forfeiture of Unvested Restricted Stock  

Unless the termination of your Service triggers accelerated vesting of your shares of Restricted Stock or other treatment pursuant to the terms of this Agreement, the Plan, or any other written agreement between the Company or any Affiliate, as applicable, and you, you will immediately and automatically forfeit to the Company all of the unvested shares of Restricted Stock in the event your Service terminates for any reason.

 

Code Section 83(b) Election  

Under Code Section 83, the difference between the Purchase Price paid for the shares of Restricted Stock and their Fair Market Value on the date any forfeiture restrictions applicable to such shares lapse will be reportable as ordinary income at that time. For this purpose, “forfeiture restrictions” include the forfeiture as to unvested shares of Restricted Stock described above. You may elect to be taxed at the time the shares of Restricted Stock are acquired (other than shares of Restricted Stock subject to a deferral election), rather than when such shares cease to be subject to such forfeiture restrictions, by filing an election under Code Section 83(b) with the Internal Revenue Service within thirty (30) days after the Grant Date. You will have to make a tax payment to the extent the Purchase Price is less than the Fair Market Value of the shares on the Grant Date. No tax payment will have to be made to the extent the Purchase Price is at least equal to the Fair Market Value of the shares on the Grant Date. The form for making this election is attached as Exhibit A hereto. Failure to make this filing within the thirty (30)-day period will result in the recognition of ordinary income by you (in the event the Fair Market Value of the shares as of the vesting date exceeds the Purchase Price) as the forfeiture restrictions lapse.

 

YOU ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF. YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY CODE SECTION 83(b) ELECTION.

 

 

3

 

 

Withholding  

You agree as a condition of this grant of Restricted Stock that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the vesting or the receipt of the shares of Restricted Stock. In the event that the Company or any Affiliate determines that any federal, state, local, or foreign tax or withholding payment is required relating to the shares of Restricted Stock, the Company or any Affiliate, shall have the right to require such payments from you or withhold such amounts from other payments due to you from the Company or any Affiliate, as applicable, or withhold the delivery of vested shares of Stock otherwise deliverable under this Agreement. You may elect to satisfy such obligations, in whole or in part, (i) by causing the Company or any Affiliate to withhold shares of Stock otherwise issuable to you or (ii) by delivering to the Company or any Affiliate shares of Stock already owned by you. The shares of Stock so withheld will have an aggregate Fair Market Value equal to such withholding obligations.

 

Retention Rights  

This Agreement and the grant of Restricted Stock evidenced by this Agreement do not give you the right to be retained by the Company or any Affiliate in any capacity. Unless otherwise specified in an employment or other written agreement between the Company or any Affiliate, as applicable, and you, the Company or any Affiliate, as applicable, reserves the right to terminate your Service with the Company or an Affiliate at any time and for any reason.

 

Stockholder Rights  

You have the right to vote the shares of Restricted Stock and to receive any dividends declared or paid on such shares.  Any stock distributions you receive with respect to unvested shares of Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be deemed to be a part of the Restricted Stock and subject to the same conditions and restrictions applicable thereto.  Any cash dividends paid on unvested shares of Restricted Stock you hold on the record date for such dividend shall be paid to you in cash at the same time paid to other stockholders of the Company as of the record date for such dividend and shall not be subject to the conditions and restrictions applicable to the unvested shares of Restricted Stock.  Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs before an appropriate book entry is made (or your certificate is issued). 

 

Your Restricted Stock grant shall be subject to the terms of any applicable agreement of merger, liquidation, or reorganization in the event the Company is subject to such corporate activity, consistent with Section 17 of the Plan.

 

 

4

 

 

Legends  

If and to the extent that the shares of Restricted Stock are represented by certificates rather than book entry, all certificates representing the shares of Restricted Stock issued under this grant shall, where applicable, have endorsed thereon the following legends:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING, FORFEITURE, AND OTHER RESTRICTIONS ON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

 

To the extent the shares of Restricted Stock are represented by a book entry, such book entry will contain an appropriate legend or restriction similar to the foregoing.

 

Clawback  

The Restricted Stock are subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company “clawback” or recoupment policy or Applicable Laws that require the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy or Applicable Laws.

 

Applicable Law  

This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

The Plan  

The text of the Plan is incorporated into this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Plan or, if not defined in this Agreement of the Plan, in the Walker & Dunlop, Inc. Deferred Compensation Plan for Non-Employee Directors (the “Deferred Compensation Plan”) and have the meaning set forth in the Plan or the Deferred Compensation Plan, as applicable.

 

This Agreement and the Plan constitute the entire understanding between you and the Company regarding the shares of Restricted Stock. Any prior agreements, commitments, or negotiations concerning the Restricted Stock are superseded; except that any written employment, consulting, confidentiality, non-competition, non-solicitation, and/or severance agreement between you and the Company or any Affiliate, as applicable, shall supersede this Agreement with respect to its subject matter.

 

 

5

 

 

Data Privacy  

To administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting the Restricted Stock, you give explicit consent to the Company to process any such personal data.

 

Electronic Delivery  

By accepting the grant of Restricted Stock, you consent to receive documents related to the shares of Restricted Stock by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.

 

Code Section 409A  

The grant of Restricted Stock under this Agreement is intended to comply with Code Section 409A (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty.

 

 

By accepting this Agreement, you agree to all of the terms and conditions described above and in the Plan.

 

6

 

 

EXHIBIT A

 

ELECTION UNDER SECTION 83(b) OF

THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:

 

1.The name, address, and social security number of the undersigned taxpayer:

 

  Name:    
       
    Address:    
       
       
     
    Social Security Number:    

 

2.Description of property with respect to which the election is being made:

 

__________shares of common stock, par value $0.01 per share, of Walker & Dunlop, Inc., a Maryland corporation (the “Company”).

 

3.The date on which the property was transferred is: _____________, 20__.

 

4.The taxable year to which this election relates is calendar year: 20___.

 

5.Nature of restrictions to which the property is subject:

 

The shares of common stock are subject to the provisions of a Restricted Stock Agreement between the undersigned taxpayer and the Company. The shares of common stock are subject to forfeiture under the terms of the Restricted Stock Agreement.

 

6.The fair market value of the property at the time of transfer (determined without regard to any lapse restriction) was: $__________ per share, for a total of $__________.

 

7.The amount paid by taxpayer for the property was: $__________.

 

8.A copy of this statement has been furnished to the Company.

 

Dated: _____________, 20___

 

   
   
  Print Name:  

 

 

 

PROCEDURES FOR MAKING ELECTION

UNDER INTERNAL REVENUE CODE SECTION 83(b)

 

The following procedures must be followed with respect to the attached form for making an election under Internal Revenue Code section 83(b) in order for the election to be effective:

 

1.            You must file one copy of the completed election form with the IRS Service Center where you file your federal income tax returns within thirty (30) days after the Grant Date of your Restricted Stock.

 

2.           At the same time you file the election form with the IRS, you must also give a copy of the election form to the Stock Plan Administrator of the Company.

 

3.            You must file another copy of the election form with your federal income tax return (generally, Form 1040) for the taxable year in which the Restricted Stock is transferred to you.

 

 

 

 

 

 

 

 

 

(Back To Top)

Section 8: EX-99.6 (EXHIBIT 99.6)

 

Exhibit 99.6

 

Walker & Dunlop, Inc.

2020 Equity Incentive PLan

AS AMENDED AND RESTATED EFFECTIVE MAY 1, 2017

 

Management Deferred Stock Unit Purchase Matching Program

 

1.            Introduction

 

(a)                Adoption of the Program. The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Walker & Dunlop, Inc. (the “Company”) adopted the Company’s Management Deferred Stock Unit Purchase Matching Program (the “Program”), effective January 10, 2013 (the “Effective Date”) to make matching awards covering shares of common stock, par value $0.01 per share (the “Stock”), in connection with Stock purchases made by eligible executives and its Affiliates under the Walker & Dunlop, Inc. Management Deferred Stock Unit Purchase Plan (the “Purchase Plan”). The Program was originally established under a predecessor equity incentive plan to the Walker & Dunlop, Inc. 2020 Equity Incentive Plan (as may be amended from time to time, the “2020 Plan”) and shall continue under the 2020 Plan. Unless otherwise defined in the Program, capitalized terms will have the meanings set forth in the 2020 Plan.

 

(b)                Purpose of the Program. Eligible executives who purchase shares of Stock under the Purchase Plan will automatically receive an award of Restricted Stock Units or Deferred Stock Units under the Program (as described in Section 4(f)). A “Restricted Stock Unit” is a right to receive one share of Stock subject to terms and conditions, such as a time-based vesting condition. A “Deferred Stock Unit” is a right to receive one share of Stock, which provides for delivery of the underlying share of Stock after the date of vesting, at a time or times consistent with the requirements of Section 409A of the Code and all regulations, guidance, and other interpretive authority issued thereunder (collectively, “Section 409A”). Restricted Stock Units and Deferred Stock Units are referred to together as “Stock Units.”

 

2.            Administration; Amendment and Termination

 

(a)                The Committee. The Program will be administered under the supervision of the Committee. The Committee will prescribe guidelines and forms for the implementation and administration of the Program, interpret the terms of the Program, and make all other substantive decisions regarding the operation of the Program. The Committee’s decisions in its administration of the Program are final, binding, and conclusive on all persons.

 

(b)                Amendment and Termination. The Committee may amend, suspend, or terminate the Program at any time and for any reason. No amendment, suspension, or termination will, without the consent of the Participant (as defined below), impair rights or obligations under any Stock Units previously awarded to the Participant under the Program.

 

3.            Participation

 

Each executive of the Company and its Affiliates who is a Participant in the Purchase Plan will be a participant in the Program (the “Participant”) and will also be a Grantee under the 2020 Plan with respect to the award of Stock Units under the Program.

 

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4.            Program Awards

 

(a)                Matching Award. Subject to Section 4(b), each Participant will automatically receive an award of Stock Units equal to 50% of the Deferred Stock Units purchased by the Participant under the Purchase Plan, rounded down to the nearest whole Stock Unit (the “Matching Award”). No fractional Stock Units will be awarded. The Matching Award will be determined on the date that the Participant’s annual incentive bonus and/or Eligible Sales Commissions (the “Bonus”) are paid (the “Award Date”). Eligible Sales Commissions” are the sales commissions for the calendar year that exceed the minimum established by the Company in an individual’s Election Agreement (as defined below) and include only sales commissions the individual actually receives by December 31 of the calendar year in which the sales commissions are earned. For purposes of a Bonus that consists of Eligible Sales Commissions, the Eligible Sales Commissions shall be treated as paid in the calendar year following the calendar year in which the Eligible Sales Commissions are earned and on the same Award Date as a Bonus that consists of an annual incentive bonus. Notwithstanding the foregoing, the maximum number of Stock Units with respect to a Matching Award that a Participant will receive on an Award Date equals $500,000 divided by the Fair Market Value of a share of Stock on the Award Date, rounded down to the nearest whole Stock Unit. The Stock Units granted with respect to the Matching Award will be credited to a bookkeeping account established and maintained for the Participant (an “Account”).

 

(b)                Condition to Receipt of Matching Award. Notwithstanding anything to the contrary in the Program, in the event that the Participant’s actual Bonus (i) for purposes of a Bonus that consists of an annual incentive bonus, is less than 51% of such Participant’s target annual incentive bonus for a calendar year under the applicable incentive arrangement with the Company or any Affiliate or (ii) for purposes of a Bonus that consists of Eligible Sales Commissions, is equal to or less than the Eligible Sales Commissions threshold (as that threshold is set by the Company or an Affiliate in the applicable agreement designating the individual as eligible to participate in the Plan), the Participant will not receive a Matching Award with respect to such calendar year.

 

(c)                Vesting of the Matching Award; Forfeiture. Subject to the Participant’s continued Service from the Award Date through the vesting date, the Matching Award will vest in full on March 15 of the third calendar year following the Award Date (the “Vesting Date”). The Participant will automatically forfeit to the Company all of the unvested Stock Units in his or her Account underlying Matching Awards made to the Participant under the Program on the date of the Participant’s termination of Service. Notwithstanding the foregoing vesting schedule, the Stock Units will become 100% vested upon the termination of the Participant’s Service due to the Participant’s death or Disability. In addition, notwithstanding the foregoing vesting schedule and provided that the Participant’s Service continues from the Award Date through the consummation of a Change in Control (as defined in Section 4(g)), the Stock Units will become 100% vested (i) if the Stock Units are not assumed, or equivalent awards are not substituted for the Stock Units, by the Company or its successor, or (ii) if assumed or substituted for, upon the Participant’s involuntary dismissal by the Company or its successor for reasons other than Cause, or the Participant’s voluntary resignation for Good Reason (as defined below), provided that such termination is effective within 24 months following the Change in Control. For purposes of the Program, “Good Reason” will have the meaning assigned to such term in any applicable written employment or severance agreement, plan, or arrangement between the Company or an Affiliate and the Participant, or if none, means the occurrence of one or more of the following without the Participant’s express written consent: (A) the assignment of substantial duties or responsibilities inconsistent with the Participant’s position at the Company or an Affiliate, or any other action by the Company or an Affiliate that results in a substantial diminution of the Participant’s duties or responsibilities; (B) a requirement that the Participant work principally from a location outside the 20-mile radius from the Company’s or the Affiliate’s principal place of business; or (C) a substantial reduction in the Participant’s aggregate base salary and other compensation taken as a whole, excluding any reductions caused by the failure to achieve performance targets. To qualify as a voluntary resignation for Good Reason, the Participant must (I) provide notice to the Company or the Affiliate of any of the foregoing occurrences within 90 days of the initial occurrence, and the Company or the Affiliate will have 30 days to remedy such occurrence, and (II) terminate the Participant’s Service at a time agreed reasonably with the Company or the Affiliate, but in any event within 120 days from the initial occurrence of any of the foregoing events.

 

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(d)                Election. In connection with the Participant’s purchase of Deferred Stock Units under the Purchase Plan, each Participant will file a completed Bonus Deferral Election Agreement or Sales Commission Deferral Election Agreement (each, an “Election Agreement”) with the Company, on a form prescribed by the Committee, during the Open Enrollment Period. For purposes of the Plan, “Open Enrollment Period” means (i) the period of time beginning on December 1 and ending on December 31 of the calendar year preceding the calendar year for which a Bonus is earned, or (ii) if otherwise determined by the Committee or an officer of the Company designated by the Committee, a period of 30 consecutive days ending no later than December 31 of the calendar year preceding the calendar year for which a Bonus is earned. For purposes of a Bonus that consists of Eligible Sales Commissions, the Bonus is treated as earned in the calendar year in which the transaction giving rise to the sales commission is rate locked and delivered to the investor. The “Election Date” is the last day of the Open Enrollment Period of the applicable calendar year.

 

(e)                Distribution Election; Issuance of Shares. The Election Agreement for each Participant will specify a distribution date for Deferred Stock Units purchased under the Purchase Plan (the “Distribution Date”), which Distribution Date will also apply to the Stock Units awarded under the Program. Any election of a Distribution Date is irrevocable as of the Election Date. The Company will issue to the Participant one share of Stock for each vested Stock Unit on the Distribution Date. Notwithstanding anything to the contrary in the Plan, if the Distribution Date for a Stock Unit is the effective date of the Participant’s Separation from Service from the Company, and on the date of the Participant’s Separation from Service, the Participant is a “specified employee” within the meaning of Section 409A, the shares will be issued on the later to occur of (A) the scheduled Distribution Date and (B) the first day of the seventh month following the date of the Participant’s Separation from Service or, if earlier, the date of the Participant’s death.

 

(f)                 Election of Matching Award Type. The type of Matching Award granted to the Participant will be determined based on the Participant’s Distribution Date election under the Purchase Plan. If the Participant elects a Termination Date Election or a Deferred Distribution Date Election (as these terms are defined in the Purchase Plan), the Participant will receive a Matching Award of Deferred Stock Units. If the Participant elects a Vesting Date Election (as defined under the Purchase Plan), the Participant will receive a Matching Award of Restricted Stock Units.

 

(g)                Change in Control.

 

(i)                 The Program and Stock Units that are outstanding will continue in the manner and under the terms so provided in the event of any Change in Control (as defined below), with appropriate adjustments as to the number and type of shares underlying the award (disregarding any consideration that is not common stock).

 

(ii)               In connection with a Change in Control (as defined below) and notwithstanding anything in Sections 2(b) or 6(e) to the contrary, the Company may, in accordance with Treasury Regulation Section 1.409A-3(j)(4)(ix)(B), terminate the Program and cause the outstanding Stock Units to be terminated with the effect that shares of Stock subject to such Stock Units will be delivered immediately prior to the occurrence of the Change in Control.

 

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For purposes of the Program, “Change in Control” will have the same meaning as defined in the 2020 Plan. Notwithstanding the foregoing, for purposes of the Program, in no event will a Change in Control be deemed to have occurred if the transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).

 

(h)                Award Agreements. Each award of Stock Units granted under the Program will be evidenced by an Award Agreement between the Company and the Participant memorializing the terms and conditions of the Stock Units.

 

5.             Issuance of Shares of Stock due to Unforeseeable Emergency

 

(a)                Request for Issuance. If a Participant suffers an Unforeseeable Emergency (as defined below), he or she may submit a written request to the Committee for the issuance of the shares of Stock underlying vested Deferred Stock Units in the Participant’s Account. For purposes of the Program, “Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent; (ii) a loss of the Participant’s property due to casualty; or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, as determined in the sole discretion of the Committee and in accordance with the requirements of Section 409A.

 

(b)                No Payment if Other Relief is Available. The Committee will evaluate the Participant’s request for payment due to an Unforeseeable Emergency taking into account the Participant’s and the requirements of Section 409A. In no event will shares of Stock be issued under this Section 5 to the extent the Participant’s hardship can be relieved: (i) through reimbursement or compensation by insurance or otherwise; or (ii) by liquidation of the Participant’s assets, to the extent that liquidation of the Participant’s assets would not itself cause severe financial hardship.

 

(c)                Limitation on Issuance of Shares of Stock. The number of shares of Stock issued on account of an Unforeseeable Emergency will not exceed the amount reasonably necessary to satisfy the Participant’s financial need, including amounts necessary to pay any federal, state, local, or foreign taxes or penalties reasonably anticipated to result from the issuance of shares of Stock, as determined by the Committee.

 

(d)                Cancellation of Deferrals. If a Participant receives an issuance of shares of Stock on account of an Unforeseeable Emergency, the Participant’s Election Agreement for the Election Date in the same calendar year as the date of such issuance will be cancelled, and no deferrals will be made with respect to such Election Agreement.

 

6.            Beneficiary Designation

 

In the event of a Participant’s death, the Company will issue the shares of Stock underlying the Stock Units in the Participant’s Account to the Participant’s designated beneficiaries. If the Participant fails to complete a valid beneficiary designation, the Participant’s beneficiary will be his or her estate.

 

7.            Transferability

 

During a Participant’s lifetime, any issuance of shares of Stock under the Program will be made only to the Participant. Stock Units may not be transferred, assigned, pledged, or hypothecated, whether by operation of law or otherwise, nor may the Stock Units be made subject to execution, attachment, or similar process.

 

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8.            Withholding

 

In the event that the Company or an Affiliate determines that any federal, state, local, or foreign tax or withholding payment is required relating to the award of Stock Units under the Program or the issuance of shares with respect to Stock Units under the Program, the Participant shall satisfy such tax or withholding payment by (a) tendering a cash payment, (b) to the extent the shares are otherwise issuable pursuant to a Stock Unit, entering into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby the Participant irrevocably elects to sell a portion of the shares of Stock to be delivered in connection with the Stock Units to satisfy withholding obligations and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the withholding obligations directly to the Company or an Affiliate, or (c) to the extent the shares are otherwise issuable pursuant to a Stock Unit and unless otherwise determined by the Committee, having the Company withhold the delivery of shares of Stock otherwise deliverable to a Participant under the Program to meet such obligations; provided, that the shares of Stock so withheld will have an aggregate Fair Market Value not exceeding the maximum statutory tax rates applicable in your jurisdiction; provided, further, that, such shares shall be rounded up to the nearest whole share of Stock to the extent rounding up to the nearest whole share does not result in the liability classification of the Stock Units under generally accepted accounting principles in the United States of America. In the event the Participant fails to make arrangements for such tax or withholding payment in a manner that is reasonably acceptable to the Company, the Company shall withhold shares of Stock as provided in clause (c) of this paragraph, except to the extent it would result in adverse tax consequences under Section 409A and except to the extent the Committee determines that it will instead deduct from payments of any kind otherwise due to a Participant.

 

9.            Forfeiture; Recoupment; Clawback

 

(a)                The Committee may reserve the right in an Award Agreement to cause a forfeiture of the gain realized by a Participant with respect to a Matching Award on account of actions taken by, or failed to be taken by, the Participant in violation or breach of or in conflict with any (i) employment agreement, (ii) non-competition agreement, (iii) agreement prohibiting solicitation of employees or clients of the Company or any Affiliate, (iv) confidentiality obligation with respect to the Company or an Affiliate, (v) Company or Affiliate policy or procedure, (vi) other agreement, or (vii) any other obligation of the Participant to the Company or any Affiliate, as and to the extent specified in the Award Agreement. The Committee may annul an outstanding Matching Award if the Participant is terminated for Cause or for “cause” as defined in any other written agreement between the Company or any Affiliate and the Participant, as applicable.

 

(b)                Any Matching Award granted under the Program will be subject to mandatory repayment by the Participant to the Company (i) to the extent set forth in the Plan or an Award Agreement or (ii) to the extent the Participant is, or in the future becomes, subject to (A) any Company or Affiliate “clawback” or recoupment policy that is adopted to comply with the requirements of any Applicable Laws or otherwise, or (B) any Applicable Laws that impose mandatory recoupment, under circumstances set forth in such Applicable Laws.

 

(c)                If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 and any Participant who knowingly engaged in the misconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or was grossly negligent in failing to prevent the misconduct, will reimburse the Company the amount of any payment in settlement of a Matching Award earned or accrued during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

 

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(d)                Notwithstanding any other provision of the Program or any provision of any Award Agreement, if the Company is required to prepare an accounting restatement, then Participants will forfeit any Stock received in connection with a Matching Award (or an amount equal to the Fair Market Value of such Stock on the date of delivery if the Participant no longer holds the shares of Stock) if pursuant to the terms of the Award Agreement for such Matching Award, the Bonus used to purchase Deferred Stock Units under the Purchase Plan for which the Matching Award was based was explicitly based on the achievement of pre-established performance goals set forth in the applicable arrangement governing the Bonus (including earnings, gains, or other criteria) that are later determined, as a result of the accounting restatement, not to have been achieved.

 

10.          General Provisions

 

(a)                Requirements of Law. The Company will not be required to sell or issue any shares of Stock with respect to a Matching Award if the sale or issuance of such shares of Stock would constitute a violation by the Participant, the Company, an Affiliate, or any other Person of any provision of the Company’s certificate of incorporation or bylaws or of Applicable Laws, including without limitation any federal or state securities laws or regulations. If at any time the Company determines, in its discretion, that the listing, registration, or qualification of any shares of Stock with respect to any Matching Award upon any Stock Exchange or Securities Market or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the sale, issuance, or purchase of shares of Stock under the Program, no shares of Stock may be sold or issued to the Participant or any other Person with respect to such Matching Award unless such listing, registration, qualification has been effected or obtained free of any conditions not acceptable to the Company. The Company may, but will in no event be obligated to, register any Capital Stock covered by the Program pursuant to the Securities Act. The Company is not obligated to take any affirmative action to cause the issuance of shares of Stock pursuant to the Program to comply with any Applicable Laws.

 

(b)                No Right to Continued Service. No provision in the Program, any Award Agreement, or in any Election Agreement will be construed to confer upon any Person the right to remain in the Service of the Company or any Affiliate, or to interfere in any way with any contractual or other right or authority of the Company or any Affiliate either to increase or decrease the compensation or other payments to any Person at any time, or to terminate any Service or other relationship between any Persons and the Company or any Affiliate.

 

(c)                Disclaimer of Rights. The obligation of the Company to pay any benefits pursuant to the Program will be interpreted as a contractual obligation to pay only those amounts described in the Program, in the manner and under the conditions prescribed in the Program. The Program and the award of Stock Units under the Program will in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Participant or beneficiary under the Program. Participants in the Program will have no rights under the Program other than those of a general unsecured creditor of the Company. Stock Units represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the Program, the applicable Award Agreement, and the Election Agreement.

 

(d)                No Obligation to Minimize Taxes. The Company has no duty or obligation to minimize the tax consequences of a Stock Unit award under the Program and makes no guarantee regarding the tax treatment of any such Stock Unit award.

 

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(e)                Other Provisions. Each Matching Award under the Program may contain such other terms and conditions not inconsistent with the Program as the Committee determines, in its sole discretion, and specifies in the applicable Award Agreement.

 

(f)                 Severability. If any provision of the Program, any Award Agreement, or any Election Agreement is determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions of the Program, the Award Agreement, and the Election Agreement will be severable and enforceable in accordance with their terms, and all provisions will remain enforceable in any other jurisdiction.

 

(g)                Governing Law. The validity and construction of the Program and the instruments evidencing the Matching Awards granted under the Program will be governed by, and construed and interpreted in accordance with, the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Program and the instruments evidencing the Matching Awards granted under the Program to the substantive laws of any other jurisdiction.

 

(h)                Section 409A. The Program is intended to comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Program will be interpreted and administered to be in compliance with Section 409A. Notwithstanding anything to the contrary in the Program, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to any Participant for such tax or penalty.

 

(i)                 Governing Plan Document. The Program is subject to all of the provisions of the 2020 Plan and is further subject to all interpretations, amendments, rules, and regulations that may from time to time be promulgated and adopted by the Committee, the Board, or the Company pursuant to the 2020 Plan. In the event of any conflict between the provisions of the Program and those of the 2020 Plan, the provisions of the 2020 Plan will control.

 

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Section 9: EX-99.7 (EXHIBIT 99.7)

 

Exhibit 99.7

 

Walker & Dunlop, Inc.

2020 Equity Incentive Plan

 

Management Deferred Stock Unit Purchase matching Program

restricted Stock Unit Agreement

COVER SHEET

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants restricted stock units (the “Restricted Stock Units”) relating to shares of the Company’s common stock, par value $0.01 per share (the “Stock”), to the Participant named below, subject to the vesting conditions set forth below. Additional terms and conditions of the Restricted Stock Units are set forth on this cover sheet and in the attached Restricted Stock Unit Agreement (together, the “Agreement”), in the Company’s Management Deferred Stock Unit Purchase Matching Program (as amended from time to time, the “Matching Program”), and in the Company’s 2020 Equity Incentive Plan (as amended from time to time, the “Plan”).

 

Grant Date:    
     
Name of Participant:    
     
Last Four Digits of Participant’s Social Security Number:    
     
Number of Restricted Stock Units:    
     
Vesting Schedule:   The Restricted Stock Units shall vest in full on [●], subject to the Participant’s continued Service from the Grant Date through the vesting date. Notwithstanding the foregoing, the Restricted Stock Units are subject to vesting acceleration in accordance with Section 4(g) of the Matching Program.

 

You agree to all of the terms and conditions described in the Agreement, the Matching Program, and the Plan, copies of which will be provided on request, unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement, the Matching Program, and the Plan. You acknowledge that you have carefully reviewed the Matching Program and the Plan and agree that the Matching Program and the Plan, as applicable, will control in the event any provision of this Agreement should appear to be inconsistent.

 

Attachment
This is not a stock certificate or a negotiable instrument.

 

 

 

 

Walker & Dunlop, Inc.

2020 Equity Incentive Plan

 

Management Deferred Stock Unit Purchase matching Program

Restricted Stock Unit Agreement

 

Restricted Stock Units This Agreement evidences an award of Restricted Stock Units in the number set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement, the Matching Program, and the Plan.
   
Restricted Stock Unit Transferability Your Restricted Stock Units may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the Restricted Stock Units be made subject to execution, attachment, or similar process. If you attempt to do any of these things, you will immediately and automatically forfeit your Restricted Stock Units.
   
Vesting Your Restricted Stock Units will vest in accordance with the vesting schedule set forth on the cover sheet of this Agreement. Notwithstanding the foregoing, you will forfeit to the Company all of the unvested Restricted Stock Units on the date of your termination of Service.
   
Delivery Subject to Section 4(d) of the Matching Program, including without limitation any delay required by that section for “specified employees” within the meaning of Section 409A, delivery of the shares of Stock represented by your vested Restricted Stock Units will be made in accordance with your deferral election under the Matching Program and the Company’s Management Deferred Stock Unit Purchase Plan (the “Deferral Election”), which is attached to this Agreement as Exhibit A.
   
Evidence of Issuance The issuance of the shares of Stock with respect to the Restricted Stock Units will be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates.
   
Withholding You agree to satisfy any tax or withholding obligations in accordance with Section 8 of the Matching Program.
   

Notice and Non-Solicitation

The following notice and non-solicitation provisions will apply to you unless you have entered into an applicable employment or other written agreement with the Company or any Affiliate that has more restrictive notice and non-solicitation provisions (in which case, the more restrictive provisions in such employment or other written agreement will apply).

 

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  You agree as a condition of the Restricted Stock Units that in the event you decide to leave the Company or an Affiliate for any reason, you will provide the Company or the Affiliate with thirty (30) days’ prior notice of your departure (during which period, in the Company’s or its Affiliate’s sole discretion, you may be placed on paid leave), and you will not commence employment with anyone else during that period. For a period of ninety (90) days following the termination of your Service for any reason, you will not directly or indirectly solicit any employees of the Company or its Affiliates for employment or encourage any employee to leave the Company or any Affiliate.
   
Retention Rights This Agreement and the grant of Restricted Stock Units evidenced by this Agreement do not give you the right to be retained by the Company or any Affiliate in any capacity. Unless otherwise specified in an employment or other written agreement between the Company or any Affiliate, as applicable, and you, the Company or an Affiliate, as applicable, reserves the right to terminate your Service with the Company or an Affiliate at any time and for any reason.
   
Stockholder Rights You have no rights as a stockholder with respect to the Restricted Stock Units unless and until the Stock relating to the Restricted Stock Units has been delivered to you.  You will, however, be entitled to receive, upon the Company’s payment of a cash dividend on outstanding Stock, a Dividend Equivalent Right in additional Restricted Stock Units for each Restricted Stock Unit that you hold as of the record date for such dividend equal to the per-share dividend paid on the Stock. The Dividend Equivalent Rights shall be governed by your Deferral Election. 
   
Clawback

The Restricted Stock Units are subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company or Affiliate “clawback” or recoupment policy or Applicable Laws that require the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy or Applicable Laws.

 

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, and you are subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly negligent in failing to prevent the misconduct, you shall reimburse the Company the amount of any payment in settlement of the Restricted Stock Units earned or accrued during the twelve (12)-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

 

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Applicable Law This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
   
The Matching Program and the Plan

The text of the Matching Program and the Plan is incorporated into this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Matching Program or the Plan and have the meaning set forth in the Matching Program or the Plan, as applicable.

 

This Agreement, the Matching Program, and the Plan constitute the entire understanding between you and the Company regarding the Restricted Stock Units. Any prior agreements, commitments, or negotiations concerning the Restricted Stock Units are superseded.

   
Data Privacy To administer the Matching Program and the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Matching Program and the Plan. By accepting the Restricted Stock Units, you give explicit consent to the Company to process any such personal data.
   
Disclaimer of Rights The grant of Restricted Stock Units under this Agreement will in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to you. You will have no rights under this Agreement, the Matching Program, or the Plan other than those of a general unsecured creditor of the Company. Restricted Stock Units represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the Matching Program, the Plan, and this Agreement.
   
Electronic Delivery By accepting the Restricted Stock Units, you consent to receive documents related to the Restricted Stock Units by electronic delivery and, if requested, agree to participate in the Plan and Matching Program through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.

 

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Code Section 409A The grant of Restricted Stock Units under this Agreement is intended to comply with Code Section 409A (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A.  Notwithstanding anything to the contrary in the Plan, the Matching Program, or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty.  For purposes of this grant, a termination of Service only occurs upon an event that would be a Separation from Service within the meaning of Section 409A.

 

By accepting this Agreement, you agree to all of the terms and conditions described above, in the Matching Program, and in the Plan.

 

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Section 10: EX-99.8 (EXHIBIT 99.8)

Exhibit 99.8

 

Walker & Dunlop, Inc.

2020 Equity Incentive Plan

 

Management Deferred Stock Unit Purchase matching Program

Deferred Stock Unit Agreement

COVER SHEET

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants deferred stock units (the “Deferred Stock Units”) relating to shares of the Company’s common stock, par value $0.01 per share (the “Stock”), to the Participant named below, subject to the vesting conditions set forth below. Additional terms and conditions of the Deferred Stock Units are set forth on this cover sheet and in the attached Deferred Stock Unit Agreement (together, the “Agreement”), in the Company’s Management Deferred Stock Unit Purchase Matching Program (as amended from time to time, the “Matching Program”), and in the Company’s 2020 Equity Incentive Plan (as amended from time to time, the “Plan”).

 

Grant Date:    
     
Name of Participant:    
     
Last Four Digits of Participant’s
Social Security Number:
   
     
Number of Deferred Stock Units:    
     
Vesting Schedule:   The Deferred Stock Units shall vest in full on [●], subject to the Participant’s continued Service from the Grant Date through the vesting date. Notwithstanding the foregoing, the Deferred Stock Units are subject to vesting acceleration in accordance with Section 4(g) of the Matching Program.  

 

You agree to all of the terms and conditions described in the Agreement, the Matching Program, and the Plan, copies of which will be provided on request, unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement, the Matching Program, and the Plan. You acknowledge that you have carefully reviewed the Matching Program and the Plan and agree that the Matching Program and the Plan, as applicable, will control in the event any provision of this Agreement should appear to be inconsistent.

 

Attachment
This is not a stock certificate or a negotiable instrument.

 

 

 

 

Walker & Dunlop, Inc.

2020 Equity Incentive Plan

 

Management Deferred Stock Unit Purchase matching Program

Deferred Stock Unit Agreement

 

Deferred Stock Units   This Agreement evidences an award of Deferred Stock Units in the number set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement, the Matching Program, and the Plan.  
     
Deferred Stock Unit
Transferability
  Your Deferred Stock Units may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the Deferred Stock Units be made subject to execution, attachment, or similar process. If you attempt to do any of these things, you will immediately and automatically forfeit your Deferred Stock Units.  
     
Vesting   Your Deferred Stock Units will vest in accordance with the vesting schedule set forth on the cover sheet of this Agreement. Notwithstanding the foregoing, you will forfeit to the Company all of the unvested Deferred Stock Units on the date of your termination of Service.  
     
Delivery  

Subject to Section 4(d) of the Matching Program, including without limitation any delay required by that section for “specified employees” within the meaning of Section 409A, delivery of the shares of Stock represented by your vested Deferred Stock Units will be made in accordance with your deferral election under the Matching Program and the Company’s Management Deferred Stock Unit Purchase Plan (the “Deferral Election”), which is attached to his Agreement as Exhibit A.

 

Notwithstanding the foregoing, the Participant may request the issuance of the shares of Stock underlying the Deferred Stock Units as a result of an Unforeseeable Emergency in accordance with Section 5 of the Matching Program.  

     
Evidence of Issuance   The issuance of the shares of Stock with respect to the Deferred Stock Units will be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates.  
     
Withholding   You agree to satisfy any tax or withholding obligations in accordance with Section 8 of the Matching Program.  

 

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Notice and Non-
Solicitation
 

The following notice and non-solicitation provisions will apply to you unless you have entered into an applicable employment or other written agreement with the Company or any Affiliate that has more restrictive notice and non-solicitation provisions (in which case, the more restrictive provisions in such employment or other written agreement will apply).

 

You agree as a condition of the Deferred Stock Units that in the event you decide to leave the Company or an Affiliate for any reason, you will provide the Company or the Affiliate with thirty (30) days’ prior notice of your departure (during which period, in the Company’s or its Affiliate’s sole discretion, you may be placed on paid leave), and you will not commence employment with anyone else during that period. For a period of ninety (90) days following the termination of your Service for any reason, you will not directly or indirectly solicit any employees of the Company or its Affiliates for employment or encourage any employee to leave the Company or any Affiliate.  

     
Retention Rights   This Agreement and the grant of Deferred Stock Units evidenced by this Agreement do not give you the right to be retained by the Company or any Affiliate in any capacity. Unless otherwise specified in an employment or other written agreement between the Company or any Affiliate, as applicable, and you, the Company or any Affiliate, as applicable, reserves the right to terminate your Service with the Company or an Affiliate at any time and for any reason.  
     
Stockholder Rights   You have no rights as a stockholder with respect to the Deferred Stock Units unless and until the Stock relating to the Deferred Stock Units has been delivered to you.  You will, however, be entitled to receive, upon the Company’s payment of a cash dividend on outstanding Stock, a Dividend Equivalent Right in additional Deferred Stock Units for each Deferred Stock Unit that you hold as of the record date for such dividend equal to the per-share dividend paid on the Stock. The Dividend Equivalent Rights shall be governed by your Deferral Election.   
     
Clawback   The Deferred Stock Units are subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company or Affiliate “clawback” or recoupment policy or Applicable Laws that require the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy or Applicable Laws.

 

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    If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, and you are subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly negligent in failing to prevent the misconduct, you shall reimburse the Company the amount of any payment in settlement of the Deferred Stock Units earned or accrued during the twelve (12)-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.  
     
Applicable Law   This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.  
     
The Matching
Program and the
Plan
 

The text of the Matching Program and the Plan is incorporated into this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Matching Program or the Plan and have the meaning set forth in the Matching Program or the Plan, as applicble.

 

This Agreement, the Matching Program, and the Plan constitute the entire understanding between you and the Company regarding this grant. Any prior agreements, commitments, or negotiations concerning the Deferred Stock Units are superseded.  

     
Data Privacy   To administer the Matching Program and the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Matching Program and the Plan. By accepting the Deferred Stock Units, you give explicit consent to the Company to process any such personal data.  
     
Disclaimer of Rights   The grant of Deferred Stock Units under this Agreement will in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to you. You will have no rights under this Agreement, the Matching Program, or the Plan other than those of a general unsecured creditor of the Company. Deferred Stock Units represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the Matching Program, the Plan, and this Agreement.  

 

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Electronic Delivery   By accepting the Deferred Stock Units, you consent to receive documents related to the Deferred Stock Units by electronic delivery and, if requested, agree to participate in the Plan and Matching Program through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.  
     
Code Section 409A   The grant of Deferred Stock Units under this Agreement is intended to comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A.  Notwithstanding anything to the contrary in the Plan, the Matching Program, or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty.  For purposes of this grant, a termination of Service only occurs upon an event that would be a Separation from Service within the meaning of Section 409A.

 

By accepting this Agreement, you agree to all of the terms and conditions described above, in the Matching Program, and in the Plan.

 

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Section 11: EX-99.9 (EXHIBIT 99.9)

Exhibit 99.9

 

WALKER & DUNLOP, INC.

 

NON-QUALIFIED STOCK OPTION TRANSFER AGREEMENT

 

This Non-Qualified Stock Option Transfer Agreement (this “Agreement”) is entered into as of _________ __, 2020 (the “Effective Date”), by and among Walker & Dunlop, Inc., a Maryland corporation (the “Company”), [NAME OF GRANTEE] (the “Transferor”) and [_______________], dated [____] (the “Transferee”). The Company, the Transferor and the Transferee are each sometimes referred to herein as a “Party,” and collectively sometimes referred to herein as the “Parties.”

 

RECITALS

 

WHEREAS, on [OPTION GRANT DATE], the Company granted to the Transferor an option (the “Granted Option”) to purchase [___] shares of common stock of the Company, par value $0.01 per share, subject to the terms and conditions of the Walker & Dunlop, Inc. 2020 Equity Incentive Plan (as amended, the “Plan”) and a Non-Qualified Stock Option Agreement thereunder by and between the Company and the Transferor (as amended, the “Stock Option Agreement”);

 

WHEREAS, the Plan is attached hereto as Exhibit A and the Stock Option Agreement is attached hereto as Exhibit B; and

 

WHEREAS, the Transferor desires to transfer the Granted Option with respect to [___] vested shares (the “Option”) to the Transferee and the Company desires to consent to such transfer, all in accordance with the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Company, the Transferor and the Transferee agree as follows:

 

AGREEMENT

 

1.             Transfer of the Option.

 

(a)               As of the Effective Date, the Transferor hereby transfers to the Transferee the Option (the “Transfer”) and the Transferee hereby accepts the transfer of the Option by the Transferor.

 

(b)               The Transferee and the Transferor acknowledge and agree that the Transferee shall be bound by all of the terms and conditions of the Plan and the Stock Option Agreement as if the Transferee were the Grantee (as named in the Stock Option Agreement) and as if the Transferee had accepted the Stock Option Agreement; provided, however, that references in the Plan and the Stock Option Agreement to (A) the service of the Grantee or (B) the termination of service of the Grantee shall be deemed to continue to be references to (X) the service of the Transferor or (Y) the termination of service of the Transferor, as applicable, and the Transferor shall remain responsible for any withholding taxes that may be due in connection with the exercise or other disposition of the Option.

 

(c)               The Company consents to the Transfer in accordance with Section 8.10 of the Plan and the section of the Stock Option Agreement entitled “Transfer of Option”. Except as expressly set forth in this Section 1(c), nothing in this Agreement shall be deemed a waiver of any of the Company’s rights under the Plan or the Stock Option Agreement, including with respect to the Company’s rights to withhold consent, in its discretion, to future transfers.

 

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2.             Representations and Warranties by the Transferor and Transferee.

 

(a)               The Transferor has delivered to the Company a true and complete copy of the instrument creating the Transferee (including all amendments thereto). The Transferee qualifies as a “Family Member” within the meaning of the Plan.

 

(b)               The Transferor hereby represents and acknowledges that the Transferor may be subject to certain federal and state tax liability in connection with the Transfer of the Option and/or the exercise of the Option. The Transferor represents that Transferor has consulted Transferor’s individual tax advisor regarding the specific tax consequences of the Transfer and is not relying on any statements or representations by the Company or its advisors with respect thereto. The Transferor hereby covenants and agrees that the Transferor will be responsible for paying to the Company or its designated subsidiary any amount of any applicable withholding taxes required to be withheld with respect to the exercise or other disposition of the Option.

 

(c)               The Transferee represents and warrants that this Agreement has been duly authorized, executed and delivered by its duly authorized representative.

 

3.             Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed as follows:

 

(a)                if to the Company, to the attention of the General Counsel of the Company at the Company’s principal executive offices;

 

(b)                if to the Transferor, to the address on file with the Company;

 

(c)                if to the Transferee, to the address shown below beneath the Transferee’s signature; or

 

(d)                to a Party at such other address as such Party may designate in writing from time to time to the other Parties.

 

4.             Further Instruments. The Parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

5.             Entire Agreement. The terms of the Plan and the Stock Option Agreement are incorporated herein by reference. This Agreement, together with the Plan and the Stock Option Agreement, constitutes the entire agreement of the Parties and supersedes in its entirety all prior undertakings and agreements of the Parties with respect to the subject matter hereof.

 

6.             Governing Law. The validity and construction of this Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive laws of any other jurisdiction.

 

7.             Severability. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

 

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8.            Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the Parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

 

9.            Amendment. This Agreement may be amended only by a written instrument signed by the Parties hereto.

 

10.          Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which together shall constitute one document.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

 

  WALKER & DUNLOP, INC.
 
 
  By:  
  Name:  
  Title:  

 

 TRANSFEROR
  
  
 [____________]
  

 

 TRANSFEREE
  
  
 By:  
 Name:  
 Title:  
  
 Address:  
    
    
    

 

 

 

EXHIBIT A

 

 

 

 

 

WALKER & DUNLOP, INC.
2020 EQUITY INCENTIVE PLAN

 

 

 

 

 

TABLE OF CONTENTS 

 

      Page
1. PURPOSE A-1
2. DEFINITIONS A-1
3. ADMINISTRATION OF THE PLAN A-7
  3.1 Committee A-7
    3.1.1    Powers and Authorities. A-7
    3.1.2    Composition of the Committee A-8
    3.1.3    Other Committees A-8
    3.1.4    Delegation by Committee A-8
  3.2 Board A-9
  3.3 Terms of Awards A-9
  3.4 Forfeiture; Recoupment A-9
  3.5 No Repricing without Stockholder Approval A-10
  3.6 Deferral Arrangement A-10
  3.7 No Liability A-10
  3.8 Stock Issuance/Book-Entry. A-11
4. STOCK SUBJECT TO THE PLAN A-11
  4.1 Number of Shares of Stock Reserved for Awards A-11
  4.2 Adjustments in Authorized Shares of Stock A-11
  4.3 Share Usage A-11
5. TERM; AMENDMENT, SUSPENSION, AND TERMINATION A-12
  5.1 Term A-12
  5.2 Amendment, Suspension, and Termination of the Plan A-12
6. AWARD ELIGIBILITY AND LIMITATIONS A-12
  6.1 Service Providers and Other Persons A-12
  6.2 Limitation on Shares of Stock Subject to Awards and Cash Awards A-13
  6.3 Director Compensation A-13
  6.4 Stand-Alone, Additional, Tandem and Substitute Awards. A-13
7. AWARD AGREEMENT A-14
8. TERMS AND CONDITIONS OF OPTIONS A-14
  8.1 Option Price A-14
  8.2 Vesting and Exercisability A-14
  8.3 Term A-14

 

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      Page
  8.4 Termination of Service A-14
  8.5 Limitations on Exercise of Option A-14
  8.6 Method of Exercise A-15
  8.7 Rights of Holders of Options A-15
  8.8 Delivery of Stock A-15
  8.9 Transferability of Options A-15
  8.10 Family Transfers A-15
  8.11 Limitations on Incentive Stock Options A-16
  8.12 Notice of Disqualifying Disposition A-16
9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS A-16
  9.1 Right to Payment and SAR Exercise Price A-16
  9.2 Other Terms A-16
  9.3 Term A-16
  9.4 Rights of Holders of SARs A-17
  9.5 Transferability of SARs A-17
  9.6 Family Transfers A-17
10. TERMS AND CONDITIONS OF RESTRICTED STOCK, RESTRICTED STOCK UNITS, AND DEFERRED STOCK UNITS A-17
  10.1 Grant of Restricted Stock, Restricted Stock Units, or Deferred Stock Units A-17
  10.2 Restrictions A-17
  10.3 Registration; Restricted Stock Certificates A-18
  10.4 Rights of Holders of Restricted Stock A-18
  10.5 Rights of Holders of Restricted Stock Units and Deferred Stock Units A-18
    10.5.1    Voting and Dividend Rights A-18
    10.5.2    Creditor's Rights A-19
  10.6 Termination of Service A-19
  10.7 Purchase of Restricted Stock and Shares of Stock Subject to Restricted Stock Units and Deferred Stock Units A-19
  10.8 Delivery of Shares of Stock A-19
11. TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY-BASED AWARDS A-19
  11.1 Unrestricted Stock A-19
  11.2 Other Equity-Based Awards A-20

 

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      Page
12. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK A-20
  12.1 General Rule A-20
  12.2 Surrender of Shares of Stock A-20
  12.3 Cashless Exercise A-20
  12.4 Other Forms of Payment A-20
13. TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS A-21
  13.1 Dividend Equivalent Rights A-21
  13.2 Termination of Service A-21
14. TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS A-21
  14.1 Grant of Performance Awards and Annual Incentive Awards A-21
  14.2 Value of Performance Awards and Annual Incentive Awards A-21
  14.3 Earning of Performance Awards and Annual Incentive Awards A-21
  14.4 Form and Timing of Payment of Performance Awards and Annual Incentive Awards A-22
  14.5 Performance Conditions A-22
    14.5.1    Performance Goals Generally A-22
    14.5.2    Settlement of Awards; Other Terms A-22
    14.5.3    Performance Measures A-22
    14.5.4    Evaluation of Performance A-24
  14.6 Provisions Applicable to Section 162(m) Awards A-24
15. PARACHUTE LIMITATIONS A-25
16. REQUIREMENTS OF LAW A-25
  16.1 General A-25
  16.2 Rule 16b-3 A-26
17. EFFECT OF CHANGES IN CAPITALIZATION A-26
  17.1 Changes in Stock. A-26
  17.2 Reorganization in Which the Company Is the Surviving Entity Which Does not Constitute a Change in Control A-27
  17.3 Change in Control in which Awards are not Assumed A-27
  17.4 Change in Control in which Awards are Assumed A-28
  17.5 Adjustments A-29
  17.6 No Limitations on Company A-29

 

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      Page
18. GENERAL PROVISIONS A-29
  18.1 Disclaimer of Rights A-29
  18.2 Nonexclusivity of the Plan A-29
  18.3 Withholding Taxes A-30
  18.4 Captions A-30
  18.5 Other Provisions A-30
  18.6 Number and Gender A-30
  18.7 Severability A-30
  18.8 Governing Law A-30
  18.9 Section 409A of the Code A-31

 

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WALKER & DUNLOP, INC.
2020 EQUITY INCENTIVE PLAN

 

Walker & Dunlop, Inc., a Maryland corporation (the "Company"), sets forth herein the terms of its 2020 Equity Incentive Plan (the "Plan"), as follows:

 

1.     PURPOSE

 

This Plan is intended to (i) provide incentive to eligible persons to stimulate their efforts toward the success of the Company and to operate and manage its business in a manner that will provide for the long-term growth and profitability of the Company and that will benefit the stockholders and other important stakeholders of the Company, including its employees and customers; and (ii) provide a means of recruiting, rewarding and retaining key personnel. To this end, the Plan provides for the grant of Options, Stock Appreciation Rights, Restricted Stock, Unrestricted Stock, Restricted Stock Units (including Deferred Stock Units), Dividend Equivalent Rights, Performance Awards, Annual Incentive Awards and Other Equity-Based Awards. Any of these Awards may, but need not, be made as performance incentives to reward attainment of annual or long-term performance goals in accordance with the terms of the Plan. Options granted under the Plan may be Non-qualified Stock Options or Incentive Stock Options, as provided herein.

 

The Plan is an amendment and restatement of the 2015 Equity Incentive Plan, as amended from time to time and originally approved by the Board on March 31, 2015 and by the Company's stockholders on June 4, 2015 (the "2015 Plan"), which 2015 Plan was an amendment and restatement of the 2010 Equity Incentive Plan, as amended from time to time and originally approved by the Board on September 27, 2010 and by the Company's stockholders on November 29, 2010 (together with the 2015 Plan, the "Prior Plan"). In the event that the Company's stockholders do not approve this Plan, the Prior Plan will continue in full force and effect on its terms and conditions as in effect immediately prior to the date this Plan is approved by the Board.

 

2.     DEFINITIONS

 

For purposes of interpreting the Plan and related documents (including Award Agreements), the following capitalized terms shall have the meanings specified below, unless the context clearly indicates otherwise:

 

2.1   "Affiliate" means, with respect to the Company, any Person that controls, is controlled by, or is under common control with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary. For purposes of granting Options or Stock Appreciation Rights, an entity may not be considered an Affiliate of the Company unless the Company holds a Controlling Interest in such entity.

 

2.2   "Annual Incentive Award" means an Award, denominated in cash, made subject to attainment of performance goals (as described in Section 14) over a Performance Period of up to one (1) year (the Company's fiscal year, unless otherwise specified by the Board or the Committee).

 

2.3   "Applicable Laws" means the legal requirements relating to the Plan and the Awards under (i) applicable provisions of the Code, the Securities Act, the Exchange Act, any rules or regulations thereunder, and any other laws, rules, regulations, and government orders of any jurisdiction applicable to the Company or its Affiliates, (ii) applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to Awards granted to residents therein, and (iii) the rules of any Stock Exchange or Securities Market on which the Stock is listed or publicly traded.

 

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2.4   "Award" means a grant under the Plan of an Option, Stock Appreciation Right, Restricted Stock, Unrestricted Stock, Restricted Stock Unit, Dividend Equivalent Right, Performance Award, Annual Incentive Award, or Other Equity-Based Award.

 

2.5   "Award Agreement" means the written agreement, in such written, electronic, or other form as determined by the Committee, between the Company and a Grantee that evidences and sets forth the terms and conditions of an Award.

 

2.6   "Benefit Arrangement" means any formal or informal plan or other arrangement for the direct or indirect provision of compensation to a Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee.

 

2.7   "Board" means the Board of Directors of the Company.

 

2.8   "Capital Stock" means with respect to any Person, any and all shares, interests, participations, or other equivalents (however designated, whether voting or non-voting) in equity of such Person, including, without limitation, all shares of Stock.

 

2.9   "Cause" shall have the meaning set forth in an applicable written agreement between a Grantee and the Company or an Affiliate, and in the absence of such agreement, means, with respect to any Grantee and as determined by the Committee, (i) gross negligence or willful misconduct in connection with the performance of duties; (ii) conviction of, or pleading guilty or nolo contendere to, a criminal offense (other than minor traffic offenses); (iii) a material violation of a Company policy; or (iv) a material breach of any term of any employment, consulting, or other services, confidentiality, intellectual property, or non-competition agreements, if any, between the Grantee and the Company or an Affiliate.

 

2.10 "Change in Control" means, subject to Section 18.9, the occurrence of any of the following:

 

(i)  The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (1) the then outstanding shares of Stock (the "Outstanding Company Stock") or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); providedhowever, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (a) any acquisition by the Company; (b) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or trust controlled by the Company; and (c) any acquisition by any Person pursuant to a transaction which complies with clauses (1), (2), and (3) of Section 2.10(iii); or

 

(ii)  Individuals who, as of the date this Plan, as amended and restated, is approved by the Company's stockholders, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; providedhowever, that any individual becoming a director subsequent to such date whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

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(iii)  Consummation of a reorganization, merger, or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding common shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be; (2) no Person (excluding any corporation or trust resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation or trust resulting from such Business Combination) beneficially owns, directly or indirectly, fifty percent (50%) or more of the then outstanding shares of the corporation or trust resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation or trust except to the extent that such ownership existed prior to the Business Combination; and (3) at least a majority of the members of the board of directors of the corporation or trust resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

 

(iv)  Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company and consummation of such transaction.

 

The Board shall have full and final authority, in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control, and any incidental matters relating thereto.

 

2.11 "Code" means the Internal Revenue Code of 1986, as amended, as now in effect or as hereafter amended, and any successor thereto. References in the Plan to any Code Sections shall be deemed to include, as applicable, regulations and guidance promulgated under such Code Section.

 

2.12 "Committee" means a committee of, and designated from time to time by resolution of, the Board, which shall be constituted as provided in Section 3.1 (or, if no Committee has been so designated, the Board itself).

 

2.13 "Company" means Walker & Dunlop, Inc., a Maryland corporation, and any successor thereto.

 

2.14 "Controlling Interest" shall have the meaning set forth in Treasury Regulation Section 1.414(c)-2(b)(2)(i); provided that (i) except as specified in clause (ii) below, an interest of "at least 50 percent" shall be used instead of an interest of "at least 80 percent" in each case where "at least 80 percent" appears in Treasury Regulation Section 1.414(c)-2(b)(2)(i) and (ii) where a grant of Options or Stock Appreciation Rights is based upon a legitimate business criterion, an interest of "at least 20 percent" shall be used instead of an interest of "at least 80 percent" in each case where "at least 80 percent" appears in Treasury Regulation Section 1.414(c)-2(b)(2)(i).

 

2.15 "Deferred Stock Unit" means a Restricted Stock Unit, the terms of which provide for delivery of the underlying shares of Stock, cash, or a combination thereof subsequent to the date of vesting, at a time or times consistent with the requirements of Code Section 409A.

 

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2.16 "Disability" means the Grantee is unable to perform each of the essential duties of such Grantee's position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than twelve (12) months; providedhowever, that, with respect to rules regarding the expiration of an Incentive Stock Option following termination of a Grantee's Service, Disability shall mean the Grantee is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

 

2.17 "Disqualified Individual" shall have the meaning set forth in Code Section 280G(c).

 

2.18 "Dividend Equivalent Right" means a right, granted to a Grantee pursuant to Section 13, entitling the Grantee thereof to receive, or to receive credits for the future payments of, cash, Stock, other Awards, or other property equal in value to dividend payments or distributions, or other periodic payments, declared or paid with respect to a number of shares of Stock specified in such Dividend Equivalent Right (or other Award to which such Dividend Equivalent Right relates) as if such shares of Stock had been issued to and held by the Grantee as of the record date.

 

2.19 "Exchange Act" means the Securities Exchange Act of 1934, as amended, as now in effect or as hereafter amended, and any successor thereto.

 

2.20 "Fair Market Value" means the fair market value of a share of Stock for purposes of the Plan, which shall be, as of any date of determination:

 

(i)  If on such date the shares of Stock are listed on a Stock Exchange or are publicly traded on another Securities Market, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock as reported on such Stock Exchange or such Securities Market (provided that, if there is more than one such Stock Exchange or Securities Market, the Committee shall designate the appropriate Stock Exchange or Securities Market for purposes of the Fair Market Value determination). If there is no such reported closing price on such date, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock on the last preceding day on which any sale of Stock shall have been reported on such Stock Exchange or such Securities Market.

 

(ii)  If on such date the shares of Stock are not listed on a Stock Exchange or publicly traded on a Securities Market, the Fair Market Value of a share of Stock shall be the value of a share of Stock as determined by the Committee by the reasonable application of a reasonable valuation method, in a manner consistent with Code Section 409A.

 

Notwithstanding this Section 2.21 or Section 18.3, for purposes of determining taxable income and the amount of the related tax withholding obligation pursuant to Section 18.3, the Fair Market Value will be determined by the Committee in good faith using any reasonable method as it deems appropriate, to be applied consistently with respect to Grantees; providedfurther, that the Committee shall determine the Fair Market Value of shares of Stock for tax withholding obligations due in connection with sales, by or on behalf of a Grantee, of such shares of Stock subject to an Award to pay the Option Price, SAR Exercise Price, and/or any tax withholding obligation on the same date on which such shares may first be sold pursuant to the terms of the applicable Award Agreement (including broker-assisted cashless exercises of Options and Stock Appreciation Rights and sell-to-cover transactions) in any manner consistent with applicable provisions of the Code, including, without limitation, using the sale price of such shares on such date (or if sales of such shares are effectuated at more than one sale price, the weighted average sale price of such shares on such date) as the Fair Market Value of such shares, so long as such Grantee has provided the Company, or its designee or agent, with advance written notice of such sale.

 

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2.21 "Family Member" means, with respect to a Grantee as of any date of determination, (i) a Person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of such Grantee; (ii) any Person sharing such Grantee's household (other than a tenant or employee); (iii) a trust in which any one or more of the Persons specified in clauses (i) and (ii) of this Section 2.22 (and such Grantee) own more than fifty percent (50%) of the beneficial interest; (iv) a foundation in which any one or more of the Persons specified in clauses (i) and (ii) of this Section 2.22 (and such Grantee) control the management of assets; and (v) any other entity in which one or more of these persons (or the Grantee) own more than fifty percent (50%) of the voting interests.

 

2.22 "Grant Date" means, as determined by the Committee, the latest to occur of (i) the date as of which the Committee approves the Award, (ii) the date on which the recipient of an Award first becomes eligible to receive an Award under Section 6, or (iii) such other subsequent date specified by the Committee in the corporate action approving the Award.

 

2.23 "Grantee" means a person who receives or holds an Award under the Plan.

 

2.24 "Incentive Stock Option" means an "incentive stock option" within the meaning of Code Section 422.

 

2.25 "Non-Employee Director" shall have the meaning set forth in Rule 16b-3 under the Exchange Act.

 

2.26 "Non-qualified Stock Option" means an Option that is not an Incentive Stock Option.

 

2.27 "Officer" shall have the meaning set forth in Rule 16a-1(f) under the Exchange Act.

 

2.28 "Option" means an option to purchase one or more shares of Stock at a specified Option Price awarded to a Grantee pursuant to Section 8.

 

2.29 "Option Price" means the per share exercise price for shares of Stock subject to an Option.

 

2.30 "Other Agreement" means any agreement, contract, or understanding heretofore or hereafter entered into by the Grantee with the Company or an Affiliate, except an agreement, contract, or understanding that expressly addresses Code Section 280G and/or Code Section 4999.

 

2.31 "Other Equity-Based Award" means an Award representing a right or other interest that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, other than an Option, Stock Appreciation Right, Restricted Stock, Unrestricted Stock, Restricted Stock Unit, Dividend Equivalent Right, Performance Award, or Annual Incentive Award.

 

2.32 "Parachute Payment" shall mean a "parachute payment" within the meaning of Code Section 280G(b)(2).

 

2.33 "Performance Award" means an Award made subject to the attainment of performance goals (as described in Section 14) over a Performance Period as specified by the Committee.

 

2.34 "Performance Measures" means measures on which the performance goal or goals under Performance Awards are based, including, but not limited to, those set forth in Section 14.5.3.

 

2.35 "Performance Period" means the period of time, up to a maximum of ten (10) years with respect to Performance Awards and one (1) year with respect to Annual Incentive Awards, during or over which the performance goals under Performance Awards and Annual Incentive Awards must be met in order to determine the degree of payout and/or vesting with respect to any such Performance Award or Annual Incentive Award.

 

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2.36 "Person" means an individual, corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof; provided that, for purposes of Section 2.10, Person shall have the meaning set forth in Sections 13(d) and 14(d)(2) of the Exchange Act.

 

2.37 "Plan" means this Walker & Dunlop, Inc. 2020 Equity Incentive Plan, as amended from time to time.

 

2.38 "Purchase Price" means the purchase price for each share of Stock pursuant to a grant of Restricted Stock, Restricted Stock Units, or Unrestricted Stock.

 

2.39 "Reporting Person" means a person who is required to file reports under Section 16(a) of the Exchange Act.

 

2.40 "Restricted Period" means a period of time established by the Committee during which an Award of Restricted Stock, Restricted Stock Units, or Deferred Stock Units is subject to restrictions.

 

2.41 "Restricted Stock" means shares of Stock awarded to a Grantee pursuant to Section 10.

 

2.42 "Restricted Stock Unit" means a bookkeeping entry representing the equivalent of one share of Stock awarded to a Grantee pursuant to Section 10 that may be settled, subject to the terms and conditions of the applicable Award Agreement, in shares of Stock, cash, or a combination thereof.

 

2.43 "SAR Exercise Price" means the per share exercise price of a SAR.

 

2.44 "Securities Act" means the Securities Act of 1933, as amended, as now in effect or as hereafter amended, and any successor thereto.

 

2.45 "Securities Market" means an established national or regional securities market.

 

2.46 "Separation from Service" shall have the meaning set forth in Code Section 409A.

 

2.47 "Service" means service qualifying a Grantee as a Service Provider to the Company or an Affiliate. Unless otherwise stated in the applicable Award Agreement, a Grantee's change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues to be a Service Provider to the Company or an Affiliate. Subject to the preceding sentence, any determination by the Committee whether a termination of Service shall have occurred for purposes of the Plan shall be final, binding and conclusive. If a Service Provider's employment or other Service relationship is with an Affiliate and the applicable Person ceases to be an Affiliate, a termination of Service shall be deemed to have occurred when such Person ceases to be an Affiliate unless the Service Provider transfers his or her employment or other Service relationship to the Company or any other Affiliate.

 

2.48 "Service Provider" means (i) an employee, officer, or director of the Company or an Affiliate, or (ii) a consultant or adviser to the Company or an Affiliate (1) who is a natural person, (2) who is currently providing bona fide services to the Company or an Affiliate, and (3) whose services are not in connection with the Company's sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company's Stock.

 

2.49 "Service Recipient Stock" shall have the meaning set forth in Code Section 409A.

 

2.50 "Share Limit" shall have the meaning set forth in Section 4.1.

 

2.51 "Short-Term Deferral Period" shall have the meaning set forth in Code Section 409A.

 

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2.52 "Stock" means the common stock, par value $0.01 per share, of the Company, or any security into which shares of Stock may be changed or for which shares of Stock may be exchanged as provided in Section 17.1.

 

2.53 "Stock Appreciation Right" or "SAR" means a right granted to a Grantee pursuant to Section 9.

 

2.54 "Stock Exchange" means the New York Stock Exchange, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, or another established national or regional stock exchange.

 

2.55 "Subsidiary" means any corporation (other than the Company) or non-corporate entity with respect to which the Company owns, directly or indirectly, fifty percent (50%) or more of the total combined voting power of all classes of stock. In addition, any other entity may be designated by the Committee as a Subsidiary, provided that (i) such entity could be considered as a subsidiary according to generally accepted accounting principles in the United States of America and (ii) in the case of an Award of Options or Stock Appreciation Rights, such Award would be considered to be granted in respect of Service Recipient Stock under Code Section 409A.

 

2.56 "Substitute Award" means an Award granted upon assumption of, or in substitution for, outstanding awards previously granted under a compensatory plan of the Company, an Affiliate, or other business entity acquired or to be acquired by the Company or an Affiliate or with which the Company or an Affiliate has combined or will combine.

 

2.57 "Ten Percent Stockholder" means a natural Person who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding voting securities of the Company, the Company's parent (if any), or any of the Company's Subsidiaries. In determining stock ownership, the attribution rules of Code Section 424(d) shall be applied.

 

2.58 "Unrestricted Stock" means Stock that is free of any restrictions granted pursuant to Section 11.

 

3.     ADMINISTRATION OF THE PLAN

 

3.1    Committee.

 

3.1.1    Powers and Authorities.

 

The Committee shall administer the Plan and shall have such powers and authorities related to the administration of the Plan as are consistent with the Company's certificate of incorporation and bylaws and Applicable Laws. Without limiting the generality of the foregoing, the Committee shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award, or any Award Agreement and shall have full power and authority to take all such other actions and to make all such other determinations not inconsistent with the specific terms and provisions of the Plan which the Committee deems to be necessary or appropriate to the administration of the Plan, any Award, or any Award Agreement. All such actions and determinations shall be made by (i) the affirmative vote of a majority of the members of the Committee present at a meeting at which a quorum is present, or (ii) the unanimous consent of the members of the Committee executed in writing or evidenced by electronic transmission in accordance with the Company's certificate of incorporation and bylaws and Applicable Laws. Unless otherwise expressly determined by the Board, the Committee shall have the authority to interpret and construe all provisions of the Plan, any Award, and any Award Agreement, and any such interpretation or construction, and any other determination contemplated to be made under the Plan or any Award Agreement, by the Committee shall be final, binding, and conclusive on all Persons, whether or not expressly provided for in any provision of the Plan, such Award, or such Award Agreement.

 

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In the event that the Plan, any Award, or any Award Agreement provides for any action to be taken by the Board or any determination to be made by the Board, such action may be taken or such determination may be made by the Committee constituted in accordance with this Section 3.1.1 if the Board has delegated the power and authority to do so to such Committee.

 

3.1.2    Composition of the Committee.

 

The Committee shall be a committee composed of not fewer than two (2) directors of the Company designated by the Board to administer the Plan. Each member of the Committee shall be (i) a Non-Employee Director and (ii) an independent director in accordance with the rules of any Stock Exchange on which the Stock is listed; provided that any action taken by the Committee shall be valid and effective whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 3.1.2 or otherwise provided in any charter of the Committee. Without limiting the generality of the foregoing, the Committee may be the Compensation Committee of the Board or a subcommittee thereof if the Compensation Committee of the Board or such subcommittee satisfies the foregoing requirements.

 

3.1.3    Other Committees.

 

The Board also may appoint one or more committees of the Board, each composed of one or more directors of the Company, which (i) may administer the Plan with respect to Grantees who are not Officers or directors of the Company, (ii) may grant Awards under the Plan to such Grantees, and (iii) may determine all terms of such Awards, in each case, subject, if applicable, to the requirements of Rule 16b-3 under the Exchange Act and the rules of any Stock Exchange or Securities Market on which the Stock is listed or publicly traded.

 

3.1.4    Delegation by Committee.

 

To the extent permitted by Applicable Laws, the Committee may, by resolution, delegate some or all of its authority with respect to the Plan and Awards to the Chief Executive Officer of the Company and/or any other officer of the Company designated by the Committee; provided that the Committee may not delegate its authority hereunder (i) to make Awards to directors of the Company, (ii) to make Awards to employees who are Officers or officers of the Company who are delegated authority by the Committee pursuant to this Section 3.1.4, or (iii) to interpret the Plan, any Award, or any Award Agreement. Any delegation hereunder will be subject to the restrictions and limits that the Committee specifies at the time of such delegation or thereafter. Nothing in the Plan will be construed as obligating the Committee to delegate authority to any officer of the Company, and the Committee may at any time rescind the authority delegated to an officer of the Company appointed hereunder and delegate authority to one or more other officers of the Company. At all times, an officer of the Company delegated authority pursuant to this Section 3.1.4 will serve in such capacity at the pleasure of the Committee. Any action undertaken by any such officer of the Company in accordance with the Committee's delegation of authority will have the same force and effect as if undertaken directly by the Committee, and any reference in the Plan to the "Committee" will, to the extent consistent with the terms and limitations of such delegation, be deemed to include a reference to each such officer.

 

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3.2    Board.

 

The Board, from time to time, may exercise any or all of the powers and authorities related to the administration and implementation of the Plan, as set forth in Section 3.1 and other applicable provisions of the Plan, as the Board shall determine, consistent with the Company's certificate of incorporation and bylaws and Applicable Laws.

 

3.3    Terms of Awards.

 

Subject to the other terms and conditions of the Plan, the Committee shall have full and final authority to:

 

(i)  designate Grantees;

 

(ii)  determine the type or types of Awards to be made to a Grantee;

 

(iii)  determine the number of shares of Stock to be subject to an Award or to which an Award relates;

 

(iv)  establish the terms and conditions of each Award (including the Option Price, SAR Exercise Price, and Purchase Price; the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock subject thereto; the treatment of an Award in the event of a Change in Control (subject to applicable agreements); and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options);

 

(v)  prescribe the form of each Award Agreement evidencing an Award;

 

(vi)  subject to the limitation on repricing in Section 3.5, amend, modify, or supplement the terms of any outstanding Award, which authority specifically includes the authority, in order to effectuate the purposes of the Plan but without amending the Plan, to make Awards or to modify outstanding Awards made to eligible natural Persons who are foreign nationals or are natural Persons who are employed outside the United States to reflect differences in local law, tax policy, or custom; provided that, notwithstanding the foregoing, no amendment, modification, or supplement of the terms of any outstanding Award shall, without the consent of the Grantee, impair the Grantee's rights under such Award; and

 

(vii)  make Substitute Awards.

 

3.4    Forfeiture; Recoupment.

 

The Committee may reserve the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee with respect to an Award thereunder on account of actions taken by, or failed to be taken by, such Grantee in violation or breach of or in conflict with any (i) employment agreement, (ii) non-competition agreement, (iii) agreement prohibiting solicitation of employees or clients of the Company or an Affiliate, (iv) confidentiality obligation with respect to the Company or an Affiliate, (v) Company or Affiliate policy or procedure, (vi) other agreement, or (vii) other obligation of such Grantee to the Company or an Affiliate, as and to the extent specified in such Award Agreement. Furthermore, if the Grantee of an outstanding Award is an employee of the Company or an Affiliate thereof and such Grantee's Service is terminated for Cause, the Committee may annul such Grantee's outstanding Award as of the date of the Grantee's termination of Service for Cause.

 

Any Award granted pursuant to the Plan is subject to mandatory repayment by the Grantee to the Company (x) to the extent set forth in the Plan or an Award Agreement or (y) to the extent the Grantee is, or in the future becomes, subject to (1) any Company or Affiliate "clawback" or recoupment policy that is adopted to comply with the requirements of any Applicable Laws or (2) any Applicable Laws which impose mandatory recoupment, under circumstances set forth in such Applicable Laws.

 

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Furthermore, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, the natural Persons subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 and any Grantee who knowingly engaged in the misconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or was grossly negligent in failing to prevent the misconduct, shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the twelve (12)-month period following the first public issuance or filing (whichever first occurred) with the United States Securities and Exchange Commission of the financial document that contained such material noncompliance.

 

Notwithstanding any other provision of this Plan or any provision of any Award Agreement, if the Company is required to prepare an accounting restatement, then a Grantee shall forfeit any cash or Stock received in connection with an Award (or an amount equal to the Fair Market Value of such Stock on the date of delivery if the Grantee no longer holds the shares of Stock) if, pursuant to the terms of the Award Agreement for such Award, the amount of the Award earned or the vesting in the Award was explicitly based on the achievement of pre-established performance goals set forth in the Award Agreement (including earnings, gains, or other criteria) that are later determined, as a result of the accounting restatement, not to have been achieved.

 

3.5    No Repricing without Stockholder Approval.

 

Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, distribution (whether in the form of cash, shares of Stock, other securities, or other property), stock split, extraordinary dividend, recapitalization, Change in Control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Stock, or other securities or similar transaction), the Company may not: (i) amend the terms of outstanding Options or SARs to reduce the Option Price or SAR Exercise Price, as applicable, of such outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange for or substitution of Options or SARs with an Option Price or SAR Exercise Price, as applicable, that is less than the Option Price or SAR Exercise Price, as applicable, of the original Options or SARs; or (iii) cancel outstanding Options or SARs with an Option Price or SAR Exercise Price, as applicable, above the current Fair Market Value in exchange for cash or other securities, in each case, unless such action (a) is subject to and approved by the Company's stockholders or (b) would not be deemed to be a repricing under the rules of any Stock Exchange or Securities Market on which the Stock is listed or publicly traded.

 

3.6    Deferral Arrangement.

 

The Committee may permit or require the deferral of any payment pursuant to an Award into a deferred compensation arrangement, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest or Dividend Equivalent Rights and, in connection therewith, provisions for converting such credits into Deferred Stock Units and for restricting deferrals to comply with hardship distribution rules affecting tax-qualified retirement plans subject to Code Section 401(k)(2)(B)(IV); provided that no Dividend Equivalent Rights may be granted in connection with, or related to, an Award of Options or SARs. Any such deferrals shall be made in a manner that complies with Code Section 409A, including, if applicable, with respect to when a Separation from Service occurs.

 

3.7    No Liability.

 

No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan, any Award, or any Award Agreement. Notwithstanding any provision of the Plan to the contrary, neither the Company, an Affiliate, the Board, the Committee, nor any person acting on behalf of (including, without limitation, designees of) the Company, an Affiliate, the Board, or the Committee will be liable to any Grantee or to the estate or beneficiary of any Grantee or to any other holder of an Award under the Plan by reason of any acceleration of income, or any additional tax (including any interest and penalties), asserted by reason of the failure of an Award to satisfy the requirements of Code Section 422 or Code Section 409A or by reason of Code Section 4999, or otherwise asserted with respect to the Award; provided that this Section 3.7 shall not affect any of the rights or obligations set forth in an applicable agreement between the Grantee and the Company or an Affiliate.

 

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3.8    Stock Issuance/Book-Entry.

 

Notwithstanding any provision of the Plan to the contrary, the ownership of the shares of Stock issued under the Plan may be evidenced in such a manner as the Committee, in its sole discretion, deems appropriate, including, without limitation, book-entry or direct registration or the issuance of one or more share certificates.

 

4.     STOCK SUBJECT TO THE PLAN

 

4.1    Number of Shares of Stock Reserved for Awards.

 

Subject to adjustment as provided in Section 4.2 and Section 17, the number of shares of Stock reserved for issuance under the Plan will be equal to the sum of (i) 2,000,000 shares of Stock, plus (ii) the number of shares of Stock available for future Awards under the Prior Plan as of the date this Plan, as amended and restated, is approved by the Company's stockholders, plus (iii) the number of shares of Stock related to Awards outstanding under the Prior Plan as of the date this Plan, as amended and restated, is approved by the Company's stockholders, that thereafter terminate by expiration or forfeiture, cancellation, or otherwise without the issuance of such shares of Stock (the "Share Limit"). Any of the shares of Stock reserved and available for issuance under the Plan may be used for any type of Award under the Plan, and any or all of the shares of Stock reserved for issuance under the Plan shall be available for issuance pursuant to Incentive Stock Options. Shares of Stock to be issued under the Plan shall be authorized but unissued shares or, to the extent permitted by Applicable Laws, issued shares that have been reacquired by the Company.

 

4.2    Adjustments in Authorized Shares of Stock.

 

In connection with mergers, reorganizations, separations, or other transactions to which Code Section 424(a) applies, the Committee shall have the right to cause the Company to assume awards previously granted under a compensatory plan of another business entity that is a party to such transaction and/or to grant Substitute Awards under the Plan for such awards. The Share Limit pursuant to Section 4.1 shall be increased by the number of shares of Stock subject to any such assumed awards and Substitute Awards. Shares available for issuance under a stockholder-approved plan of a business entity that is a party to such transaction (as appropriately adjusted, if necessary, to reflect the transaction) may be used for Awards under the Plan and shall not reduce the number of shares of Stock available for issuance under the Plan, subject to applicable requirements of any Stock Exchange or Securities Market on which the Stock is listed or publicly traded.

 

4.3    Share Usage.

 

Shares of Stock covered by an Award shall be counted as used as of the Grant Date for purposes of calculating the number of shares of Stock available for issuance under Section 4.1. Any shares of Stock that are subject to Awards shall be counted against the Share Limit set forth in Section 4.1 as one (1) share of Stock for every one (1) share of Stock subject to an Award. With respect to SARs, the number of shares of Stock subject to an award of SARs will be counted against the Share Limit set forth in Section 4.1 as one (1) share of Stock for every one (1) share of Stock subject to such Award regardless of the number of shares of Stock actually issued to settle the SAR upon exercise. The target number of shares issuable under a Performance Award shall be counted against the Share Limit set forth in Section 4.1 as of the Grant Date, but such number shall be adjusted to equal the actual number of shares issued upon settlement of the Performance Award to the extent different from such target number of shares.

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If any shares of Stock covered by an Award granted under the Plan are not purchased or are forfeited or expire, or if an Award otherwise terminates without delivery of any shares of Stock subject thereto or is settled in cash in lieu of shares of Stock, then the number of shares of Stock counted against the Share Limit with respect to such Award shall, to the extent of any such forfeiture, termination, expiration, or settlement, again be available for making Awards under the Plan in the same amount as such shares of Stock were counted against the Share Limit set forth in Section 4.1. The number of shares of Stock available for issuance under the Plan shall not be increased by the number of shares of Stock (i) tendered, withheld, or subject to an Award surrendered in connection with the purchase of shares of Stock upon exercise of an Option, (ii) deducted or delivered from payment of an Award payment in connection with the Company's tax withholding obligations as described in Section 18.3, (iii) purchased by the Company with proceeds from Option exercises, or (iv) not issued upon the net settlement or net exercise of a Stock-settled SAR.

 

5.     TERM; AMENDMENT, SUSPENSION, AND TERMINATION

 

5.1    Term.

 

The Plan, as amended and restated, shall become effective as of the date on which it is approved by the Company's stockholders. In the event that the Company's stockholders do not approve this Plan, the Prior Plan will continue in full force and effect on its terms and conditions as in effect immediately prior to the date this Plan is approved by the Board. The Plan shall terminate on the first to occur of (i) the tenth (10th) anniversary of the date this Plan, as amended and restated, is approved by the Board, (ii) the date determined in accordance with Section 5.2, and (iii) the date determined in accordance with Section 17.3providedhowever, that Incentive Stock Options may not be granted under the Plan after the tenth (10th) anniversary of the date of the Board's adoption of this Plan, as amended and restated. Upon such termination of the Plan, all outstanding Awards shall continue to have full force and effect in accordance with the provisions of the terminated Plan and the applicable Award Agreement (or other documents evidencing such Awards).

 

5.2    Amendment, Suspension, and Termination of the Plan.

 

The Board may, at any time and from time to time, amend, suspend, or terminate the Plan; provided that, with respect to Awards theretofore granted under the Plan, no amendment, suspension, or termination of the Plan shall, without the consent of the Grantee, impair the rights or obligations under any such Award. An amendment shall be contingent on approval of the Company's stockholders to the extent stated by the Board or required by Applicable Laws (including applicable Stock Exchange listing requirements); provided that no amendment will be made to the no-repricing provisions of Section 3.5, the Option Price provisions of Section 8.1, and the SAR Exercise Price provisions of Section 9.1 without the approval of the Company's stockholders.

 

6.     AWARD ELIGIBILITY AND LIMITATIONS

 

6.1    Service Providers and Other Persons.

 

Subject to this Section 6, Awards may be made under the Plan to: (i) any Service Provider, as the Committee shall determine and designate from time to time, and (ii) any other individual whose participation in the Plan is determined to be in the best interests of the Company by the Committee.

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6.2    Limitation on Shares of Stock Subject to Awards and Cash Awards.

 

Subject to adjustment as provided in Section 17:

 

(i)  the maximum number of shares of Stock that may be granted under the Plan, pursuant to Options or SARs, in a calendar year to any Person eligible for an Award under Section 6 is six hundred thousand (600,000) shares;

 

(ii)  the maximum number of shares of Stock that may be granted under the Plan, other than pursuant to Options or SARs, in a calendar year to any Person eligible for an Award under Section 6 is six hundred thousand (600,000) shares; and

 

(iii)  the maximum amount that may be paid as an Annual Incentive Award (whether or not cash-settled) in a calendar year to any Person eligible for an Award under Section 6 shall be seven million five hundred thousand dollars ($7,500,000), and the maximum amount that may be paid as a cash-denominated Performance Award (whether or not cash-settled) in respect of a Performance Period in excess of twelve (12) months by any Person eligible for an Award under Section 6 shall be ten million dollars ($10,000,000).

 

6.3    Director Compensation.

 

Notwithstanding any provision to the contrary in the Plan, the Committee may establish compensation for non-employee directors from time to time, subject to the limitations in the Plan. The Committee will from time to time determine the terms, conditions and amounts of all such non-employee director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee director as compensation for services as a non-employee director during any fiscal year of the Company may not exceed $750,000. The Committee may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the Committee may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee directors.

 

6.4    Stand-Alone, Additional, Tandem and Substitute Awards.

 

Subject to Section 3.4, Awards granted under the Plan may, in the sole discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, (i) any other Award, (ii) any award granted under another plan of the Company, any Affiliate, or any business entity that has been a party to a transaction with the Company or an Affiliate, or (iii) any other right of a Grantee to receive payment from the Company or any Affiliate. Such additional, tandem, exchange, or Substitute Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or for an award granted under another plan of the Company, an Affiliate, or any business entity that has been a party to a transaction with the Company or an Affiliate, the Committee shall require the surrender of such other Award or award under such other plan in consideration for the grant of such exchange or Substitute Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Affiliate. Notwithstanding Section 8.1 and Section 9.1 but subject to Section 3.5, the Option Price of an Option or the SAR Exercise Price of an SAR that is a Substitute Award may be less than one hundred percent (100%) of the Fair Market Value of a share of Stock on the original Grant Date; provided, that the Option Price or SAR Exercise Price is determined in accordance with the principles of Code Section 424 and the regulations thereunder for any Incentive Stock Option and consistent with Code Section 409A for any other Option or SAR.

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7.     AWARD AGREEMENT

 

Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in such form or forms as the Committee shall from time to time determine. Award Agreements utilized from time to time or at the same time need not contain similar provisions but shall be consistent with the terms of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such Options are intended to be Non-qualified Stock Options or Incentive Stock Options, and in the absence of such specification such options shall be deemed Non-qualified Stock Options. In the event of any inconsistency between the Plan and an Award Agreement, the provisions of the Plan shall control.

 

8.     TERMS AND CONDITIONS OF OPTIONS

 

8.1    Option Price.

 

The Option Price of each Option shall be fixed by the Committee and stated in the Award Agreement evidencing such Option. Except in the case of Substitute Awards, the Option Price of each Option shall be at least the Fair Market Value of one (1) share of Stock on the Grant Date; providedhowever, that in the event that a Grantee is a Ten Percent Stockholder, the Option Price of an Option granted to such Grantee that is intended to be an Incentive Stock Option shall be not less than one hundred ten percent (110%) of the Fair Market Value of one (1) share of Stock on the Grant Date. In no case shall the Option Price of any Option be less than the par value of a share of Stock.

 

8.2    Vesting and Exercisability.

 

Subject to Sections 8.3 and 17.3, each Option granted under the Plan shall become vested and/or exercisable at such times and under such conditions as shall be determined by the Committee and stated in the Award Agreement, in another agreement with the Grantee, or otherwise in writing; provided that no Option shall be granted to Grantees who are entitled to overtime under Applicable Laws that will vest or be exercisable within a six (6)-month period starting on the Grant Date. For purposes of this Section 8.2, fractional numbers of shares of Stock subject to an Option shall be rounded down to the next nearest whole number.

 

8.3    Term.

 

Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock thereunder shall cease, on the tenth (10th) anniversary of the Grant Date, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award Agreement relating to such Option; providedhowever, that in the event that the Grantee is a Ten Percent Stockholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option shall not be exercisable after the fifth (5th) anniversary of the Grant Date of such Incentive Stock Option.

 

8.4    Termination of Service.

 

Each Award Agreement with respect to the grant of an Option shall set forth the extent to which the Grantee thereof, if at all, shall have the right to exercise the Option following termination of the Grantee's Service. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

 

8.5    Limitations on Exercise of Option.

 

Notwithstanding any provision of the Plan to the contrary, in no event may any Option be exercised, in whole or in part, after the occurrence of an event which results in termination of the Option in accordance with Section 17.

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8.6    Method of Exercise.

 

Subject to the terms of Section 12 and Section 18.3, an Option that is exercisable may be exercised by the Grantee's delivery to the Company or its designee or agent of notice of exercise on any business day, at the Company's principal office or the office of such designee or agent, on the form specified by the Company and in accordance with any additional procedures specified by the Committee. Such notice shall specify the number of shares of Stock with respect to which the Option is being exercised and shall be accompanied by payment in full of the Option Price of the shares of Stock for which the Option is being exercised, plus the amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with respect to the exercise of such Option.

 

8.7    Rights of Holders of Options.

 

Unless otherwise stated in the applicable Award Agreement, a Grantee or other Person holding or exercising an Option shall have none of the rights of a stockholder (for example, the right to receive cash or dividend payments or distributions attributable to the shares of Stock subject to such Option or to direct the voting of the shares of Stock subject to such Option) until the shares of Stock subject thereby are fully paid and issued to such Grantee or other Person. Except as provided in Section 17, no adjustment shall be made for dividends, distributions, or other rights for which the record date is prior to the date of issuance of such shares of Stock.

 

8.8    Delivery of Stock.

 

Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price with respect thereto, such Grantee shall be entitled to receive evidence of such Grantee's ownership of the shares of Stock subject to the Option as shall be consistent with Section 3.8.

 

8.9    Transferability of Options.

 

Except as provided in Section 8.10, during the lifetime of a Grantee of an Option, only the Grantee (or, in the event of such Grantee's legal incapacity or incompetency, the Grantee's guardian or legal representative) may exercise such Option. Except as provided in Section 8.10, no Option shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

 

8.10    Family Transfers.

 

If authorized in the applicable Award Agreement and by the Committee, in its sole discretion, a Grantee may transfer, not for value, all or part of an Option which is not an Incentive Stock Option to any Family Member. For the purpose of this Section 8.10, a "not for value" transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights; or (iii) unless Applicable Law does not permit such transfers, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (and/or the Grantee) in exchange for an interest in that entity. Following a transfer under this Section 8.10, any such Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, and shares of Stock acquired pursuant to the Option shall be subject to the same restrictions on transfer of shares as would have applied to the Grantee. Subsequent transfers of transferred Options shall be prohibited except to Family Members of the original Grantee in accordance with this Section 8.10 or by will or the laws of descent and distribution. The provisions of Section 8.4 relating to termination of Service shall continue to be applied with respect to the original Grantee, following which the Option shall be exercisable by the transferee only to the extent, and for the periods specified, in Section 8.4.

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8.11    Limitations on Incentive Stock Options.

 

An Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is an employee of the Company or any corporate Subsidiary; (ii) to the extent specifically provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the shares of Stock with respect to which all Incentive Stock Options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Company and its Affiliates) does not exceed one hundred thousand dollars ($100,000). Except to the extent provided in the regulations under Code Section 422, this limitation shall be applied by taking Options into account in the order in which they were granted.

 

8.12    Notice of Disqualifying Disposition.

 

If any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition immediately but in no event later than ten (10) days thereafter.

 

9.     TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

 

9.1    Right to Payment and SAR Exercise Price.

 

A SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one (1) share of Stock on the date of exercise over (ii) the SAR Exercise Price as determined by the Committee. The Award Agreement for a SAR shall specify the SAR Exercise Price, which shall be no less than the Fair Market Value of one (1) share of Stock on the Grant Date of such SAR. SARs may be granted in tandem with all or part of an Option granted under the Plan or at any subsequent time during the term of such Option, in combination with all or part of any other Award, or without regard to any Option or other Award; provided, that a SAR that is granted in tandem with all or part of an Option will have the same term, and expire at the same time, as the related Option; providedfurther, that a SAR that is granted subsequent to the Grant Date of a related Option must have a SAR Exercise Price that is no less than the Fair Market Value of one (1) share of Stock on the Grant Date of such SAR.

 

9.2    Other Terms.

 

The Committee shall determine, on the Grant Date or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future Service requirements); the time or times at which SARs shall cease to be or become exercisable following termination of Service or upon other conditions; the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which shares of Stock shall be delivered or deemed to be delivered to Grantees, whether or not a SAR shall be in tandem or in combination with any other Award; and any other terms and conditions of any SAR; provided, that no SARs shall be granted to Grantees who are entitled to overtime under Applicable Laws that will vest or be exercisable within a six (6)-month period starting on the Grant Date.

 

9.3    Term.

 

Each SAR granted under the Plan shall terminate, and all rights thereunder shall cease, on the tenth (10th) anniversary of the Grant Date of such SAR, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award Agreement relating to such SAR.

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9.4    Rights of Holders of SARs.

 

Unless otherwise stated in the applicable Award Agreement, a Grantee or other Person holding or exercising a SAR shall have none of the rights of a stockholder of the Company (for example, the right to receive cash or dividend payments or distributions attributable to the shares of Stock subject to such SAR or to direct the voting of the shares of Stock subject to such SAR) until, if applicable, the shares of Stock subject thereby are fully paid and issued to such Grantee or other Person. Except as provided in Section 17, no adjustment shall be made for dividends, distributions, or other rights for which the record date is prior to the date of issuance of such shares of Stock, if applicable.

 

9.5    Transferability of SARs.

 

Except as provided in Section 9.6, during the lifetime of a Grantee of a SAR, only the Grantee (or, in the event of such Grantee's legal incapacity or incompetency, the Grantee's guardian or legal representative) may exercise such SAR. Except as provided in Section 9.6, no SAR shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

 

9.6    Family Transfers.

 

If authorized in the applicable Award Agreement and by the Committee, in its sole discretion, a Grantee may transfer, not for value, all or part of a SAR to any Family Member. For the purpose of this Section 9.6, a "not for value" transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights; or (iii) unless Applicable Law does not permit such transfers, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (and/or the Grantee) in exchange for an interest in that entity. Following a transfer under this Section 9.6, any such SAR shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, and shares of Stock acquired pursuant to a SAR, if any, shall be subject to the same restrictions on transfer of shares as would have applied to the Grantee. Subsequent transfers of transferred SARs are prohibited except to Family Members of the original Grantee in accordance with this Section 9.6 or by will or the laws of descent and distribution.

 

10.   TERMS AND CONDITIONS OF RESTRICTED STOCK, RESTRICTED STOCK UNITS, AND DEFERRED STOCK UNITS

 

10.1    Grant of Restricted Stock, Restricted Stock Units, or Deferred Stock Units.

 

Awards of Restricted Stock, Restricted Stock Units, and Deferred Stock Units may be made for consideration, such as a Purchase Price, or no consideration, other than par value of the shares of Stock, which may be deemed paid by past or future Services to the Company or an Affiliate.

 

10.2    Restrictions.

 

At the time a grant of Restricted Stock, Restricted Stock Units, or Deferred Stock Units is made, the Committee may, in its sole discretion, (a) establish a Restricted Period applicable to such Restricted Stock, Restricted Stock Units, or Deferred Stock Units and (b) prescribe restrictions in addition to or other than the expiration of the Restricted Period, including the achievement of corporate or individual performance goals, which may be applicable to all or any portion of such Restricted Stock, Restricted Stock Units, or Deferred Stock Units as provided in Section 14. Awards of Restricted Stock, Restricted Stock Units, and Deferred Stock Units may not be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the Restricted Period or prior to the satisfaction of any other restrictions prescribed by the Committee with respect to such Awards.

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10.3    Registration; Restricted Stock Certificates.

 

Subject to Section 3.8 and the immediately following sentence, the Company may issue, in the name of each Grantee to whom Restricted Stock has been granted, certificates representing the total number of shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date of such Restricted Stock. The Committee may provide in an Award Agreement with respect to an Award of Restricted Stock that either (i) the Secretary of the Company shall hold such certificates for such Grantee's benefit until such time as such shares of Restricted Stock are forfeited to the Company or the restrictions applicable thereto lapse and such Grantee shall deliver a stock power to the Company with respect to each certificate, or (ii) such certificates shall be delivered to such Grantee, provided that such certificates shall bear legends that comply with Applicable Laws and make appropriate reference to the restrictions imposed on such Award of Restricted Stock under the Plan and such Award Agreement. Pursuant to Section 3.8, to the extent that ownership of Restricted Stock is evidenced by a book-entry registration or direct registration (including transaction advices), such registration will contain an appropriate legend or restriction similar to the foregoing to evidence the restrictions imposed on such Award of Restricted Stock under the Plan and the applicable Award Agreement.

 

10.4    Rights of Holders of Restricted Stock.

 

Unless the Committee provides otherwise in an Award Agreement and subject to the restrictions set forth in the Plan, any applicable Company program, and the applicable Award Agreement, holders of Restricted Stock shall have the right to vote such shares of Restricted Stock and the right to receive any dividend payments or distributions declared or paid with respect to such shares of Restricted Stock. The Committee may provide in an Award Agreement evidencing a grant of Restricted Stock that (i) any cash dividend payments or distributions paid on Restricted Stock either shall be reinvested in shares of Stock or shall be paid in cash at the same time paid to other stockholders of the Company as of the record date for such dividend, in each case which may or may not be subject to the same vesting conditions and restrictions as applicable to such underlying shares of Restricted Stock or (ii) any dividend payments or distributions declared or paid on shares of Restricted Stock shall only be made or paid upon satisfaction of the vesting conditions and restrictions applicable to such shares of Restricted Stock. Dividend payments or distributions declared or paid on shares of Restricted Stock which vest or are earned based upon the achievement of performance goals shall not vest or be paid unless such performance goals for such shares of Restricted Stock are achieved. All stock dividend payments or distributions, if any, received by a Grantee with respect to shares of Restricted Stock as a result of any stock split, stock dividend, combination of stock, or other similar transaction shall be subject to the same vesting conditions and restrictions as applicable to such underlying shares of Restricted Stock.

 

10.5    Rights of Holders of Restricted Stock Units and Deferred Stock Units.

 

10.5.1    Voting and Dividend Rights.

 

Unless otherwise stated in the applicable Award Agreement, a Grantee or other Person holding Restricted Stock Units or Deferred Stock Units shall have none of the rights of a stockholder of the Company (for example, the right to receive cash or dividend payments or distributions attributable to the shares of Stock subject to such Award or to direct the voting of the shares of Stock subject to such Award) until, if applicable, the shares of Stock subject thereby are fully paid and issued to such Grantee or other Person. The Committee may provide in an Award Agreement evidencing a grant of Restricted Stock Units or Deferred Stock Units that the holder of such Restricted Stock Units or Deferred Stock Units, as applicable, shall be entitled to receive Dividend Equivalent Rights, in accordance with Section 13.

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10.5.2    Creditor's Rights.

 

A holder of Restricted Stock Units or Deferred Stock Units shall have no rights other than those of a general, unsecured creditor of the Company. Restricted Stock Units and Deferred Stock Units represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the applicable Award Agreement.

 

10.6    Termination of Service.

 

Unless the Committee provides otherwise in an Award Agreement, in another agreement with the Grantee, or otherwise in writing after the Award Agreement is issued, but prior to termination of the Grantee's Service, upon the termination of a Grantee's Service, any Restricted Stock, Restricted Stock Units, or Deferred Stock Units held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of such Restricted Stock, Restricted Stock Units, or Deferred Stock Units, the Grantee shall have no further rights with respect to such Award, including, without limitation, any right to vote such Restricted Stock or any right to receive dividends or Dividend Equivalent Rights, as applicable, with respect to such Restricted Stock, Restricted Stock Units, or Deferred Stock Units.

 

10.7 Purchase of Restricted Stock and Shares of Stock Subject to Restricted Stock Units and Deferred Stock Units.

 

The Grantee of an Award of Restricted Stock, vested Restricted Stock Units, or vested Deferred Stock Units shall be required, to the extent required by Applicable Laws, to purchase such Restricted Stock or the shares of Stock subject to such vested Restricted Stock Units or Deferred Stock Units from the Company at a Purchase Price equal to the greater of (i) the aggregate par value of the shares of Stock represented by such Restricted Stock, vested Restricted Stock Units, or vested Deferred Stock Units, or (ii) the Purchase Price, if any, specified in the Award Agreement relating to such Restricted Stock, Restricted Stock Units, or Deferred Stock Units. The Purchase Price shall be payable in a form described in Section 12 or, in the discretion of the Committee, in consideration for past or future Services rendered or to be rendered to the Company or an Affiliate.

 

10.8    Delivery of Shares of Stock.

 

Upon the expiration or termination of any Restricted Period and the satisfaction of any other conditions prescribed by the Committee, including, without limitation, any performance goals or delayed delivery period, the restrictions applicable to Restricted Stock and to Restricted Stock Units or Deferred Stock Units settled in shares of Stock shall lapse, and, unless otherwise provided in the applicable Award Agreement, a book-entry or direct registration (including transaction advices) or a certificate evidencing ownership of such shares of Stock shall, consistent with Section 3.8, be issued, free of all such restrictions, to the Grantee thereof or such Grantee's beneficiary or estate, as the case may be. Neither the Grantee, nor the Grantee's beneficiary or estate, shall have any further rights with regard to a Restricted Stock Unit or Deferred Stock Unit once the shares of Stock represented by such Restricted Stock Unit or Deferred Stock Unit have been delivered in accordance with this Section 10.8.

 

11.   TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY-BASED AWARDS

 

11.1    Unrestricted Stock.

 

The Committee may, in its sole discretion, grant (or sell at the par value of a share of Stock or such other higher Purchase Price determined by the Committee) an Award to any Grantee pursuant to which such Grantee may receive shares of Unrestricted Stock under the Plan. Awards of Unrestricted Stock may be granted or sold as described in the preceding sentence in respect of past or future Services or other valid consideration, in lieu of or in addition to any cash compensation due to such Grantee.

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11.2    Other Equity-Based Awards.

 

The Committee may, in its sole discretion, grant Awards in the form of Other Equity-Based Awards, as deemed by the Committee to be consistent with the purposes of the Plan. Awards granted pursuant to this Section 11.2 may be granted with vesting, value, and/or payment contingent upon the achievement of one or more performance goals. The Committee shall determine the terms and conditions of Other Equity-Based Awards on the Grant Date or thereafter. Unless the Committee provides otherwise in an Award Agreement, in another agreement with the Grantee, or otherwise in writing after the Award Agreement is issued, but prior to termination of Grantee's Service, upon the termination of a Grantee's Service, any Other Equity-Based Awards held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of any Other Equity-Based Award, the Grantee shall have no further rights with respect to such Other Equity-Based Award.

 

12.   FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

 

12.1    General Rule.

 

Payment of the Option Price for the shares of Stock purchased pursuant to the exercise of an Option or the Purchase Price, if any, for Restricted Stock, vested Restricted Stock Units, or vested Deferred Stock Units shall be made in cash or in cash equivalents acceptable to the Company.

 

12.2    Surrender of Shares of Stock.

 

To the extent the applicable Award Agreement so provides, payment of the Option Price for shares of Stock purchased pursuant to the exercise of an Option or the Purchase Price, if any, for Restricted Stock, vested Restricted Stock Units, or vested Deferred Stock Units may be made all or in part through the tender or attestation to the Company of shares of Stock, which shall be valued, for purposes of determining the extent to which the Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of such tender or attestation.

 

12.3    Cashless Exercise.

 

To the extent permitted by Applicable Laws and to the extent the Award Agreement so provides, payment of the Option Price for shares of Stock purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a form acceptable to the Committee) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and/or any withholding taxes described in Section 18.3.

 

12.4    Other Forms of Payment.

 

To the extent the Award Agreement so provides and/or unless otherwise specified in an Award Agreement, payment of the Option Price for shares of Stock purchased pursuant to exercise of an Option or the Purchase Price, if any, for Restricted Stock, vested Restricted Stock Units, or vested Deferred Stock Units may be made in any other form that is consistent with Applicable Laws, including, without limitation, (i) with respect to Restricted Stock, vested Restricted Stock Units, and/or vested Deferred Stock Units only, Service rendered or to be rendered by the Grantee thereof to the Company or an Affiliate and (ii) with the consent of the Company, by withholding the number of shares of Stock that would otherwise vest or be issuable in an amount equal in value to the Option Price or Purchase Price, if any, and/or any withholding taxes described in Section 18.3.

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13.   TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

 

13.1    Dividend Equivalent Rights.

 

A Dividend Equivalent Right may be granted hereunder; provided that no Dividend Equivalent Right may be granted in connection with, or related to, an Award of Options or SARs. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Agreement therefor. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently (with or without being subject to forfeiture or a repayment obligation) or may be deemed to be reinvested in additional shares of Stock or Awards, which may thereafter accrue additional Dividend Equivalent Rights (with or without being subject to forfeiture or a repayment obligation). Any such reinvestment shall be at the Fair Market Value on the date of such reinvestment. Dividend Equivalent Rights may be settled in cash, shares of Stock, or a combination thereof, in a single installment or in multiple installments, all as determined in the sole discretion of the Committee. A Dividend Equivalent Right granted as a component of another Award may (i) provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other Award and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award or (ii) contain terms and conditions which are different from the terms and conditions of such other Award; providedhowever, that Dividend Equivalent rights credited pursuant to a Dividend Equivalent Right granted as a component of another Award which vests or is earned based upon the achievement of performance goals shall not vest or be paid unless the performance goals for such underlying Award are achieved.

 

13.2    Termination of Service.

 

Unless the Committee provides otherwise in an Award Agreement, in another agreement with the Grantee, or otherwise in writing after the Award Agreement is issued, a Grantee's rights in all Dividend Equivalent Rights shall automatically terminate upon the Grantee's termination of Service for any reason.

 

14.   TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

 

14.1    Grant of Performance Awards and Annual Incentive Awards.

 

Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Performance Awards and/or Annual Incentive Awards in such amounts and upon such terms as the Committee shall determine.

 

14.2    Value of Performance Awards and Annual Incentive Awards.

 

Each Performance Award and Annual Incentive Award shall have an initial cash value or an actual or target number of shares of Stock that is established by the Committee as of the Grant Date. The Committee shall set performance goals in its discretion which, depending on the extent to which they are achieved, shall determine the value and/or number of shares of Stock that will be paid out to the Grantee thereof.

 

14.3    Earning of Performance Awards and Annual Incentive Awards.

 

Subject to the terms of this Plan, after the applicable Performance Period has ended, the Grantee of Performance Awards or Annual Incentive Awards shall be entitled to receive a payout of the value earned under such Performance Awards or Annual Incentive Awards by such Grantee over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.

 

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14.4    Form and Timing of Payment of Performance Awards and Annual Incentive Awards.

 

Payment of the value earned under Performance Awards and Annual Incentive Awards shall be made, as determined by the Committee, in the form, at the time, and in the manner described in the applicable Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, (i) may pay the value earned under Performance Awards in the form of cash, shares of Stock, other Awards, or in a combination thereof, including shares of Stock and/or other Awards that are subject to any restrictions deemed appropriate by the Committee, and (ii) shall pay the value earned under Performance Awards and Annual Incentive Awards at the close of the applicable Performance Period, or as soon as reasonably practicable after the Committee has determined that the performance goal or goals relating thereto have been achieved; provided that, unless specifically provided in the Award Agreement, such payment shall occur no later than the fifteenth (15th) day of the third (3rd) month following the end of the calendar year in which the Performance Period ends.

 

14.5    Performance Conditions.

 

The right of a Grantee to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions.

 

14.5.1    Performance Goals Generally.

 

The performance goals for Performance Awards or Annual Incentive Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee. The Committee may determine that such Awards shall be granted, exercised, and/or settled upon achievement of any single performance goal or of two (2) or more performance goals. Performance goals may differ for Awards granted to any one Grantee or to different Grantees.

 

14.5.2    Settlement of Awards; Other Terms.

 

Settlement of such Awards shall be in cash, shares of Stock, other Awards, or a combination thereof, including shares of Stock and/or Awards that are subject to any restrictions deemed appropriate by the Committee, in each case as determined in the sole discretion of the Committee. The Committee may, in its sole discretion, reduce the amount of a settlement otherwise to be made in connection with such Awards. The Committee shall specify the circumstances in which such Performance Awards or Annual Incentive Awards shall be paid or forfeited in the event of termination of Service by the Grantee prior to the end of a Performance Period or settlement of such Awards. In the event payment of a Performance Award is made in the form of another Award subject to Service-based vesting, the Committee shall specify the circumstances in which the Award will be paid or forfeited in the event of a termination of Service.

 

14.5.3    Performance Measures.

 

The performance goals upon which the payment or vesting of a Performance Award or Annual Incentive Award may be conditioned may include, but shall not be limited to, the following Performance Measures, with or without adjustment (including pro forma adjustments):

 

(a) net earnings or net income;

 

(b) operating earnings;

 

(c) pretax earnings;

 

(d) earnings per share of Stock;

 

(e) Stock price, including growth measures and total stockholder return;

 

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(f) earnings before interest and taxes;

 

(g) earnings before interest, taxes, depreciation and/or amortization;

 

(h) earnings before interest, taxes, depreciation, and/or amortization as adjusted to exclude any one or more of the following:

 

• stock-based compensation expense;

 

• income from discontinued operations;

 

• gain on cancellation of debt;

 

• debt extinguishment and related costs;

 

• restructuring, separation, and/or integration charges and costs;

 

• reorganization and/or recapitalization charges and costs;

 

• impairment charges;

 

• merger-related events;

 

• gain or loss related to investments;

 

• sales and use tax settlements; and

 

• gain on non-monetary transactions;

 

(i) sales, originations or revenue growth or targets, whether in general or by type of product, service, or customer;

 

(j) diversification of sales or revenues, whether in general or by type of product, service, or customer;

 

(k) gross or operating margins;

 

(l) return measures, including return on assets, capital, investment, equity, sales, or revenue;

 

(m) cash flow, including:

 

• operating cash flow;

 

• free cash flow, defined as earnings before interest, taxes, depreciation, and/or amortization (as adjusted to exclude any one or more of the items that may be excluded pursuant to the Performance Measure specified in clause (h) above) less capital expenditures;

 

• levered free cash flow, defined as free cash flow less interest expense;

 

• cash flow return on equity; and

 

• cash flow return on investment;

 

(n) productivity ratios;

 

(o) costs, reductions in costs, and cost control measures;

 

(p) expense targets;

 

(q) underwriting cost per loan;

 

(r) credit losses;

 

(s) market or market segment share or penetration;

 

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(t) financial ratios as provided in credit agreements of the Company and its subsidiaries;

 

(u) working capital targets;

 

(v) completion of acquisitions of businesses or companies;

 

(w) development of new lines of business or substantially expanding existing lines of business;

 

(x) completion of divestitures and asset sales;

 

(y) revenues under management;

 

(z) funds from operations;

 

(aa) employee hiring, retention, growth in population, and diversity;

 

(bb) employee or customer satisfaction measurements;

 

(cc) opening new offices expanding geographic coverage,

 

(dd) execution of contractual arrangements or satisfaction of contractual requirements or milestones; and

 

(ee) any combination of any of the foregoing business criteria.

 

Performance under any of the foregoing Performance Measures (i) may be used to measure the performance of (x) the Company, its Subsidiaries, and other Affiliates as a whole, (y) the Company, any Subsidiary, any other Affiliate, or any combination thereof, or (z) any one or more business units or operating segments of the Company, any Subsidiary, and/or any other Affiliate, in each case as the Committee, in its sole discretion, deems appropriate and (ii) may be compared to the performance of one or more other companies or one or more published or special indices designated or approved by the Committee for such comparison, as the Committee, in its sole discretion, deems appropriate. In addition, the Committee, in its sole discretion, may select performance under the Performance Measure specified in clause (e) above for comparison to performance under one or more stock market indices designated or approved by the Committee. The Committee shall also have the authority to provide for accelerated vesting of any Performance Award or Annual Incentive Award based on the achievement of any Performance Measures.

 

14.5.4    Evaluation of Performance.

 

The Committee may provide in any Performance Award or Annual Incentive Award that any evaluation of performance may include or exclude the impact of certain events that occur during a Performance Period, including but not limited to: (i) asset write-downs; (ii) litigation or claims, judgments, or settlements; (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results; (iv) any reorganization, restructuring, or capital raising events or programs; (v) extraordinary, non-core, non-operating, or non-recurring items; (vi) acquisitions or divestitures; (vii) foreign exchange gains and losses; (viii) impact of shares of Stock purchased through share repurchase programs; (ix) tax valuation allowance reversals; (x) impairment expense; and (xi) environmental expense.

 

14.6    Provisions Applicable to Section 162(m) Awards.

 

Notwithstanding any other provision of the Plan or any Award, each Award made under the Plan prior to November 2, 2017 that is intended to qualify as "performance-based compensation" as described in Section 162(m)(4)(C) of the Code prior to its repeal or is otherwise not subject to the deduction limitation of Section 162(m) of the Code because it was granted to an individual who was not considered a "covered employee" under Section 162(m) of the Code (each such Award, a "Section 162(m) Award") shall be subject to any additional limitations as the Committee determines necessary for such Section 162(m) Award to qualify as "performance-based compensation" as described in Section 162(m)(4)(C) of the Code prior to its repeal or to otherwise be exempt from Section 162(m) of the Code pursuant to the transition relief rules in the Tax Cuts and Jobs Act of 2017, and to the extent any of the provisions of the Plan or any Award would cause any Section 162(m) Award to fail to so qualify or to otherwise be so exempt, any such provisions shall not apply to such Award to the extent necessary to ensure the continued qualification or exemption of such Award. To the extent permitted by applicable law, the Plan and any such Award shall be deemed amended to the extent necessary to conform to such requirements. To the extent necessary with respect to Section 162(m) Awards, the Committee shall be comprised solely of two or more directors intended to qualify as "outside directors" for purposes of Section 162(m) of the Code.

 

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15.   PARACHUTE LIMITATIONS

 

If the Grantee is a Disqualified Individual, then, notwithstanding any other provision of this Plan or of any Other Agreement, and notwithstanding any Benefit Arrangement, any right to exercise, vesting, payment or benefit to the Grantee under this Plan shall be reduced or eliminated:

 

(i)  to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any exercise, vesting, payment or benefit to the Grantee under this Plan to be considered a Parachute Payment; and

 

(ii)  if, as a result of receiving such Parachute Payment, the aggregate after-tax amounts received by the Grantee from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Grantee without causing any such payment or benefit to be considered a Parachute Payment.

 

Except as required by Code Section 409A or to the extent that Code Section 409A permits discretion, the Committee shall have the right, in the Committee's sole discretion, to designate those rights, payments, or benefits under the Plan, all Other Agreements, and all Benefit Arrangements that should be reduced or eliminated so as to avoid having such rights, payments, or benefits be considered a Parachute Payment; provided, however, to the extent any payment or benefit constitutes deferred compensation under Code Section 409A, in order to comply with Code Section 409A, the Company shall instead accomplish such reduction by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of Performance Awards, then by reducing or eliminating any accelerated vesting of Options or SARs, then by reducing or eliminating any accelerated vesting of Restricted Stock, Restricted Stock Units, or Deferred Stock Units, then by reducing or eliminating any other remaining Parachute Payments.

 

16.   REQUIREMENTS OF LAW

 

16.1    General.

 

The Company shall not be required to offer, sell, or issue any shares of Stock under any Award, whether pursuant to the exercise of an Option, a SAR, or otherwise, if the offer, sale, or issuance of such shares of Stock would constitute a violation by the Grantee, the Company, an Affiliate, or any other Person of any provision of the Company's certificate of incorporation or bylaws or of Applicable Laws, including any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration, or qualification of any shares of Stock subject to an Award upon any Stock Exchange or Securities Market or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the offering, sale, issuance, or purchase of shares of Stock in connection with any Award, no shares of Stock may be offered, sold, or issued to the Grantee or any other Person under such Award, whether pursuant to the exercise of an Option, a SAR, or otherwise, unless such listing, registration, or qualification shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of such Award. Without limiting the generality of the foregoing, upon the exercise of any Option or any SAR that may be settled in shares of Stock or the delivery of any shares of Stock underlying an Award, unless a registration statement under the Securities Act is in effect with respect to the shares of Stock subject to such Award, the Company shall not be required to offer, sell, or issue such shares of Stock unless the Committee shall have received evidence satisfactory to it that the Grantee or any other Person exercising such Option or SAR or accepting delivery of such shares may acquire such shares of Stock pursuant to an exemption from registration under the Securities Act. Any determination by the Committee in connection with the foregoing shall be final, binding, and conclusive. The Company may register, but shall in no event be obligated to register, any shares of Stock or other securities issuable pursuant to the Plan pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option or a SAR or the issuance of shares of Stock or other securities issuable pursuant to the Plan or any Award to comply with any Applicable Laws. As to any jurisdiction that expressly imposes the requirement that an Option or SAR that may be settled in shares of Stock shall not be exercisable until the shares of Stock subject to such Option or SAR are registered under the securities laws thereof or are exempt from such registration, the exercise of such Option or SAR under circumstances in which the laws of such jurisdiction apply shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.

 

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16.2    Rule 16b-3.

 

During any time when the Company has any class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise of Options and SARs granted hereunder that would otherwise be subject to Section 16(b) of the Exchange Act shall qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Board or the Committee does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative with respect to such Awards to the extent permitted by law and deemed advisable by the Board or Committee, and shall not affect the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Committee may exercise its discretion to modify this Plan in any respect necessary or advisable in its judgment to satisfy the requirements of, or to permit the Company to avail itself of the benefits of, the revised exemption or its replacement.

 

17.   EFFECT OF CHANGES IN CAPITALIZATION

 

17.1    Changes in Stock.

 

If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number of share or kind of Capital Stock or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse stock split, spin-off, combination of stock, exchange of stock, stock dividend or other distribution payable in Capital Stock, or other increase or decrease in such Stock effected without receipt of consideration by the Company, the number and kinds of shares of Capital Stock for which grants of Options and other Awards may be made under the Plan, including, without limitation, the Share Limit set forth in Section 4.1 and the individual limits set forth in Section 6.2, shall be adjusted proportionately and accordingly by the Committee. In addition, the number and kind of shares of Capital Stock for which Awards are outstanding shall be adjusted proportionately and accordingly by the Committee so that the proportionate interest of the Grantee immediately following such event shall, to the extent practicable, be the same as immediately before such event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option Price or SAR Exercise Price payable with respect to shares that are subject to the unexercised portion of an outstanding Option or SAR, as applicable, but shall include a corresponding proportionate adjustment in the per share Option Price or SAR Exercise Price, as applicable. The conversion of any convertible securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution to the Company's stockholders of securities of any other entity or other assets (including an extraordinary dividend, but excluding a non-extraordinary dividend, declared and paid by the Company) without receipt of consideration by the Company, the Board or the Committee shall, in such manner as the Board or the Committee deems appropriate, adjust (i) the number and kind of shares of Capital Stock subject to outstanding Awards and/or (ii) the aggregate and per share Option Price of outstanding Options and the aggregate and per share SAR Exercise Price of outstanding Stock Appreciation Rights, as applicable, to reflect such distribution.

 

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17.2    Reorganization in Which the Company Is the Surviving Entity Which Does not Constitute a Change in Control.

 

Subject to Section 17.3, if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities which does not constitute a Change in Control, any Award theretofore granted pursuant to the Plan shall pertain to and apply to the Capital Stock to which a holder of the number of shares of Stock subject to such Award would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the per share Option Price and SAR Exercise Price so that the aggregate Option Price or SAR Exercise Price thereafter shall be the same as the aggregate Option Price or SAR Exercise Price of the shares of Stock remaining subject to the Option or SAR immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Award Agreement, in another agreement with the Grantee, or as otherwise set forth in writing, any restrictions applicable to such Award shall apply as well to any replacement shares of Capital Stock subject to such Award or received by the Grantee as a result of the reorganization, merger, or consolidation. In the event of a transaction described in this Section 17.2, Performance Awards shall be adjusted (including any adjustment to the Performance Measures applicable to such Awards deemed appropriate by the Committee) so as to apply to the Capital Stock that a holder of the number of shares of Stock subject to the Performance Awards would have been entitled to receive immediately following such reorganization, merger, or consolidation.

 

17.3    Change in Control in which Awards are not Assumed.

 

Except as otherwise provided in the applicable Award Agreement, in another agreement with the Grantee, or as otherwise set forth in writing, upon the occurrence of a Change in Control in which outstanding Awards are not being assumed or continued, the following provisions shall apply to such Award, to the extent not assumed or continued:

 

(i)  Subject to clause (ii)(b) below, immediately prior to the occurrence of such Change in Control, in each case with the exception of any Performance Award, all outstanding shares of Restricted Stock and all Restricted Stock Units, Deferred Stock Units, and Dividend Equivalent Rights shall be deemed to have vested, and all shares of Stock and/or cash subject to such Awards shall be delivered; and

 

(ii)  Either or both of the following two (2) actions shall be taken:

 

(a)At least fifteen (15) days prior to the scheduled consummation of such Change in Control, all Options and SARs outstanding hereunder shall become immediately exercisable and shall remain exercisable for a period of fifteen (15) days. Any exercise of an Option or SAR during this fifteen (15)-day period shall be conditioned upon the consummation of the Change in Control and shall be effective only immediately before the consummation thereof, and upon consummation of such Change in Control, the Plan and all outstanding but unexercised Options and SARs shall terminate, with or without consideration (including, without limitation, consideration in accordance with clause (b) below) as determined by the Committee in its sole discretion. The Committee shall send notice of an event that shall result in such a termination to all Persons who hold Options and SARs not later than the time at which the Company gives notice thereof to its stockholders.

 

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or

 

(b)The Committee may elect, in its sole discretion, to cancel any outstanding Awards of Options, SARs, Restricted Stock, Restricted Stock Units, Deferred Stock Units, and/or Dividend Equivalent Rights and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or Capital Stock having a value (as determined by the Committee acting in good faith), in the case of Restricted Stock, Restricted Stock Units, Deferred Stock Units, and Dividend Equivalent Rights (for shares of Stock subject thereto), equal to the formula or fixed price per share paid to holders of shares of Stock pursuant to such Change in Control and, in the case of Options or SARs, equal to the product of the number of shares of Stock subject to the Option or SAR, multiplied by the amount, if any, by which (I) the formula or fixed price per share paid to holders of shares of Stock pursuant to such Change in Control exceeds (II) the Option Price or SAR Exercise Price applicable to such Options or SARs.

 

(iii)  Performance Awards shall be deemed to have vested as to the greater of (a) vesting as though target performance has been achieved or (b) vesting based on pro rata actual performance as of a date reasonably proximal to the date of consummation of the Change in Control, as determined by the Committee in its sole discretion, where that level of performance thus determined shall be treated as achieved immediately prior to the consummation of the Change in Control. For purposes of the preceding sentence, if, based on the discretion of the Committee, actual performance is not determinable, the Performance Awards shall be treated as though target performance has been achieved. After application of this Section 17.3(iii), if any Awards arise from application of this Section 17, such Awards shall be settled under the applicable provision of Section 17.3(i) and (ii).

 

(iv)  Other Equity-Based Awards shall be governed by the terms of the applicable Award Agreement.

 

17.4    Change in Control in which Awards are Assumed.

 

Except as otherwise provided in the applicable Award Agreement, in another agreement with the Grantee, or as otherwise set forth in writing, upon the occurrence of a Change in Control in which outstanding Awards are being assumed or continued, the following provisions shall apply to such Award, to the extent assumed or continued:

 

The Plan, Options, SARs, Restricted Stock, Restricted Stock Units, Deferred Stock Units, Dividend Equivalent Rights, and Other Equity-Based Awards theretofore granted under the Plan shall continue in the manner and under the terms so provided in the event of any Change in Control to the extent that provision is made in writing in connection with such Change in Control for the assumption or continuation of such Awards theretofore granted, or for the substitution for such Awards for new stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, dividend equivalent rights, and other equity-based awards relating to the Capital Stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any consideration that is not common stock) and exercise prices of options and stock appreciation rights.

 

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17.5    Adjustments.

 

Adjustments under this Section 17 related to shares of Stock or other Capital Stock of the Company shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share. The Committee may provide in the Award Agreement as of the Grant Date, in another agreement with the Grantee, or otherwise in writing at any time thereafter with the consent of the Grantee, for different provisions to apply to an Award in place of those described in Sections 17.1, 17.2, 17.3 and 17.4. This Section 17 shall not limit the Committee's ability to provide for alternative treatment of Awards outstanding under the Plan in the event of change in control events involving the Company that are not a Change in Control hereunder.

 

17.6    No Limitations on Company.

 

The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets (including all or any part of the business or assets of any Subsidiary or other Affiliate) or to engage in any other transaction or activity.

 

18.   GENERAL PROVISIONS

 

18.1    Disclaimer of Rights.

 

No provision in the Plan, any Award, or any Award Agreement shall be construed (i) to confer upon any Person the right to remain in the Service of the Company or an Affiliate, (ii) to interfere in any way with any contractual or other right or authority of the Company or an Affiliate either to increase or decrease the compensation or other payments to any Person at any time, or (iii) to terminate any Service or other relationship between any Person and the Company or an Affiliate. In addition, notwithstanding any provision of the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, in another agreement with the Grantee, or otherwise in writing, no Award granted under the Plan shall be affected by any change of duties or position of the Grantee, so long as such Grantee continues to provide Service. The obligation of the Company to pay any benefits pursuant to this Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan and Awards shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan.

 

18.2    Nonexclusivity of the Plan.

 

Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations upon the right and authority of the Board or the Committee to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals) as the Board or the Committee in their discretion determines desirable.

 

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18.3    Withholding Taxes.

 

The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by Applicable Law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award or the issuance of any shares of Stock or cash upon the exercise of, settlement of, or otherwise with respect to, an Award. At the time of such vesting, lapse, exercise, settlement, or other payment, the Grantee shall pay in cash to the Company or such Affiliate, as the case may be, any amount that the Company or such Affiliate may reasonably determine to be necessary to satisfy such withholding obligation; providedhowever, that if there is a same day sale of shares of Stock subject to an Award, the Grantee shall pay such withholding obligation on the day that the same day sale is completed. Subject to the prior approval of the Company or an Affiliate, which may be withheld by the Company or such Affiliate, as the case may be, in its sole discretion, the Grantee may elect to satisfy such withholding obligations, in whole or in part, (i) by causing the Company or an Affiliate to withhold shares of Stock otherwise issuable to the Grantee or (ii) by delivering to the Company or an Affiliate shares of Stock already owned by the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to satisfy such withholding obligations shall be determined by the Company or an Affiliate as of the date on which the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to this Section 18.3 may satisfy his or her withholding obligations only with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The maximum number of shares of Stock that may be withheld from any Award to satisfy any federal, state, or local tax withholding requirements upon the exercise, vesting, lapse of restrictions applicable to such Award, or payment of shares of Stock pursuant to such Award, as applicable, cannot exceed such number of shares of Stock having a Fair Market Value equal to the maximum statutory tax rates applicable in the Grantee's jurisdiction; provided, that, such shares shall be rounded up to the nearest whole share of Stock to the extent rounding up to the nearest whole share does not result in the liability classification of the applicable Award under generally accepted accounting principles in the United States of America.

 

18.4    Captions.

 

The use of captions in this Plan or any Award Agreement is for convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award Agreement.

 

18.5    Other Provisions.

 

Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.

 

18.6    Number and Gender.

 

With respect to words used in this Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as the context requires.

 

18.7    Severability.

 

If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

 

18.8    Governing Law.

 

The validity and construction of this Plan and the instruments evidencing the Awards hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan and the instruments evidencing the Awards granted hereunder to the substantive laws of any other jurisdiction.

 

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18.9    Section 409A of the Code.

 

The Plan is intended to comply with Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan will be interpreted and administered to be in compliance with Code Section 409A. Any payments described in the Plan that are due within the Short-Term Deferral Period will not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding any provision of the Plan to the contrary, to the extent required to avoid accelerated taxation and tax penalties under Code Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6)-month period immediately following the Grantee's Separation from Service will instead be paid on the first payroll date after the six (6)-month anniversary of the Grantee's Separation from Service (or the Grantee's death, if earlier).

 

Furthermore, notwithstanding anything in the Plan to the contrary, in the case of an Award that is characterized as deferred compensation under Code Section 409A, and pursuant to which settlement and delivery of the cash or shares of Stock subject to the Award is triggered based on a Change in Control, in no event will a Change in Control be deemed to have occurred for purposes of such settlement and delivery of cash or shares of Stock if the transaction is not also a "change in the ownership or effective control of" the Company or "a change in the ownership of a substantial portion of the assets of" the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). If an Award characterized as deferred compensation under Code Section 409A is not settled and delivered on account of the provision of the preceding sentence, the settlement and delivery shall occur on the next succeeding settlement and delivery triggering event that is a permissible triggering event under Code Section 409A. No provision of this paragraph shall in any way affect the determination of a Change in Control for purposes of vesting in an Award that is characterized as deferred compensation under Code Section 409A.

 

Notwithstanding the foregoing, neither the Company nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Grantee under Code Section 409A, and neither the Company or an Affiliate nor the Board or the Committee will have any liability to any Grantee for such tax or penalty.

 

*    *    *

 

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EXHIBIT B

 

WALKER & DUNLOP, INC.

2020 EQUITY INCENTIVE PLAN

 

NON-QUALIFIED STOCK OPTION AGREEMENT

COVER SHEET

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants an option (the “Option”) to purchase shares of the Company’s common stock, par value $0.01 per share (the “Stock”), to the Grantee named below, subject to the vesting conditions set forth below. Additional terms and conditions of the Option are set forth on this cover sheet and in the attached Non-Qualified Stock Option Agreement (collectively, the “Agreement”), in the Company’s 2020 Equity Incentive Plan (as amended from time to time, the “Plan”), and in any written employment or other written compensatory arrangement between you and the Company or any Affiliate (if any, the “Employment Agreement”).

 

 

Grant Date:

   

 

Name of Grantee:

   

 

Grantee’s Social Security Number:

   

 

Number of Shares of Stock Covered by the Option:

   

 

Option Price per Share:

   

Vesting Schedule:

 

 

 

 

 

 

 

 

If you continue in Service on each applicable vesting date, the Option shall vest in equal installments on each vesting date set forth below; provided, however, that any fractional shares shall be rounded up to the nearest whole share on the first and, if applicable, the last vesting date: 

 

You agree to all of the terms and conditions described in this Agreement, in the Plan (a copy of which is also posted), and in the Employment Agreement unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

 

Attachment

This is not a stock certificate or a negotiable instrument.

 

 

 

WALKER & DUNLOP, INC.

2020 EQUITY INCENTIVE PLAN

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

Non-qualified Option  

This Agreement evidences an award of an Option exercisable for that number of shares of Stock set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement, in the Plan, and on the cover sheet. This Option is not intended to be an incentive stock option under Section 422 of the Code and will be interpreted accordingly.

 

Transfer of Option  

Except as provided in the following paragraph, during your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the Option. Other than by will or the laws of descent and distribution, the Option may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the Option be made subject to execution, attachment, or similar process. If you attempt to do any of these things, you will immediately and automatically forfeit your Option.

 

Notwithstanding these restrictions on transfer but subject to such limitations as the Chief Executive Officer of the Company or the General Counsel of the Company may impose, you may transfer all or part of the vested portion of the Option to a Family Member, subject to the terms and conditions set forth in the Plan and a Non-Qualified Stock Option Transfer Agreement in the form approved by the Committee, to be entered into between you, the Company and such trust.

 

Vesting  

Your Option shall vest in accordance with the vesting schedule set forth on the cover sheet of this Agreement, so long as you continue in Service on each applicable vesting date set forth on the cover sheet, and is exercisable only as to its vested portion.

 

No additional portion of your Option shall vest after your Service has terminated for any reason.

 

 

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Change in Control  

Notwithstanding the vesting schedule set forth above, upon the consummation of a Change in Control, this Option will become 100% vested (i) if it is not assumed, or equivalent options are not substituted for the options, by the Company or its successor, or (ii) if assumed or substituted for, upon your Involuntary Termination within the twelve (12)-month period (or for the period of time or lack of a period of time otherwise set forth in the Employment Agreement), following the consummation of the Change in Control.

 

Involuntary Termination” means termination of your Service by reason of (i) your involuntary dismissal by the Company or its successor for reasons other than Cause; or (ii) your voluntary resignation for Good Reason (and without Cause) as defined in the Employment Agreement, or if none, then following (x) the assignment of substantial duties or responsibilities inconsistent with your position at the Company, or any other action by the Company which results in a substantial diminution of your duties or responsibilities other than any such reduction which is remedied by the Company within thirty (30) days of receipt of written notice from you; (y) a requirement that you work principally from a location that is twenty (20) miles further from your residence than the Company’s principal place of business on the date of this Agreement; or (z) a substantial reduction in your aggregate base salary and other compensation taken as a whole, excluding any reductions caused by the failure to achieve performance targets. To qualify as an “Involuntary Termination,” you must provide notice to the Company or its successor of any of the foregoing occurrences within ninety (90) days of the initial occurrence, and the Company shall have thirty (30) days thereafter to remedy such occurrence. In addition, you must terminate your Service at a time agreed reasonably with the Company, but in any event within one hundred twenty (120) days from the initial occurrence of any of the foregoing events.

 

Forfeiture of Unvested Options / Term  

Unless the termination of your Service triggers accelerated vesting or other treatment of your Option pursuant to the terms of this Agreement, the Plan, or any Employment Agreement, you will automatically and immediately forfeit to the Company the unvested portion of the Option in the event your Service terminates for any reason.

 

Your Option will expire in any event at the close of business at Company headquarters on the tenth (10th) anniversary of the Grant Date, as shown on the cover sheet. Your Option will expire earlier if your Service terminates, as described below.

 

Expiration of Vested Options After Service Terminates  

If your Service terminates for any reason, other than death, Disability, or Cause, then the vested portion of your Option will expire at the close of business at Company headquarters on the ninetieth (90th) day after your termination date.

 

If your Service terminates because of your death or Disability, or if you die during the ninety (90)-day period after your termination for any reason (other than Cause), then the vested portion of your Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of your death or termination for Disability. During that twelve (12)-month period, your estate or heirs may exercise the vested portion of your Option.

 

If your Service is terminated for Cause, then you shall immediately forfeit all rights to your entire Option (both vested and unvested portions), and the Option shall immediately and automatically expire.

 

 

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Forfeiture of Rights  

If you should take actions in violation or breach of, or in conflict with, any non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any Affiliate, any confidentiality obligation with respect to the Company or any Affiliate, otherwise in competition with the Company or any Affiliate, any Company or Affiliate policy or procedure, any other agreement, or any other obligation to the Company or any Affiliate, the Company has the right to cause an immediate forfeiture of your rights to this Option, and the Option shall immediately and automatically expire.

 

In addition, if you have exercised any portion of the Option during the two (2)-year period prior to your actions, you will owe the Company a cash payment (or forfeiture of shares of Stock) in an amount determined as follows: (i) for any shares of Stock that you have sold prior to receiving notice from the Company, the amount will be the proceeds received from the sale(s), less the Option Price, and (ii) for any shares of Stock that you still own, the amount will be the number of shares of Stock owned times the Fair Market Value of the shares of Stock on the date you receive notice from the Company, less the Option Price (provided, that the Company may require you to satisfy your payment obligations hereunder either by forfeiting and returning to the Company the shares or any other shares of Stock or making a cash payment or a combination of these methods as determined by the Company in its sole discretion).

 

Leaves of Absence  

For purposes of this Agreement, your Service does not terminate when you go on a bona fide leave of absence that was approved by your employer (Walker & Dunlop, LLC or any Affiliate of the Company that directly employs you) in writing if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by Applicable Laws. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.

 

Your employer may determine, in its discretion, which leaves count for this purpose and when your Service terminates for all purposes under the Plan in accordance with the provisions of the Plan. Notwithstanding the foregoing, the Company may determine, in its discretion, that a leave counts for this purpose even if your employer does not agree.

 

 

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Notice of Exercise   The Option may be exercised, in whole or in part, to purchase a whole number of vested shares of Stock of not less than one hundred (100) shares, unless the number of vested shares purchased is the total number available for purchase under the Option, by following the procedures set forth in the Plan and in this Agreement.   When you wish to exercise this Option, you must exercise in a manner required or permitted by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.  
     
Form of Payment  

When you exercise your Option, you must include payment of the aggregate Option Price for the shares you are purchasing. Payment may be made in one (or a combination) of the following forms:  

 

    Cash, your personal check, a cashier’s check, a money order, or another cash equivalent acceptable to the Company.  

 

     Shares of Stock which are owned by you and which are surrendered to the Company, including through the withholding of shares otherwise issuable upon exercise. The Fair Market Value of the shares as of the effective date of the Option exercise will be applied to the Option Price.  

 

     By delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Option Price and any withholding taxes.

     
  Evidence of Issuance     The issuance of the shares upon exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates.  
     
Withholding   You agree as a condition of this Option that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the Option exercise or the sale of Stock acquired under this Option. In the event that the Company or any Affiliate, as applicable, determines that any federal, state, local, or foreign tax or withholding payment is required relating to the exercise of this Option or the sale of Stock arising from this Option, the Company or any Affiliate, as applicable, shall have the right to require such payments from you or withhold such amounts from other payments due to you from the Company or any Affiliate, as applicable or withhold the delivery of vested shares of Stock otherwise deliverable under this Agreement.  

 

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Notice and Non-Solicitation  

The following notice and non-solicitation provisions will apply to you unless you have entered into an Employment Agreement that has more restrictive notice and non-solicitation provisions (in which case, the more restrictive provisions in such Employment Agreement will apply).

 

You agree as a condition of this Option that in the event you decide to leave the Company or any Affiliate for any reason, you will provide the Company or the Affiliate with thirty (30) days’ prior notice of your departure (during which period, in the Company’s or an Affiliate’s sole discretion, you may be placed on paid leave), and you will not commence employment with anyone else during that period. For a period of ninety (90) days following the termination of your Service for any reason, you will not directly or indirectly solicit any employees of the Company or any Affiliate for employment or encourage any employee to leave the Company or any Affiliate.

 

Retention Rights  

This Agreement and this Option do not give you the right to be retained by the Company or any Affiliate in any capacity. Unless otherwise specified in an Employment Agreement, the Company or any Affiliate, as applicable, reserves the right to terminate your Service at the Company or an Affiliate at any time and for any reason.

 

 Stockholder Rights  

You (and your estate or heirs) have no rights as a stockholder with respect to the shares of Stock underlying the Option unless and until the shares of Stock underlying the Option have been issued upon exercise of your Option and either a certificate evidencing your Stock has been issued or an appropriate entry has been made on the Company’s books. No adjustments are made for dividends, distributions, or other rights if the applicable record date occurs before your certificate is issued (or an appropriate book entry is made), except as described in the Plan.

 

Corporate Activity  

Your Option shall be subject to the terms of any applicable agreement of merger, liquidation, or reorganization in the event the Company is subject to such corporate activity, consistent with Section 17 of the Plan.

 

Clawback  

This Option is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company “clawback” or recoupment policy or Applicable Laws that require the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy or Applicable Laws.

 

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under Applicable Laws, and you are subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly negligent in failing to prevent the misconduct, you shall reimburse the Company the amount of any payment in settlement of this Option earned or accrued during the twelve (12)-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

 

 

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Applicable Law  

This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

The Plan  

The text of the Plan is incorporated into this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.

 

This Agreement, the Plan, and any Employment Agreement constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments, or negotiations concerning this Option are superseded; except that any written consulting, confidentiality, non-competition, non-solicitation, and/or severance agreement between you and the Company or an Affiliate, as applicable, shall supersede this Agreement with respect to its subject matter.

 

Data Privacy  

To administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting the Option, you give explicit consent to the Company to process any such personal data.

 

Electronic Delivery  

By accepting the Option, you consent to receive documents related to the Option by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.

 

Code Section 409A   The grant of the Option under this Agreement is intended to comply with Code Section 409A (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A.  Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty.    

 

By accepting this Agreement, you agree to all of the terms and conditions described above and in the Plan. In the event that any term of this Agreement conflicts with the terms of an Employment Agreement, the terms of such Employment Agreement shall supersede the conflicting terms herein.

 

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