Form of Director Cash Compensation Deferral Election Form

Contract Categories: Human Resources - Compensation Agreements
EX-10.20 4 orc10K20211231x1020.htm EXHIBIT 10.20 orc10K20211231x1020
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 10.20
ORCHID ISLAND CAPITAL, INC.
 
DIRECTOR CASH COMPENSATION
DEFERRAL ELECTION FORM
By completing this form, you irrevocably elect to receive the payment of any cash compensation
from retainers, meeting fees or committee fees (collectively “
Cash Compensation
”) that may be
paid to you by Orchid Island Capital, Inc. (the “
Company
”) in 2022, and if applicable for future
years as described below, in the form specified below.
 
Please complete this Cash Compensation
Deferral Election Form and return a signed copy to Bob Cauley no later than 5:00 p.m. EST on
December 31, 2021 (the “
Election Deadline
”).
 
All terms not defined herein are defined in the
Exhibit A Definitions
.
 
Name:
 
______________________________________
NOTE: This Cash Compensation Deferral Election Form will apply to all Cash
Compensation you may receive from the Company on and after January 1, 2022 until such
time as a new signed Cash Compensation Deferral Election Form is received by the
Company.
 
Any new signed Cash Compensation Deferral Election Form must be received
by the Company no later than December 31 of the calendar year preceding the calendar
year in which it is intended to apply.
STEP 1: FORM OF COMPENSATION
You
 
may select one or any combination of the following payment options for Cash
Compensation that you will earn in calendar year 2022, and if applicable for future years.
 
The
payment options include “
Current Cash
” (
i.e.
, paid in cash pursuant to the Company’s normal
schedule for payment); “
Deferred Cash
” (
i.e.
, paid in cash at the time elected in
STEP 3
 
below)
and “
Deferred Stock Units
” (
i.e.
, paid as a number of shares of the Company’s common stock
equal to the number of Deferred Stock Units as provided under the separate Deferred Stock Units
Deferral
 
Election Form).
 
The percentage of your Cash Compensation allocated to the various options must equal 100%.
 
Any amounts not allocated will be deemed to have been elected to be paid in the form of Current
Cash.
 
I irrevocably elect for my Cash Compensation to be allocated as follows:
Indicate the
percentage (in 1%
increments) that you
designate for receipt
of Cash
Compensation earned
for 2022, and if
Current
 
Cash
 
(paid in cash pursuant to
the Company’s
 
normal
schedule for payment)
Deferred
 
Cash
(invested in selected fund
set forth below in
STEP
3
)
Deferred Stock Units
(“DSUs”)
(paid in DSUs pursuant
to a separate election
form)
 
________________%
 
_______________%
______________%
 
 
 
 
 
 
 
 
 
 
 
 
 
applicable for future
years.
Deferred Cash Election
If you elected Deferred Cash in
STEP 1
, please review and complete
STEPS 2, 3 and 4
 
below.
DSUs
If you elected DSUs in
STEP 1
, please complete the separate Deferred Stock Units Deferral
Election Form and Dividend Equivalents Deferral Election Form, if applicable, provided by the
Company and review and complete
STEP 4
 
below.
 
The number of DSUs granted as a result of your deferral election will be equal to (1) the amount
of your Deferred Cash elected above, divided by (2) the Fair Market Value
 
of the Company’s
common stock on the DSU grant date.
 
Please note that the DSUs you will receive pursuant to
this election will be granted as provided in the grant agreement and Deferred Stock Units
Deferral Election Form and settled in the Company’s common stock only if at the time of grant
the Company determines there will be shares available at the time of settlement.
 
If the Company
determines that shares will not be available at settlement, then the DSUs shall be settled in cash.
 
Any associated dividend equivalents will be governed by the grant agreement and the separate
Dividend Equivalents Deferral Election Form, if applicable.
 
STEP 2: ESTABLISHMENT OF ACCOUNT AND INVESTMENT OPTIONS
If you elected Deferred Cash in
STEP 1
, the Company will establish a bookkeeping account in
your name (your “
Account
”) and may establish one or more Accounts as it determines are
necessary.
 
Funds shall not actually be invested in the investment options available below, and
you will not have any real or beneficial ownership in any investment option. Your
 
Account is
solely a device for the measurement and determination of the amounts to be paid to you pursuant
to this Cash Compensation Deferral Election Form and shall not constitute or be treated as a trust
fund of any kind.
 
You
 
must elect to notionally invest your funds in one of the three investment
options below, and all fund distributions with respect to the investment options below will be
deemed to be reinvested.
 
I elect for my Deferred Cash to be deemed to be invested in the following investment option
(
Choose one
):
_____Vanguard
 
Short-Term Treasury
 
Index Fund (VGSH); OR
_____Va
 
nguard Total Bond Market Fund (BND); OR
_____Vanguard
 
Total Equity Stock
 
Market Index Fund (VTI).
STEP 3: DISTRIBUTION ELECTION
 
 
 
If you elected Deferred Cash in
STEP 1
, you must specify when and in what form you want to
receive payment for your 2022 Cash Compensation, and if applicable for future years.
 
I hereby irrevocably elect to receive my 2022 Cash Compensation, and if applicable for future
years, upon the earlier to occur of my death, Disability (as defined in Treasury Regulation
Section 1.409A-3(i)(4)), a Change in Control, or (
select only one of the following
) (each such
date a “
Payment Event
”):
 
☐
 
(a)
 
The
 
date
 
I
 
incur
 
a
 
Separation
 
from
 
Service
 
with
 
the
 
Company,
 
determined
 
in
accordance with the Company’s written and generally applicable policies.
☐
 
(b)
 
The
 
anniversary of
 
the date of
 
I incur
 
a Separation
 
from Service with
 
the
Company,
 
determined
 
in
 
accordance
 
with
 
the
 
Company’s
 
written
 
and
 
generally
 
applicable
policies.
☐
 
(c)
 
As
 
soon
 
as
 
administratively
 
feasible
 
following
 
________________
 
___,
 
_____
(
Insert applicable date
).
 
I hereby irrevocably elect to receive my Cash Compensation in the form below:
☐
 
(a)
 
Lump Sum; OR
☐
 
(b)
 
Annual Installments.
 
_________ (
Specify number of annual installments; must be 2-15 years
).
Except as provided below, payments hereunder shall be made or commence on the Scheduled
Payment Date following a Payment Event. The deferral under this Cash Compensation Deferral
Election Form is intended to comply with the applicable requirements of Code Section 409A, as
amended from time to time, and the guidance and regulations promulgated thereunder and
successor provisions, guidance and regulations thereto (the “
Nonqualified Deferred
Compensation Rules
”) and shall be construed and interpreted in accordance with such intent.
 
If
you are deemed to be a “specified employee” within the meaning of the Nonqualified Deferred
Compensation Rules, as determined by the Committee (as defined below), at a time when you
become eligible for payment upon your Separation from Service within the meaning of the
Nonqualified Deferred Compensation Rules, then to the extent necessary to prevent any
accelerated or additional tax under the Nonqualified Deferred Compensation Rules, such
payment will be delayed until the earlier of: (a) the date that is six months following your
Separation from Service and (b) your death.
 
Notwithstanding the foregoing, the Company and
its affiliates make no representations that the deferral is compliant with the Nonqualified
Deferred Compensation Rules and in no event shall the Company or any affiliate be liable for all
or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on
account of non-compliance with the Nonqualified Deferred Compensation Rules.
 
STEP 4: GENERAL PROVISIONS, SIGNATURE AND AUTHORIZATION
GENERAL PROVISIONS
Administration
.
 
This Cash Compensation Deferral Election Form will be administered by the
Compensation Committee of the Board of Directors (the “
Committee
”) of the Company.
 
The
Committee will have sole and absolute discretion regarding the exercise of its powers and duties
under this Cash Compensation Deferral Election Form, including the following powers and
duties:
●
To
 
direct
 
the
 
administration
 
of
 
the
 
Cash
 
Compensation
 
Deferral
 
Election
 
Form
 
in
accordance with the provisions herein set forth;
●
To
 
adopt rules
 
of procedure
 
and regulations
 
necessary for
 
the administration
 
of the
 
Cash
Compensation Deferral Election Form;
●
To
 
determine
 
all
 
questions
 
with
 
regard
 
to
 
your
 
rights
 
under
 
the
 
Cash
 
Compensation
Deferral Election Form;
●
To
 
furnish the Company
 
with information that
 
the Company may
 
require for tax
 
or other
purposes;
●
To
 
engage the service of
 
counsel (who may,
 
if appropriate, be counsel
 
for the Company),
actuaries, and agents whom
 
it may deem advisable
 
to assist it
 
with the performance of
 
its
duties;
●
To prescribe procedures to be followed in obtaining benefits;
●
To
 
receive
 
information
 
as
 
is
 
necessary
 
for
 
the
 
proper
 
administration
 
of
 
the
 
Cash
Compensation Deferral Election Form;
●
To establish and maintain, or cause to be maintained, the individual Accounts
 
described in
STEP 2
 
above;
●
To
 
create
 
and
 
maintain
 
such
 
records
 
and
 
forms
 
as
 
are
 
required
 
for
 
the
 
efficient
administration of the Plan; and
●
To
 
exercise such
 
other powers
 
and perform
 
such other
 
duties as
 
it may
 
deem necessary,
desirable,
 
advisable
 
or
 
proper
 
for
 
the
 
supervision
 
and
 
administration
 
of
 
the
 
Cash
Compensation Deferral Election Form.
 
Funding and Creditor Status
.
 
Benefits hereunder will be funded solely by the Company.
 
Benefits will constitute an unfunded general obligation of the Company, but the Company may,
in its discretion, create reserves, funds and/or provide for amounts to be held in trust to fund such
benefits on its behalf.
 
Payment of benefits may be made by the Company, any trust established
by the Company or through a service or benefit provider to the Company or such trust.
 
You
 
will
be a general unsecured creditors of the Company with respect to the payment of any amounts
hereunder.
 
 
No Reduction of Company Rights
.
 
Nothing contained in this Cash Compensation Deferral
Election Form will be construed as a right of any director to be renominated to serve as a
director.
 
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE
 
OF MARYLAND APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED THEREIN, EXCLUSIVE OF THE
CONFLICT OF LAWS PROVISIONS OF MARYLAND LAW.
SIGNATURE AND ACKNOWLEDGEMENT
I understand that my rights to payment hereunder are subject to the rights of the general
creditors of the Company in the event of its insolvency.
I further understand that this Cash
Compensation Election Form will become effective and irrevocable as of 5:00 p.m. EST on
December 31, 2021, which is the Election Deadline.
Once I have elected the form and time of
payment of my Cash Compensation by filing this completed Cash Compensation Election
Form, I understand that my election will be irrevocable.
I acknowledge that, if I do not
complete and timely submit this Cash Compensation Election Form, my Cash Compensation will
be paid to me pursuant to the Company’s normal schedule for payment.
By executing this Cash Compensation Election Form, I hereby acknowledge my understanding
of, and agreement with, the terms and provisions set forth in this Cash Compensation Election
Form and the Deferred Stock Units Deferral Election Form and Dividend Equivalents Deferral
Election Form,
 
as applicable.
 
DIRECTOR
 
 
Name:
 
Date:
 
 
EXHIBIT A
DEFINITIONS
1.
 
“
Change in Control
” means a change in control of the Company which will be
deemed to have occurred after the date hereof if:
 
(a)
 
any “person” as such term is used in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), as modified and used in
Sections 13(d) and 14(d) thereof except that such term shall not include (A) the Company
or any of its subsidiaries, (B) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its affiliates, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities, (D) any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of the Company’s common stock,
or (E) any person or group as used in Rule 13d-1(b) under the Exchange Act, is or
becomes the Beneficial Owner, as such term is defined in Rule 13d-3 under the Exchange
Act, directly or indirectly, of securities of the Company representing more than 50% of
the combined voting power of outstanding Company securities;
(b)
 
during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company (the “Board”),
and any new director (other than (i) a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in clause (a), (c) or
(d) hereof or (ii) a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
(c)
 
there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other corporation, other than a
merger or consolidation in which the holders of Company voting securities immediately
before the merger or consolidation continue to own more than 50% or more of the
combined voting power of the Company or the surviving entity in the merger or
consolidation or any parent thereof outstanding immediately after such merger or
consolidation; or
(d)
 
there is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (or any transaction having a
similar effect, including a liquidation) other than a sale or disposition by the Company of
all or substantially all of the Company’s assets to an entity,
 
more than fifty percent (50%)
of the combined voting power and common stock of which is owned by stockholders of
the Company in substantially the same proportions as their ownership of the common
stock of the Company immediately prior to such sale.
If a Change in Control (as defined in clauses (a) through (d) above) constitutes a payment
event under this Cash Compensation Deferral Election Form and such payment is subject
to Section 409A of the Code, no payment will be made under that award on account of a
Change in Control unless the event described in clause (a), (b), (c) or (d) above, as
applicable, constitutes a “change in control event” as defined in Section 409A of the
Code.
2.
 
“
Code
” means the Internal Revenue Code of 1986, as amended.
3.
 
“
Fair Market Value
” means as defined in the Orchid Island Capital, Inc. 2021
Equity Incentive Plan, as amended from time to time.
4.
 
“
Scheduled Payment Date
” means as soon as administratively practicable
following the payment date selected in the Cash Compensation Deferral Election Form.
5.
 
“
Separation from Service
” means the date that a director ceases to provide
services to the Company as a member of the Board of Directors; provided, however, that the
event constitutes a “separation from service” within the meaning of Treasury Regulation Section
1.409A-1(h) as defined by Section 409A of the Code.