Published on October 23, 2007
MFA
MORTGAGE INVESTMENTS, INC.
2004
EQUITY COMPENSATION PLAN
FORM
OF PHANTOM SHARE AWARD AGREEMENT
AGREEMENT
by and between MFA Mortgage Investments, Inc., a Maryland corporation (the
“Company”), and _____ (the “Grantee”), dated as of the __ day of
_______, ____ (the “Effective Date”).
WHEREAS,
the Company maintains the MFA Mortgage Investments, Inc. 2004 Equity
Compensation Plan, as it may be amended from time to time (the “Plan”)
(capitalized terms used but not defined herein shall have the respective
meanings ascribed thereto by the Plan);
WHEREAS,
the Grantee, as an employee of the Company, is an Eligible Person;
and
WHEREAS,
the Committee has determined that it is in the best interests of the Company
and
its stockholders to grant Phantom Shares (also generally known as “restricted
stock units” or “RSUs”) to the Grantee subject to the terms and conditions set
forth below.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Grant
of Phantom Shares.
The
Company hereby grants the Grantee __________ Phantom Shares. The
Phantom Shares are subject to the terms and conditions of this Agreement, and
are also subject to the provisions of the Plan. The Plan is hereby
incorporated herein by reference as though set forth herein in its
entirety.
2. Vesting.
The
Phantom Shares shall be subject to the terms and conditions set forth in this
paragraph 2. To the extent such terms or conditions conflict with any
provision in the Plan, the terms and conditions set forth herein shall
govern.
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(a)
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The
Phantom Shares shall vest, except as provided herein, on
________________.
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(b)
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In
the event the Grantee has a Termination of Service (x) for Cause
or (y) by
the Grantee for any reason other than (a) Good Reason or (b) his
or her
death or Disability, during the applicable period of forfeiture,
then (1)
all unvested Phantom Shares still subject to restriction shall thereupon,
and with no further action, be forfeited by the Grantee and (2) all
vested
Phantom Shares shall be settled as provided
hereunder.
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(c)
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In
the event (x) the Grantee has a Termination of Service (a) on account
of
his or her death or Disability, (b) by the Company for any reason
other
than Cause (including non-renewal of the Grantee’s employment agreement
with the Company (if any)), or (c) by the Grantee for Good Reason,
or (y)
of a Change in Control, during the applicable period of forfeiture,
then
all Phantom Shares granted to the Grantee hereunder shall immediately
vest
and shall be settled as provided
hereunder.
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(d)
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Except
as contemplated above, in the event that the Grantee has a Termination
of
Service, any and all of the Grantee's Phantom Shares which have not
vested
prior to or as of such termination shall thereupon, and with no further
action, be forfeited and cease to be
outstanding.
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3.
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Dividend
Equivalent Rights.
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A
Dividend Equivalent Right is hereby granted to the Grantee, consisting of the
right to receive, with respect to each Phantom Share, cash in an amount equal
to
the cash dividend distributions paid in the ordinary course on a share of Common
Stock to the Company's common stockholders (each, a “Dividend Payment”),
as set forth below. For each Phantom Share then outstanding, whether
or not then vested, if a cash dividend is payable in the ordinary course on
a
share of Common Stock, the Company shall make a payment to the Grantee in an
amount equal to the applicable Dividend Payment, on or about the date of the
Dividend Payment, but in no event later than March 15th of the year following
the date of the Dividend Payment.
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4.
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Settlement.
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Each
vested and outstanding Phantom Share shall be settled in Common Stock of the
Company on the earlier of a Termination of Service (for any reason) or on
____________. For the avoidance of doubt, to the extent the terms of
this paragraph 4 conflict with any terms of the Plan relating to the settlement
of Phantom Shares, the terms of this paragraph 4 shall govern. To the
extent any payment pursuant to this paragraph 4 is required to be delayed
six months pursuant to the special rules of Section 409A related to
“specified employees,” each affected payment shall be delayed until six months
after the Grantee’s Termination of Service (other than on account of the death
of the Grantee).
5. Definitions
For
purposes of this Agreement, the following terms shall be defined as set forth
below:
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(a)
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“Cause”
shall mean the Grantee’s (i) conviction, or entry of a guilty plea or
a plea of nolo contendre with respect to, a felony, a crime of moral
turpitude or any crime committed against the Company, other than
traffic
violations; (ii) engagement in willful misconduct, willful or gross
negligence, or fraud, embezzlement or misappropriation relating to
significant amounts, in each case in connection with the performance
of
the Grantee’s duties on behalf of the Company; (iii) failure to
adhere to the lawful directions of the Chief Executive Officer of
the
Company and/or the Board, as the case may be, that are reasonably
consistent with the Grantee’s duties on behalf of and position with the
Company; (iv) breach in any material respect of any non-compete
agreement or obligation resulting in material and demonstrable economic
injury to the Company; (v) chronic or persistent substance abuse that
materially and adversely affects his or her performance of his or
her
duties on behalf of the Company or (vi) breach in any material
respect of the terms and provisions of any employment agreement (if
any)
with the Company resulting in material and demonstrable economic
injury to
the Company.
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(b)
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“Change
in Control” shall mean the occurrence of any one of the following
events:
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(i) any
“person”, as such term is used in Sections 13(d) and 14(d) of the Act
(other than the Company, any of its affiliates or any trustee, fiduciary or
other person or entity holding securities under any employee benefit plan or
trust of the Company or any of its affiliates) together with all affiliates
and
“associates” (as such term is defined in Rule 12b-2 under the Act) of such
person, shall become the “beneficial owner” (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing 30% or more of either (A) the combined voting power of
the Company’s then outstanding securities having the right to vote in an
election of the Board (“voting securities”) or (B) the then
outstanding shares of Common Stock (in either such case other than as a result
of an acquisition of securities directly from the Company); or
(ii) persons
who, as of the effective date of this Agreement, constitute the Company’s Board
(the “Incumbent Directors”) cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that
any
person becoming a Director of the Company subsequent to the effective date
whose
election or nomination for election was approved by a vote of at least a
majority of the Incumbent Directors shall, for purposes of this Agreement,
be
considered an Incumbent Director; or
(iii) there
shall occur (A) any consolidation or merger of the Company or any
subsidiary where the stockholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule 13d-3 under the
Act), directly or indirectly, shares representing in the aggregate 60% or more
of the voting securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single plan)
of all or substantially all of the assets of the Company or (C) any plan or
proposal for the liquidation or dissolution of the Company.
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Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred
for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by the Company which, by reducing the number
of
shares of Common Stock or other voting securities outstanding, increases
(x) the proportionate number of shares of Common Stock beneficially
owned by any person to 30% or more of the shares of Common Stock
then
outstanding or (y) the proportionate voting power represented by the
voting securities beneficially owned by any person to 30% or more
of the
combined voting power of all then outstanding voting securities;
provided,
however, that, if any person referred to in clause (x) or (y) of this
sentence shall thereafter become the beneficial owner of any additional
shares of Common Stock or other voting securities (other than pursuant
to
a stock split, stock dividend, or similar transaction), then a “Change in
Control” shall be deemed to have occurred for purposes of this
Paragraph 5(b).
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(c)
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“Disability”
shall mean the Grantee’s inability for a period of six consecutive months,
to render substantially the services provided for on behalf of the
Company
by reason of mental or physical disability, whether resulting from
illness, accident or otherwise, other than by reason of chronic or
persistent abuse of any substance (such as narcotics or
alcohol).
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(d)
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“Good
Reason” shall mean:
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(i) a
material diminution in the Grantee’s title, duties or
responsibilities;
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(ii) relocation
of the Grantee’s place of employment without his or her consent outside the New
York City metropolitan area;
(iii) the
failure of the Company to pay within thirty (30) business days any payment
due from the Company;
(iv) the
failure of the Company to pay within a reasonable period after the date when
amounts are required to be paid to the Grantee under any benefit programs or
plans; or
(v) the
failure by the Company to honor any of its material obligations to the
Grantee.
6. Miscellaneous.
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(a)
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The
value of a Phantom Share may decrease depending upon the Fair Market
Value
of a Share from time to time. Neither the Company nor the
Committee, nor any other party associated with the Plan, shall be
held
liable for any decrease in the value of the Phantom Shares. If
the value of such Phantom Shares decrease, there will be a decrease
in the
underlying value of what is distributed to the Grantee under the
Plan and
this Agreement.
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(b)
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With
respect to this Agreement, (i) the Phantom Shares are bookkeeping
entries,
(ii) the obligations of the Company under the Plan are unsecured
and
constitute a commitment by the Company to make benefit payments in
the
future, (iii) to the extent that any person acquires a right to receive
payments from the Company under the Plan, such right shall be no
greater
than the right of any general unsecured creditor of the Company,
(iv) all
payments under the Plan (including distributions of Shares) shall
be paid
from the general funds of the Company and (v) no special or separate
fund
shall be established or other segregation of assets made to assure
such
payments (except that the Company may in its discretion establish
a
bookkeeping reserve to meet its obligations under the
Plan). The award of Phantom Shares is intended to be an
arrangement that is unfunded for tax purposes and for purposes of
Title I
of the Employee Retirement Income Security Act of 1974, as
amended.
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(c)
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THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND,
WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS. The
captions of this Agreement are not part of the provisions hereof
and shall
have no force or effect. This Agreement may not be amended or
modified except by a written agreement executed by the parties hereto
or
their respective successors and legal representatives. The
invalidity or unenforceability of any provision of this Agreement
shall
not affect the validity or enforceability of any other provision
of this
Agreement.
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(d)
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The
Committee may construe and interpret this Agreement and establish,
amend
and revoke such rules, regulations and procedures for the administration
of this Agreement as it deems appropriate. In this connection,
the Committee may correct any defect or supply any omission, or reconcile
any inconsistency in this Agreement or in any related agreements,
in the
manner and to the extent it shall deem necessary or expedient to
make the
Plan fully effective. All decisions and determinations by the
Committee in the exercise of this power shall be final and binding
upon
the Company and the Grantees.
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(e)
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All
notices hereunder shall be in writing and, if to the Company, shall
be
delivered to the Board or mailed to its principal office, addressed
to the
attention of the Committee and, if to the Grantee, shall be delivered
personally or mailed to the Grantee at the address appearing in the
records of the Company. Such addresses may be changed at any
time by written notice to the other party given in accordance with
this
paragraph 6(e).
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(f)
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The
failure of the Grantee or the Company to insist upon strict compliance
with any provision of this Agreement or the Plan, or to assert any
right
the Grantee or the Company, respectively, may have under this Agreement
or
the Plan, shall not be deemed to be a waiver of such provision or
right or
any other provision or right of this Agreement or the
Plan.
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(g)
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Nothing
in this Agreement shall (x) confer on the Grantee any right to continue
in
the service of the Company or its Subsidiaries or otherwise confer
any
additional rights or benefits upon the Grantee with respect to the
Grantee’s employment with the Company or (y) interfere in any way with the
right of the Company or its Subsidiaries and its stockholders to
terminate
the Grantee’s service at any time.
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(h)
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This
Agreement contains the entire agreement between the parties with
respect
to the subject matter hereof and supersedes all prior agreements,
written
or oral, with respect thereto.
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IN
WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as
of
the day and year first above written.
MFA MORTGAGE INVESTMENTS, INC. | |||
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By:
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Name: | |||
Title: | |||
[GRANTEE]
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