Exhibit 10(u)
FIRST AMENDMENT TO
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This First Amendment to Employment and Non-Competition Agreement (the
"FIRST AMENDMENT"), made and entered into as of the 5th day of October 1998, is
by and among (i) CRIIMI MAE Management, Inc., a Maryland corporation (the
"COMPANY"), (ii) H. Xxxxxxx Xxxxxxxxxx (the "EXECUTIVE") and (iii) CRIIMI MAE
Inc., a Maryland corporation and the parent of the Company (the "PARENT").
RECITALS
1. On April 20, 1995, the Company and the Executive entered into an
Employment and Non-Competition Agreement (the "EMPLOYMENT AGREEMENT").
2. On October 5, 1998, the Company and the Parent each filed a voluntary
petition seeking relief under the provisions of chapter 11, title 11 of the
United States Code ("CHAPTER 11").
3. On February 23, 1999, the court, in the case captioned IN RE CRIIMI
MAE INC., ET AL., Ch. 11 Case No. 9823115 (Jointly Administered) (the
"BANKRUPTCY COURT"), entered an order, attached hereto as EXHIBIT A (the
"ORDER"), approving, among other things, (i) the Company's assumption of the
Employment Agreement and (ii) the implementation of an employee retention
program with respect to certain key employees of the Company, including the
Executive, all as amended by the Order, effective NUNC PRO TUNC to October 5,
1998, upon the execution of this First Amendment by the parties hereto (the
"RETENTION PROGRAM").
4. This First Amendment amends the Employment Agreement in accordance
with the modifications set forth in the Order.
5. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
1. AMENDATORY PROVISIONS. The Employment Agreement is hereby amended as
follows:
(a) Section 3.2 to the Employment Agreement is hereby deleted in its
entirety and the following shall be substituted in lieu thereof:
3.2 DISCRETIONARY BONUS. Bonuses awarded in the sole discretion of
the Board in 1998 shall be capped at 20% of the Executive's 1998 base
annual salary. No other discretionary bonuses shall be awarded so long as
the Parent remains in Chapter 11 without (a) written approval of the
Official Committee of Unsecured Creditors of the Parent and the Official
Committee of Equity Security Holders of the Parent or (b) by order of the
Bankruptcy Court.
(b) Section 3.4 is hereby deleted in its entirety and the following shall
be substituted in lieu thereof:
3.4 [INTENTIONALLY OMITTED]
(c) The second sentence of Section 3.8 to the Employment Agreement is
hereby deleted in its entirety.
(d) Section 3.9 to the Employment Agreement is hereby deleted in its
entirety and the following shall be substituted in lieu thereof:
3.9 [INTENTIONALLY OMITTED]
(e) Section 6.4.5A to the Employment is hereby deleted in its entirety
and the following shall be substituted in lieu thereof:
A. Any person or group of commonly controlled persons (excluding
the Executive and Xxxxxxx X. Xxxxxxx) obtains ownership or control,
directly or indirectly, of forty percent (40%) or more of the voting
control of, or beneficial rights to, the voting capital stock of the
Parent.
(f) Section 6.4.5B to the Employment Agreement is hereby deleted in its
entirety and the following shall be substituted in lieu thereof:
B. The Parent's stockholders approve, and it is implemented, (i)
an agreement to merge or consolidate with another corporation or other
entity resulting (whether separately or in connection with a series of
related transactions) in a change in ownership of forty percent (40%) or
more of the voting control of, or beneficial rights \ to, the voting
capital stock of the Parent, or (ii) an agreement to sell or otherwise
dispose of all or substantially all of the Parent's assets (including,
without limitation, a plan of liquidation or dissolution).
(g) Section 6.4.5C to the Employment is hereby deleted in its entirety
and the following shall be substituted in lieu thereof:
C. The Parent no longer owns, directly or indirectly, a majority
of the voting stock of the Company, unless (i) the Parent or (ii) a
2
subsidiary, the majority of the voting stock of which is owned, directly
or indirectly, by the Parent, assumes this Agreement.
(h) Section 7 to the Employment Agreement is hereby deleted in its
entirety and the following shall be substituted in lieu thereof:
7 [INTENTIONALLY OMITTED]
(i) Section 8.13 to the Employment Agreement is hereby deleted in its
entirety and the following shall be substituted in lieu thereof:
8.13 INDEMNIFICATION. The Parent shall (a) pay as an
administrative expense all indemnification to the extent provided for in
the Bylaws of the Parent and/or the Company up to and including amounts
totaling a maximum of $250,000 for the Executive and all other covered
persons, constituting the aggregate deductible under applicable Officer
and Director insurance policies, (b) apply any available portion of
proceeds of applicable Officer and Director insurance policies, up to $20
million in the aggregate for all covered persons, to indemnification of
the Executive; and (c) pay as an administrative expense all uninsured
indemnification arising from the post-petition actions of the Executive
for which he is otherwise entitled to indemnification under the Bylaws of
the Parent and/or the Company.
(j) Section 8.14 to the Employment Agreement is hereby deleted in its
entirety and the following shall be substituted in lieu thereof:
8.14 [INTENTIONALLY OMITTED]
2. RESERVATION OF RIGHTS. The Company, the Parent and the Executive
reserve all rights as expressly set forth in the Order.
3. EXISTING AGREEMENT. Except as expressly amended hereby, all of the
terms, covenants and conditions of the Employment Agreement (i) are ratified and
confirmed; (ii) shall remain unamended and not waived; and (iii) shall continue
in full force and effect.
4. GOVERNING LAW. This First Amendment shall be governed by the internal
laws of the State of Maryland without giving effect to the principles of
conflict of laws thereof.
5. COUNTERPARTS. This First Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, taken
together, shall constitute one and the same instrument.
6. ENFORCEABILITY. If any provision of this First Amendment shall be held
to be illegal, invalid or unenforceable under any applicable law, then such
contravention or invalidity shall not invalidate the entire First Amendment or
the Employment Agreement. Such provision
3
shall be deemed to be modified to the extent necessary to render it legal, valid
and enforceable, and if no such modification shall render it legal, valid and
enforceable, then this First Amendment and the Employment Agreement shall be
construed as if not containing the provision held to be invalid, and the rights
and obligations of the parties shall be construed and enforced accordingly.
7. CONFLICTS. The Order shall govern in all matters of conflict between
any of the provisions of the Order and this First Amendment.
4
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
executed by its duly authorized officer and the Executive has executed this
First Amendment as of the date and year first above written.
CRIIMI MAE MANAGEMENT, INC.,
a Maryland Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
/s/ H. Xxxxxxx Xxxxxxxxxx
--------------------------
H. Xxxxxxx Xxxxxxxxxx
In consideration of the services that the Executive is to perform on
behalf of the Company, the Parent agrees that it will fulfill its obligations
set forth expressly herein.
IN WITNESS WHEREOF, CRIIMI MAE Inc. has executed this First Amendment as
of the date and year first above written.
CRIIMI MAE INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
Chairman of the Board
5
