EMPLOYMENT AGREEMENT
EXHIBIT
10.2
This
Employment Agreement (“Agreement”)
is
executed on this 17TH day of November, 2006, by and between
RESOURCE AMERICA, INC., a Delaware corporation having its principal place of
business at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (“RAI”),
and
XXXXXX X. XXXXXXX (“Xxxxxxx”).
BACKGROUND
A. Since
2001, Xxxxxxx has been an officer of RAI and currently he serves as the Senior
Vice President-Finance and Operations of RAI. From 1997 to 2001, Xxxxxxx was
an
officer of Fidelity Leasing, Inc., a former subsidiary of RAI.
X. Xxxxxxx
and RAI desire to formally set forth the terms, conditions and agreements
regarding Xxxxxxx’x employment as Senior Vice President-Finance and Operations
of RAI.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual promises and
covenants set forth herein, and intending to be legally bound hereby, RAI and
Xxxxxxx hereby agree as follows:
1) Employment.
During
the term of this Agreement, Xxxxxxx shall be employed as the Senior Vice
President-Finance and Operations of RAI.
2) Duties.
Xxxxxxx
shall report to, and accept direction from, the Chief Financial Officer of
RAI
and from the Board of Directors of RAI (the “Board”).
Xxxxxxx shall serve RAI diligently, competently and to the best of his
abilities. Xxxxxxx shall devote substantially all of his time and attention
to
the business of RAI and its affiliates, and shall not undertake any other duties
which conflict with these responsibilities. Xxxxxxx shall render such services
as may reasonably be required of him to accomplish the business purposes of
RAI,
and such duties as may be assigned to him from time to time and which are
appropriate for his position at RAI.
3) Term.
Xxxxxxx’x employment hereunder shall commence on the date hereof and continue in
full force and effect for a period of one (1) year, unless sooner terminated
in
accordance with the provisions hereof (the “Term”).
The
Term shall automatically extend each day so that on any day that this Agreement
is in effect, there shall be one (1) year remaining in the Term. Notwithstanding
the foregoing, such automatic extensions shall cease upon RAI’s written notice
to Xxxxxxx of its election to terminate this Agreement at the end of the one
(1)
year period then in effect.
4) Compensation.
a) Base
Compensation.
Xxxxxxx’x compensation during the Term shall be determined by the Board, subject
to the next sentence and Section 4b).
During
the initial year
of
the
Term, RAI shall pay to Xxxxxxx “Base
Compensation”
initially in an amount equal to Two Hundred Thousand Dollars ($200,000.00)
per
annum (the “Initial
Level”).
Xxxxxxx’x Base Compensation will be payable in accordance with the general
payroll practices by which RAI pays its executive officers, and the historical
practice of RAI’s compensation of Xxxxxxx. It is understood that RAI, through
the compensation committee of the Board of RAI, will review Xxxxxxx’x
performance on an annual basis and increase or decrease (but in no event
below
the Initial Level) his Base Compensation based upon his
performance.
(b) Incentive
Compensation.
During
the Term, Xxxxxxx may receive incentive compensation in the form of cash bonus
payments, stock option grants, restricted stock grants and other forms of
incentive compensation, based upon Xxxxxxx’x performance.
5) Benefits.
Xxxxxxx
shall be entitled to receive the following benefits from RAI:
a) Participation
in Plans.
Xxxxxxx
shall be entitled to participate in all applicable incentive, savings, and
retirement plans, practices, policies, and programs of RAI and in any group
life, hospitalization or disability insurance plans, and health programs, in
each case to the extent Xxxxxxx is eligible under the terms of such plans or
programs.
b) Disability.
Xxxxxxx
shall be eligible for any short and long term disability and any life insurance
plans or programs that are available to other Senior Vice Presidents of RAI
in
each case to the extent Xxxxxxx is eligible under the terms of such plans or
programs.
c) Reimbursement
of Expenses.
RAI
shall reimburse Xxxxxxx for all reasonable expenses incurred by Xxxxxxx in
the
performance of his duties, including without limitation expenses incurred during
business-related travel. Xxxxxxx shall present to RAI, from time to time, an
itemized account of such expenses in such form as may be required by
RAI.
d) Personal
Time Off.
Xxxxxxx
shall be entitled to a number of days of personal time off work during each
calendar year which shall be no less than the amount set forth in RAI’s company
policies. This includes days used for vacation, illness or other personal
matters but is exclusive of such office holidays as may be designated by
RAI.
6) Termination.
Anything
herein contained to the contrary notwithstanding, Xxxxxxx’x employment hereunder
shall terminate as a result of any of the following events:
a) Xxxxxxx’x
death;
b) Termination
by RAI, for Cause. “Cause”
shall
encompass the following: (i) Xxxxxxx has committed any act of fraud;
(ii)
illegal
conduct or gross misconduct by Xxxxxxx,
in
either case that is willful and results in material and demonstrable damage
to
the business or reputation of RAI or any of its affiliates;
(iii)
Xxxxxxx is
charged with a felony;
(iv)
the
continued
failure of Xxxxxxx
substantially to perform Xxxxxxx’x
duties
under this Agreement (other than as a result of physical or mental illness
or
injury), after RAI delivers to Xxxxxxx
a
written demand for substantial performance that specifically identifies, with
reasonable opportunity to cure, the manner in which RAI believes that
Xxxxxxx
has not
substantially performed his duties; or (v) Xxxxxxx has failed to follow
reasonable written directions of RAI which are consistent with his duties
hereunder and not in violation of applicable law, provided Xxxxxxx shall have
ten business days after written notice to cure such failure;
c) Termination
by RAI without Cause, upon thirty (30) days prior written notice to
Xxxxxxx;
d) Xxxxxxx
becomes disabled by reason of physical or mental disability for more than one
hundred eighty (180) days in the aggregate or a period of ninety (90)
consecutive days during any 365-day period and the Board determines, in good
faith and in writing, that Xxxxxxx, by reason of such physical or mental
disability, is rendered unable to perform his duties and services hereunder
(a
“Disability”).
A
termination of Xxxxxxx’x employment by RAI for Disability shall be communicated
to Xxxxxxx by written notice, and shall be effective on the thirtieth
(30th)
day
after receipt of such notice by Xxxxxxx (the “Disability
Effective Date”),
unless Xxxxxxx returns to full-time performance of his duties before the
Disability Effective Date.
e) A
termination by Xxxxxxx for Good Reason upon thirty (30) days’ prior written
notice to RAI. “Good
Reason”
shall
mean: (i)
any
action by RAI that results in a material diminution in Xxxxxxx’x position,
authority, duties, or responsibilities, other than an isolated, insubstantial,
and inadvertent action that is not taken in bad faith and is remedied by RAI
promptly after receipt of notice thereof from Xxxxxxx; (ii) any purported
termination of Xxxxxxx’x employment by RAI for a reason or in a manner not
expressly permitted by this Agreement; (iii) any failure by RAI to comply
with Section 11(c) of this Agreement; or (iv) any other substantial
breach of this Agreement by RAI that either is not taken in good faith or is
not
remedied by RAI promptly after receipt of notice thereof from
Xxxxxxx;
provided, however, that termination by Xxxxxxx for Good Reason shall be
effective only if such failure has not been cured within thirty (30) days after
notice of such failure has been given to RAI. Except as provided in the
following sentence, a
termination of employment by Xxxxxxx for Good Reason shall be effectuated by
giving RAI written notice of the termination within two (2) months of the event
constituting Good Reason, setting forth in reasonable detail the specific
conduct of RAI that constitutes Good Reason and the specific provision(s) of
this Agreement on which Xxxxxxx relies. In the event of a Change of Control,
Xxxxxxx may terminate his employment by providing such written notice to RAI
for
a period of time commencing on the date such Change of Control occurs and ending
on the date six (6) months thereafter.
(f) A
termination by Xxxxxxx following a Change of Control (as defined below) of
RAI.
(g) Termination
by Xxxxxxx for any reason other than those set forth in Section 6(e) (other
than by such Xxxxxxx’x death or disability) upon 180 day’s prior written notice
to RAI.
(h) The
“Date
of Termination”
means
the date of Xxxxxxx’x death, the Disability Effective Date, the date on which
the termination of Xxxxxxx’x employment by RAI for Cause or without Cause or by
Xxxxxxx for Good Reason is effective, or the date on which Xxxxxxx gives RAI
notice of a termination of employment without Good Reason, as the case may
be;
(i) A
“Change
in Control”
means
the occurrence of any of the following events:
(1) RAI’s
shareholders approve (or, in the event no approval of RAI’s shareholders is
required, RAI consummates) a merger, consolidation, share exchange, division
or
other reorganization or transaction of RAI (a “Fundamental Transaction”) with
any other corporation, other than a Fundamental Transaction which would result
in the voting securities of RAI outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) RAI’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;
(2) the
shareholders of RAI approve a plan of complete, liquidation or winding-up of
RAI
or an agreement for the sale or disposition (in one transaction or a series
of
transactions) of all or substantially all of RAI’s assets;
(3) during
any period of twenty-four consecutive months, less than one-third of the
individuals who at the beginning of such period constituted the Board (including
for this purpose any new director whose election or nomination for election
by
RAI’s shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of such
period) are on the Board at the end of such period.
(4)
neither Xxxxxx X. Xxxxx nor Xxxxxxxx Xxxxx are on the Board; or
(5) Xxxxxxxx
Xxxxx is no longer Chief Executive Officer of the Company.
7. Effect
of Termination.
a. Death.
If
Xxxxxxx’x employment is terminated by reason of Xxxxxxx’x death during the Term,
RAI shall pay to Xxxxxxx’x designated beneficiaries (or, if there is no such
beneficiary, to Xxxxxxx’x estate or legal representative), in a lump sum in cash
within sixty (60) days after the Date of Termination, the sum of the following
amounts: (1) any portion of Xxxxxxx’x Base Compensation through the Date of
Termination that has been earned but not yet been paid; (2) any accrued but
unpaid vacation pay through the Date of Termination; (3) an amount equal to
one
(1) year’s Base Compensation as of the Date of Termination; and (4) an amount
equal to the value of all compensation (excluding stock option grants) received
by Xxxxxxx pursuant to Section 4(b) during the prior year ending on the Date
of
Termination. In the event of termination under this Section 7(a), all other
benefits, payments or
compensation
to be provided to Xxxxxxx hereunder shall terminate and Xxxxxxx’x rights in any
stock option or incentive plans shall be governed solely by the terms of the
applicable plan and grant.
b. Disability.
Upon
the termination of Xxxxxxx’x employment pursuant to Section 6(d) hereof due to
Xxxxxxx’x disability, Xxxxxxx shall be entitled to receive his Base Compensation
and any incentive compensation (excluding stock option grants) pursuant to
Section 4(b) until the expiration of the Term, payable on the dates Xxxxxxx
would have been paid if he was still working for RAI. If Xxxxxxx is terminated
by reason of Disability, Xxxxxxx shall assign to RAI any benefits received
on
account of RAI provided disability insurance for the period in which he is
receiving payments pursuant to this Section 7(b).
c. By
RAI for Cause; By Xxxxxxx Other than for Good Reason.
If
Xxxxxxx’x employment is terminated by RAI for Cause during the Term, RAI shall
pay Xxxxxxx his Base Compensation through the Date of Termination to the extent
earned but not yet paid. If Xxxxxxx voluntarily terminates employment during
the
Term, other than for Good Reason, RAI shall pay Xxxxxxx his Base Compensation
through the Date of Termination to the extent earned but not yet paid. In the
event of termination under this Section 7(c), all other benefits, payments
or
compensation to be provided to Xxxxxxx hereunder shall terminate and the rights
of Xxxxxxx in any stock option or incentive plans shall be governed solely
by
the terms of the applicable plan and grant.
d. By
RAI Other than for Cause, Death or Disability; by Xxxxxxx for Good
Reason.
If,
during the Term, RAI terminates Xxxxxxx’x employment, other than for Cause,
Death or Disability, or Xxxxxxx terminates employment for Good Reason, RAI
shall
pay to Xxxxxxx amounts
equal to Base Compensation as set forth in Section 4(a) as if he had remained
employed by the Company pursuant to this Agreement, for a period of one
year,
payable
at the time when the same would have become due and payable if such termination
had not occurred. The payments and benefits provided pursuant to this Section
7(d) are intended as liquidated damages for a termination of Xxxxxxx’x
employment by RAI other than for Cause or for the actions of RAI leading to
a
termination of Xxxxxxx’x employment by Xxxxxxx for Good Reason, and shall be the
sole and exclusive remedy therefor.
e. Following
a Change of Control.
If,
during the Term, Xxxxxxx terminates his employment following a Change of
Control, or Xxxxxxx’x employment is terminated by RAI’s successor following a
Change of Control, RAI shall pay to Xxxxxxx amounts
equal to compensation and benefits set forth in Sections 4 and 5 as if he had
remained employed by the Company pursuant to this Agreement, through the end
of
the Term,
payable
at the time when the same would have become due and payable if such termination
had not occurred. The incentive compensation paid to Xxxxxxx pursuant to the
foregoing sentence shall be an amount which is not less than the amount of
incentive compensation (excluding stock option grants) Xxxxxxx received in
the
year immediately prior to the Date of Termination. In addition to the foregoing,
any restricted stock of RAI or its affiliates outstanding on the Date of
Termination shall be fully vested as of the Date of Termination and all options
outstanding on the Date of Termination shall be fully vested and exercisable
in
accordance with the terms of the applicable plan and grant. The payments and
benefits provided pursuant to this Section 7(e) are intended as liquidated
damages for a termination of Xxxxxxx’x employment by RAI
other
than for Cause or for the actions of RAI leading to a termination of Xxxxxxx’x
employment by Xxxxxxx for Good Reason, and shall be the sole and exclusive
remedy therefor.
8. Confidential
Information.
All
confidential information or trade secrets which Xxxxxxx may obtain during the
period of employment relating to the business of RAI and its affiliates shall
not be published, disclosed, or made accessible by him to any other person,
firm, or corporation except in the business and for the benefit of RAI and
its
affiliates. The provisions of this Section 8 shall survive the termination
of
this Agreement, but shall not apply to any information which is or becomes
publicly available otherwise than by any breach of this Section 8.
9. Covenant
Not to Solicit.
Xxxxxxx
shall not, during the Term and for a period ending on the date one (1) year
from
the Date of Termination, directly or indirectly through another person or entity
(i) induce or attempt to induce any officer or employee of RAI or its
affiliates to leave the employ of RAI or such affiliate, or in any way interfere
with the relationship between RAI and any of its affiliates and any officer
or
employee thereof, (ii) hire any person who was an officer or employee of
RAI or any of its affiliates within 180 days after such person ceased to be
an
officer or employee of RAI or any of its affiliates or (iii) induce or
attempt to induce any customer, supplier, vendor, licensee, issuer, originator,
investor or other business relation of RAI or any of its affiliates to cease
doing business with RAI or such affiliate or in any way interfere with the
relationship between any such customer, supplier, vendor, licensee, issuer,
originator, investor or business relation and RAI or any of its
affiliates.
10. Remedies
in Case of Breach of Certain Covenants or Termination.
RAI and
Xxxxxxx agree that the damages that may result to RAI from misappropriation
of
confidential information or solicitation as prohibited by Sections 8 and 9
could
be estimated only by conjecture and not by any accurate standard, and,
therefore, any breach by Xxxxxxx of the provisions of such Sections, in addition
to giving rise to monetary damages, will be enjoined.
11. Assignment.
e. This
Agreement is personal to Xxxxxxx and, without the prior written consent of
RAI,
shall not be assignable by Xxxxxxx. This Agreement shall inure to the benefit
of
and be enforceable by Xxxxxxx’x legal representatives.
f. This
Agreement shall inure to the benefit of and be binding upon RAI and its
successors and assigns, and RAI may assign this Agreement to any company in
which RAI has an interest. Xxxxxxx acknowledges and agrees that, if this
Agreement is assigned pursuant to the previous sentence, he will also, if
requested by any affiliate of RAI perform the reasonable duties of a vice
president of finance and operations of any such affiliate.
x. XXX
shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or
assets of RAI expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that RAI would have been required to perform
it if no such succession had taken place. As used in this Agreement, “RAI” shall
mean both RAI as defined above and any such successor that assumes and agrees
to
perform this Agreement, by operation of law or otherwise.
12. Miscellaneous.
h. Severability.
In case
any one or more of the provisions contained herein shall, for any reason, be
held to be invalid, illegal, or unenforceable in any respect such validity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal
or
unenforceable provision(s) had never been contained herein, provided that such
invalid, illegal or unenforceable provision(s) shall first be curtailed, limited
or eliminated only to the extent necessary to remove such invalidity, illegality
or unenforceability with respect to the applicable law as it shall then be
applied.
i. Modification
of Agreement.
This
Agreement shall not be modified by any oral agreement, either expressed or
implied, and all modifications thereof shall be in writing and signed by the
parties hereto.
j. Waiver.
The
waiver of any right under this Agreement by any of the parties hereto shall
not
be construed as a waiver of the same right at a future time or as a waiver
of
any other rights under this Agreement.
k. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the Commonwealth of Pennsylvania, without giving affect to the
principles of conflicts of laws.
l. Notices.
Any
notice to be given pursuant to this Agreement shall be sufficient if in writing
and mailed by certified or registered mail, postage-prepaid, to the addresses
listed below, or to such other address as either party may notify the other
of
in accordance with this Section.
If
to RAI:
Resource
America, Inc.
|
0000
Xxxxxx Xxxxxx
|
|
Xxxxx
0000
|
|
Xxxxxxxxxxxx,
XX 00000
|
|
Attn:
Xxxxxxx X. Xxxxxx
|
If
to Xxxxxxx:
Xxxxxx
X.
Xxxxxxx
0000
Xxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxxxxxxx,
XX 00000
(f) Duplicate
Originals and Counterparts.
This
Agreement may be executed in any number of duplicate originals or counterparts
or facsimile counterparts, each of
such
duplicate original or counterpart or facsimile counterpart shall be deemed
to be
an original and all taken together shall constitute but one and the same
instrument.
IN
WITNESS WHEREOF, the parties hereto have executed or caused to be executed
this
Agreement as of the date first above written.
RESOURCE
AMERICA, INC.
By:____________________________
Name:
Title:
XXXXXX
X.
XXXXXXX
________________________________
