Exhibit 10.86
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") entered into as of the
1st day of November, 1999 by and between IMC MORTGAGE COMPANY, INC., a Florida
corporation (the "Company"), and XXXXXX X. XXXXXXX ("Executive").
R E C I T A L S:
A. The Company owns and operates a mortgage banking business and
provides related services (the "Business") and is in the process of winding down
the Business;
B. The Company desires to employ Executive in the initial
capacity of President, Chief Operating Officer and Chief Accounting Officer, and
may, at the election of the board of directors of the Company, be employed
hereafter as Chief Executive Officer of the Company (the "Position") and
Executive desires to be employed by the Company in such capacity;
C. Executive has substantial experience and expertise in the
skills required for the Position and the Company has determined that it is in
the best interest of the Company to employ Executive and to utilize his
expertise and experience; and
D. The Company believes that it is in the best interest of the
Company to assure Executive of a secure minimum compensation and to diminish the
inevitable distraction of Executive that may result from concern as to loss of
employment.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained in this Agreement, the parties agree as follows:
1. Recitations. The above recitations are true and correct and
are incorporated herein by this reference.
2. Position of Employment. The Company hereby employs Executive
in the Position commencing as of the Commencement Date (as defined in Section
3.1 herein).
2.1 Performance of Duties. Executive shall perform such
duties as are usually performed by a person serving in the Position with a
business similar in size and scope as the Company and such other additional
duties as may be prescribed from time to time by the Company which are
reasonable and consistent with the Company's operations, taking into account
Executive's expertise and job responsibilities.
2.2 Devotion of Time. During the term of this Agreement,
Executive agrees to devote such of the Executive's business time and attention
to the business and
affairs of the Company to discharge the responsibilities assigned to Executive
and to use best efforts to perform faithfully and efficiently such
responsibilities. The Parties anticipate that Executive's full business time
(subject to duties relating to PFL as described below) will be required for the
first two years, 75% of Executive's business time will be required for the third
year and 50% of Executive's business time required thereafter. The parties
acknowledge that the Executive also provides services for Preferred Mortgages,
Limited, a company in the United Kingdom ("PML") and serves as an officer and
director of PML. The Executive is also compensated by PML unrelated to this
Agreement. Moreover, upon termination of the operations of the Company's
subsidiary, IMCC International, Inc., which the Company anticipates immediately
following the Commencement Date, an entity owned or controlled by the Executive
may enter into consulting or management agreements with PML and be compensated
therefor unrelated to this Agreement.
3. Term of Employment.
3.1 Term of Employment. This Agreement shall begin as of
the effective date of the closing of the purchase by CitiFinancial Mortgage
Company of the Company's mortgage servicing business and loan origination
platform (the "Commencement Date") and end on December 31, 2003; provided,
however, that the term shall thereafter be automaticly renewed for additional
periods of one year each unless either party gives written notice to the other
of intent not to renew no later than one hundred eighty (180) days prior to the
end of the then current term of this Agreement.
3.2 Termination of Employment by the Company for Cause. The
Company may terminate Executive's employment if such termination is for "Cause"
(as defined herein). For the purposes of this Agreement, "Cause" shall be
defined as any of the following:
(a) a default or breach by Executive of any of the
provisions of this Agreement;
(b) actions by Executive constituting fraud,
embezzlement or dishonesty;
(c) actions by Executive in intentionally furnishing
materially false, misleading, or omissive information to the Company or persons
to whom the Executive reports; or
(d) acts or omissions which constitute failure to
follow reasonable and lawful directives of the Company.
3.3 Termination Without Cause. The Company shall have the
right to terminate this Agreement without Cause at any time upon written notice,
subject to payment
by the Company of the Deferred Compensation described in Section 4.2 herein.
3.4 Termination by Executive. Executive may terminate this
Agreement upon thirty (30) days written notice after the occurrence of a
material default of this Agreement by the Company, which default is not cured
within the thirty-day notice period. Such notice shall set forth in reasonable
detail the facts underlying the default. If Executive terminates this Agreement
under this Section 3.4, Executive shall be entitled to the Deferred Compensation
as described in Section 4.2 herein. The Executive may terminate at any time
without cause on thirty days prior written notice, but upon doing so, will be
paid his Base Compensation only through the date of termination and will not
receive any Deferred Compensation if such termination is effective before June
1, 2001, but nevertheless retains the Incentive Compensation.
4. Compensation.
4.1 Salary. In consideration for the services to be
provided by Executive pursuant to this Agreement Company shall pay to Executive
the sum of the following:
(a) Base Salary: As "Base Salary," the annual sums as
follows which amount will automatically increase effective as of each annual
anniversary of the Commencement Date by the "COLA Adjustment" (as defined
below):
Period Annual Base Salary
------ ------------------
Commencement to Dec. 31, 2001 $250,000
Jan, 1, 2002 - Dec. 31, 2002 $187,500
Jan. 1, 2003 - Thereafter $125,000
as that amount in increased from time to time in the sole discretion of the
Company. Base Salary shall be payable in installments consistent with the
Company's normal payroll schedule, in effect from time to time, subject to
applicable withholding and other taxes;
"COLA Adjustment" means an annual increase equal to the
percentage increase, if any, of the consumer price index for Urban Wage Earning
and Clerical Workers (Greater Metropolitan Tampa Area, all items) issued by the
Bureau of Labor Statistics of the U.S. Department of Labor using the year 1967
as a base of 100 (the "Index") from the prior year using the Commencement Date
as the anniversary date for such calculation. In the event the Index ceases to
be published during the term of this Agreement or any extension thereof, the
parties shall use a mutually acceptable comparable statistical index on the cost
of living in the United States as shall then be computed and published by an
agency of the United States.
(b) Quarterly Bonus Compensation. As "Quarterly Bonus
Compensation" the following amounts paid (if Executive is still employed on the
payment date) at the following times:
Quarterly Bonus Payable
Period Last Day of Each March, June, Sept. & Dec.
------ ------------------------------------------
Jan. 1, 2000 - Dec. 31, 2001 $25,000
Jan. 1, 2002 - Dec. 31, 2002 $18,750
Jan. 1, 2003 - Thereafter $12,500
(c) Incentive Compensation. As "Incentive
Compensation" the "Incentive Percent" (as defined below) of any one or more of
the following whenever such should occur after the date hereof and whether or
not Executive is then still employed hereunder (collectively, the "Common Stock
Payments") (i) all distributions by the Company to all holders of common stock
of the Company, (ii) the amounts paid by a the Company in redemption of its
common stock, and (iii) all amount paid by any single third party (or related
group of third parties) to acquire the company's common stock in a tender offer
or other series of related transactions not in open market transactions. The
Incentive Percent shall be based upon the length of Executive's employment
hereunder as follows:
Termination Occurs Incentive Percent
------------------ -----------------
Before 12/31/00 1.5385%
1/1/01 - 12/31/01 3.0769%
1/1/02 - 12/31/02 4.2308%
1/1/03 - Thereafter 5.0000%
The Incentive Compensation will be calculated at the highest Incentive Percent
to which the Executive is entitled at the time of his termination of employment
regardless of when the event occurs giving rise to the payment of Incentive
Compensation.
4.2 Deferred Compensation.
(a) When Due. Executive (or his estate as the case may
be) shall be entitled to the Deferred Compensation hereto in the event that
Executive's employment is terminated for any of the following ("Deferred
Compensation Events"): (i) death of Executive; (ii) termination by the Company
without cause pursuant to Section 3.3; (iii) termination by Executive upon
default by the Company pursuant to Section 3.4; or (iv) termination by the
Executive effective after June 1, 2001, for any reason or for no reason.
(b) Amount. The Deferred Compensation shall be the
amount ("Base
Deferred Compensation" plus "Quarterly Bonus Compensation") which is equal to
twelve months Base Compensation at the then current rate of Base Compensation
and Quarterly Bonus Compensation due over the ensuing twelve months.
(c) Payment of Deferred Compensation. The Deferred
Compensation shall be paid in immediately available funds within sixty (60) days
following the Deferred Compensation Event.
(C) Sole Remedy. The Executive agrees that the
payment to the Executive of the Deferred Compensation provided herein is the
Executive's sole remedy for any termination of Executive's employment hereunder
prior to the Initial Termination Date regardless of whether or not such
termination was by the company without Cause; provided, however, that such
Deferred Compensation payment will not terminate Executive's rights to receive
any Incentive Compensation to which Executive is thereafter due.
4.3 Additional Benefits.
(a) Vacation. Executive shall be entitled to paid
vacation and paid holidays during each twelve-month period during the term of
this Agreement in accordance with the Company's normal policy in effect from
time to time.
(b) Reimbursement of Expenses. Executive is authorized
to incur reasonable traveling and other expenses in connection with the Business
and in performance of his duties under this Agreement. Executive shall be
reimbursed by the Company for all Business expenses which are reasonably
incurred by Executive. All reimbursable travel expenses shall be in accordance
with the Company's reasonable policies in effect from time to time.
(c) Participation in Executive Benefit Plans.
Executive shall be entitled to participate, subject to eligibility and other
terms generally established by the Board of Directors, in any Executive benefit
plan (including but not limited to life insurance plans, group hospitalization,
health, dental care, which health insurance shall also cover Executive's
dependents) as may be adopted or amended by the Company from time to time and
applicable generally to Executives of the Company in the same level as the
Position.
5. Representation by Executive. Executive hereby represents to
the Company that he is physically and mentally capable of performing his duties
hereunder and he has no knowledge of any present or past physical or mental
condition which would cause him not to be able to perform his duties hereunder.
6. Confidentiality and Non-Disclosure of Information.
6.1 Confidentiality. Executive shall not, during the term
of this
Agreement or at any time thereafter, divulge, furnish or make accessible to
anyone, without the Company's prior written consent, any knowledge or
information with respect to any confidential or secret aspect of the Business
which if disclosed could reasonably be expected to have an adverse affect on the
Business ("Confidential Information").
6.2 Ownership of Information. Executive recognizes that all
Confidential Information and copies or reproductions thereof, relating to the
Company's operations and activities made or received by Executive in the course
of his employment are the exclusive property of the Company and Executive holds
and uses same as trustee for the Company and subject to the Company's sole
control and will deliver same to the Company at the termination of his
employment, or earlier if so requested by the Company in writing. All of such
Confidential Information, which if lost or used by Executive outside the scope
of his employment, could cause irreparable and continuing injury to the
Company's Business for which there may not be an adequate remedy at law.
7. Remedies. Executive hereby acknowledges, covenants and agrees
that in the event of a material default or breach under this Agreement:
7.1 Company may suffer irreparable and continuing damages as
a result of such breach and its remedy at law will be inadequate. Executive
agrees that in the event of a violation or breach of this Agreement, in addition
to any other remedies available to it, Company shall be entitled to an
injunction restraining any such default or any other appropriate decree of
specific performance, with the requirement to prove actual damages or to post
any bond or any other security and to any other equitable relief the court deems
proper; and
7.2 Any and all of Company's remedies described in this
Agreement shall not be exclusive and shall be in addition to any other remedies
which Company may have at law or in equity including, but not limited to, the
right to monetary damages.
8. Indemnity. To induce Executive to accept the Positions
described above as well as any other or additional positions as may be mutually
agreed upon by the Company and Executive, the Company hereby covenants and
agrees with Executive, as follows:
8.1 Definitions. For purposes of this Agreement:
(A) "Affiliate" means any corporation, subsidiary, or
other entity controlled by, controlling or under common control with the Company
which now exists or may hereafter be formed or acquired.
(B) "Expenses" include all expenses actually and
reasonably incurred
with respect to a Proceeding, including, without limitation, fees, expenses and
disbursements of attorneys, accountants, financial consultants and other
professionals.
(C) "Liabilities" means all liabilities, and/or
obligations, including, without limitation, obligations to pay a judgment,
settlement, penalty, fine or tax (including, without limitation, any withholding
or employment tax and any excise tax assessed with respect to the Company, any
Affiliate, any employee benefit plan or any other enterprise as to which
Executive is or was serving in an Official Capacity), together with any
obligation to pay interest thereon.
(D) "Proceeding" includes any threatened, asserted,
pending or completed claim, action, suit or other type of proceeding, whether
civil, criminal, administrative or investigative, whether formal or informal,
including, without limitation, any arbitration or mediation proceeding or other
proceeding for the resolution of any claim or dispute and any privately
conducted negotiations, and including, without limitation, any settlement,
hearing, trial or appeal of any of the foregoing.
(E) "Serving in an Official Capacity" includes (i)
serving as a director, officer, advisor or agent of the Company or any Affiliate
or (ii) serving at the request of the Company or any Affiliate as a director,
officer, advisor or agent of, or in any other capacity for, another corporation,
partnership, joint venture, trust or other enterprise, including any employee
benefit plan.
8.2 Statutory Indemnification. The Company hereby agrees to
indemnify and hold harmless Executive to the fullest extent permitted or
required by the provisions of the laws of Florida and the laws of the state of
Company's formation, if different from Florida and to cause any Affiliate to
indemnify and hold harmless Executive to the fullest extent permitted or
required by the laws of the State of Florida or the laws of its state of
formation (if different from Florida) against any Liability or Expense incurred
by Executive by reason of the fact that he is or was Serving in an Official
Capacity. The Company agrees that such obligation shall be to the fullest extent
required or permitted by any subsequent amendment to any of such provisions of
the Florida Statutes or the laws of its state of formation (if different from
Florida) or by the any other statutory provisions permitting or requiring such
indemnification which are adopted after the date of this Agreement (but in the
case of any amendment or subsequent statutory provisions, only to the extent
that such amendment or provisions permit or require broader or more extensive
indemnification rights than prior thereto).
8.3 Additional Indemnification. Subject only to the
exclusions set forth in this Section 8.3, the Company further agrees to
indemnify and hold harmless and to cause any Affiliate to indemnify and hold
harmless Executive against any and all Liabilities and/or Expenses incurred by
Executive in connection with any Proceeding to which Executive is or was a party
or is threatened to be made a party by reason of the fact that Executive is or
was
Serving in an Official Capacity. Executive shall not be entitled to any
indemnification pursuant to this Section 3 if a judgment or other final
adjudication establishes that any act or omission of Executive was material to
the cause of action so adjudicated and that such act or omission constituted an
act or omission for which Company is prohibited by applicable law from providing
an indemnity.
8.4 Advance of Expenses. The Company shall advance or cause
any Affiliate to advance Expenses incurred by Executive in defending any
Proceeding for which Executive may be entitled to indemnification hereunder,
provided that the Company or any Affiliate shall not be required to advance any
sums for such Expenses if the Board of Directors of the Company or the Board of
Directors or similar managing body of any Affiliate, as the case may be, makes a
preliminary good faith determination that Executive engaged in willful
misconduct or acted with a conscious disregard for the best interests of the
Company or any Affiliate, as the case may be (but no such determination by the
Board of Directors of any Affiliate alone shall have any effect upon the
obligations of the Company under this Agreement without such a determination by
the Board of Directors of the Company). Executive hereby agrees to repay any
such advances of Expenses made hereunder with respect to a matter if Executive
is ultimately found not to be entitled to indemnification hereunder with respect
to such matter.
8.5 Obligations of Company and Affiliate; Separate
Obligations. It is the intention of the parties that Executive be entitled to
indemnification to the broadest possible extent allowed by law. Accordingly, any
ambiguity in this Agreement shall be construed in favor of indemnification.
Furthermore, in the event that applicable law would not permit or require
indemnification as to a Liability or Expense but Florida law would, or vice
versa, or in the event that a Liability or Expense would be indemnifiable under
both laws but the law of one would permit or require broader indemnification
than the other, Executive shall be indemnified pursuant to the law that will
provide maximum indemnification. The obligations of the Company under this
Agreement are separate, independent and primary obligations of the Company, and
may be enforced directly against the Company without any necessity for joining
any Affiliate or any other enterprise as to which Executive is or was Serving in
an Official Capacity, for recovering or seeking to enforce any judgment against
any Affiliate or such other enterprise, or for otherwise seeking to recover from
or out of the assets of any Affiliate or any such other enterprise, whether or
not any Affiliate or any such other enterprise has assets sufficient for such
recovery.
8.6 Notification of Defense of Claim. Promptly after receipt
by Executive of the notice of any Proceeding (including any threat thereof) as
to which Executive may be entitled to indemnification hereunder, Executive shall
notify the Company in writing thereof. Failure to so notify the Company shall
not relieve the Company from any obligation hereunder except to the extent that
it may suffer material prejudice by reason of such failure. With respect to any
such Proceeding as to which Executive notifies the Company thereof:
(A) The Company shall be entitled to participate therein at
its own
expense.
(B) Except as otherwise provided below, the Company shall be
entitled to assume the defense thereof on behalf of Executive, with counsel
satisfactory to Executive, acting reasonably. Executive shall have the right to
employ his own separate counsel in such Proceeding, and the fees, expenses and
disbursements of Executive's own separate counsel incurred after written notice
from the Company to Executive of its assumption of the defense thereof and after
the full assumption of such defense by counsel engaged by the Company and
satisfactory to Executive, acting reasonably, shall be the expense of Executive
except ((1) if the employment of counsel by Executive has been authorized by the
Company, or ((2) if Executive shall have reasonably concluded that there may be
a conflict of interest between Executive and the Company with respect to the
defense of such action, or (iii) if any fees, expenses and disbursements of
Executive's own separate counsel are incurred in connection with familiarizing
or providing assistance to counsel employed by the Company, in which case the
fees, expenses and disbursements of Executive's own separate counsel shall be
paid by the Company. The Company shall not be entitled to assume the defense of
any Proceeding brought by or on behalf of the Company or as to which Executive
shall have made the conclusion provided for in (ii) above.
(C) The Company shall not be obligated to indemnify Executive
under this Agreement for any amounts paid in settlement of any Proceeding
effected without its written consent, not to be unreasonably delayed or
withheld. The Company shall not settle any action or claim in any manner which
would impose any penalty, limitation, Liability or Expense on Executive for
which Executive is not entitled to indemnification hereunder without Executive's
written consent.
8.7 Insurance. The Company shall maintain in force directors
and officers liability insurance in amounts and with coverage substantially the
same as that currently in effect and upon termination of Executive"s employment
hereunder will obtain extended reporting period ("tail coverage") for not less
than an additional three years. Nothing in this Agreement shall be deemed to
require indemnification of Executive to the extent that insurance proceeds under
any policy or policies of insurance carried by the Company, or any other person
or entity are available to satisfy any Liability or Expense incurred by
Executive by reason of the fact that he is or was Serving in an Official
Capacity.
9. Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections, subdivisions, or subparagraphs contained
in this Agreement shall not affect the enforceability of the remaining portions
of this Agreement or any part thereof, all of which are inserted conditionally
on their being legally valid. In the event that one or more of the words,
phrases, sentences, clauses, sections, subdivisions, subparagraphs, or articles
are determined to be unenforceable and if such invalidity shall be caused by the
length of any period of time or the size of any area set forth in any part
hereof, such period of time or such area, or both, shall be considered to be
reduced to a period or area which would cure
such invalidity.
10. Successors and Assigns. This Agreement shall be binding upon
the parties hereto and their successors and assigns; provided, however, that
this Agreement shall be non-assignable by the Executive without the written
consent of the Company, it being understood that the Executive's obligations and
performance of this Agreement are personal in nature.
11. Notice. Any notices or other communications to any party
pursuant to or relating to this Agreement must be in writing and shall be deemed
to have been given or delivered when (i) hand-delivered, (ii) mailed through the
U.S. Postal Service via certified mail, return receipt requested, postage
prepaid, or (iii) delivered through a nationally recognized overnight courier,
to the party at their addresses below:
Company: IMC Mortgage Company
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000-0000
Attn: Member of Board of Directors
Executive: Xx. Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000-0000
or such other address given by such party to the other party at any time
hereafter.
12. Miscellaneous.
12.1 Amendment. No amendment, waiver or modification of this
Agreement or any provisions of this Agreement shall be valid unless in writing
and duly executed by both parties.
12.2 Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, legal
representatives, successors and assigns.
12.3 Waiver. Any waiver by any party of any breach of any
provision of this Agreement shall not be considered as or constitute a
continuing waiver or waiver of any other breach of any provision of this
Agreement. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY OF ANY MATTER ARISING
OUR OF OR RELATING TO THIS AGREEMENT OR THE EMPLOYMENT RELATIONSHIP OF Executive
AND COMPANY.
12.4 Captions. Captions contained in this Agreement are inserted
only as a
matter of convenience or for reference and in no way define, limit, extend, or
describe the scope of this Agreement or the intent of any provisions of this
Agreement.
12.5 Attorneys' Fees. In the event of any litigation arising out
of this Agreement, the prevailing party shall be entitled to recover its
attorneys' fees and costs, including attorneys' fees and costs incurred on
appeal.
12.6 Governing Law. This Agreement shall be governed by the laws
of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
Company:
IMC MORTGAGE COMPANY
By: /s/
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Xxxxxx X. Xxxxxxxxx, President
Executive:
/s/
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Xxxxxx X. Xxxxxxx
Address:
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