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Exhibit 10.47
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement (this "First Amendment")
is entered into as of January 1, 1998 by and between Xxxxxx X. Xxx ("Employee")
and LEAF Asset Management, Inc., an Ohio corporation ("LEAF") and Lexford, Inc.
(formerly known as Cardinal Realty Services, Inc.) ("Employer").
RECITALS:
A. Employee, Employer and LEAF are a party to that certain Employment
Agreement dated as of June 1, 1997 (the "Employment Agreement").
B. Terms which are used but not otherwise defined in this First
Amendment have the meanings given them in the Employment Agreement. The Employer
desires to change Employee's employment from LEAF to Employer, to increase the
Base Compensation of Employee for the remainder of the term, to modify the
provisions relating to the Stock Bonus and Cash Bonus and provide other equity
incentives.
NOW THEREFORE, Employer and Employee agree to amend the Employment
Agreement as provided in this First Amendment:
1. Amendments to Employment Agreement.
(a) From and after the date of this First Amendment, all
references to "Employer" in the Employment Agreement
shall refer to Lexford, Inc. and not LEAF.
(b) From and after the date of this First Amendment, all
references to "CRSI" are deleted and replaced with
"Employer."
(c) Section 1(b) of the Employment Agreement is hereby
amended by deleting the term "Executive Vice
President of Investment Management" and replacing it
with "Executive Vice President and Chief Operating
Officer."
(d) Section 1(b)(ii) of the Employment Agreement is
hereby amended by deleting the term "Chief Investment
Officer" and replacing it with "Chief Operating
Officer."
(e) Sections 1(b) and 1(c) of the Employment Agreement
are hereby amended by deleting the phrase "(including
Employer)" in both sections.
(f) Section 1(c) of the Employment Agreement is further
amended by deleting the phrase "or CRSI" in the
second sentence of section 1(c).
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(g) Section 2(b) of the Employment Agreement is hereby
amended by deleting the clause "the limited liability
company organizational documents of Employer" near
the end of the second sentence and replacing it with
"or other organizational documents of Employer."
(h) Section 3(a) of the Employment Agreement is amended
by adding the following paragraphs:
(v) Notwithstanding the foregoing, the
Employee's Base Compensation from and after
January 1, 1998 shall be Two Hundred Thirty
Thousand ($230,000) annually payable in
equal bi-monthly installments.
(vi) Employee's Base Compensation for fiscal 1998
shall be paid in equal bi-monthly
installments of cash and quarterly
installments of shares of Common Stock as
follows:
(A) Two Hundred Thousand Dollars
($200,000) in cash, and
(B) Thirty Thousand Dollars ($30,000) in
shares of Common Stock of Employer
valued at "Fair Market Value" (as
defined below) on the date of
issuance (i.e., the last day of each
calendar quarter in which Employer's
Common Stock is traded).
(vii) For purposes of this Employment Agreement
"Fair Market Value" shall mean the closing
price of Employer's Common Stock on the
NASDAQ National Market System on the date of
issuance, or if Employer's Common Stock is
not listed or admitted to trading in such
system, the principal securities exchange on
which Employer's Common Stock is listed or
admitted to trading.
(i) Section 3(b) of the Employment Agreement is hereby
deleted in its entirety, and the following section is
substituted therefor:
(b) From and after January 1, 1998 and for so
long as this Employment Agreement remains in
effect, Employer shall pay to Employee bonus
compensation as follows:
(i) For Employer's 1998 fiscal year,
and for each fiscal year thereafter
during which this Employment
Agreement remains in effect,
Employer will pay to Employee a
cash bonus ("Cash Bonus")
determined on the basis of the
increase, if any, of Employer's
"Adjusted EBITDA" (as defined in
Employer's Annual Report on Form
10-K) when compared to Employer's
Adjusted EBITDA for its
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immediately preceding fiscal year,
as reported in Employer's Annual
Report on Form 10-K to be filed
with the Securities and Exchange
Commission ("Comparison EBITDA")
and measured as a percentage of
Comparison EBITDA, as follows:
Adjusted EBITDA expressed Cash Bonus Expressed
as Percentage of Comparison Percentage of Base
EBITDA Compensation
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Up to 103% 0
Greater than 103% up to 110% Percentage Increase in Comparison EBITDA
(above 103%) multiplied by 1.5;
plus, if applicable
Greater than 110% up to 120% Additional Percentage Increase in Comparison
EBITDA (above 110%) multiplied by
2; plus if applicable
Greater than 120%
Additional Percentage Increase in
Comparison EBITDA (above 120%)
multiplied by 2.5, but not to exceed 60%
of Base Compensation
(ii) For purposes of determining the Cash Bonus,
if any, payable to Employee on account of
Employer's 1998 fiscal year, Employee and
Employer agree that Employee's 1998 Base
Compensation will equal Two Hundred and
Thirty Thousand Dollars ($230,000) and the
maximum Cash Bonus payable to Employee on
account of Employer's 1998 fiscal year
equals One Hundred Forty-Four Thousand
Dollars ($144,000).
(iii) Employee's Cash Bonus, if any, due under
this Section 3(b) shall be paid within
thirty (30) days after Adjusted EBITDA is
calculated from the applicable final audited
year end income statements of Employer.
(iv) In addition to the Cash Bonus, for
Employer's 1998 fiscal year, and for each
fiscal year thereafter during which this
Agreement remains
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in effect, Employer shall, and hereby does
grant to Employee a stock bonus ("Stock
Bonus"; and together with the Cash Bonus,
the "Bonus") payable in shares of Employer's
Common Stock (the "Common Stock"), in
accordance with and subject to a Deferred
Shares Award Agreement (the "Deferred Shares
Agreement") to be entered into between
Employer and Employee in customary form
reasonably acceptable to Employer and
Employee. The dollar amount of the Stock
Bonus will be determined on the same basis
as the Cash Bonus (including the limitations
set forth in Section 3(b)(ii) and the
partial-year provision set forth in Section
6(c)), except that the dollar value of the
Stock Bonus as a percentage of Base
Compensation will be as follows:
Adjusted EBITDA expressed Dollar Value of Stock
as a Percentage of Bonus Expressed as
Comparison EBITDA Percentage of Base Compensation
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Up to 103% 0
Greater than 103% up to 105% Equivalent to Percentage Increase in
Comparison EBITDA; plus if applicable
Greater than 105% up to 110% Additional percentage increase in
Comparison EBITDA multiplied by 2, plus
if applicable
Greater that 110% Additional Percentage Increase in
Comparison EBITDA multiplied by 3, but
not to exceed 30% of Base Compensation
(v) The number of shares constituting the Stock
Bonus payable to Employee will be determined
by dividing (A) the dollar value of the
Stock Bonus determined in accordance with
the table above by (B) the closing price of
Employer's Common Stock on the NASDAQ
National Market System, or if Employer's
Common Stock is not listed or admitted to
trading in such system, the principal
securities exchange on which Employer's
Common Stock is listed or admitted to
trading on the last trading date in the
period for which the Stock Bonus is
calculated (i.e. December 31, or the last
closing price for the Common Stock
immediately preceding the date Employee
ceases employment with Employer). Any stock
Bonus which Employee is entitled to receive
from Employer shall be issued on the same
date as the Cash Bonus for the same period.
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No fractional share shall be payable to
Employee in connection with the Stock Bonus,
but Employee will be entitled to a cash
payment equal to the dollar value of any
fractional share to which she would
otherwise be entitled under the Stock Bonus,
to be paid to Employee together with the
payment of Employee's Cash Bonus hereunder.
(j) Section 3(c)(ii) of the Employment Agreement is
hereby amended by deleting subclauses A, B and C in
their entirety and replacing them with the following:
(A) One-half on January 1, 1998,
(B) One-quarter on January 1, 1999, and
(c) One-quarter on January 1, 2000.
(k) Section 3(c) of the Employment Agreement is hereby
amended by deleting Section 3(c)(iii) in its entirety
and renumbering Section 3(c)(iv) to Section
3(c)(iii).
(l) Section 3(f) of the Employment Agreement is hereby
amended by deleting the phrase "(ii) be due and
payable upon the earliest of each sale of any shares
of the Common Stock so pledged (to the extent of the
net proceeds of such sale with any balance remaining
being thereafter due as otherwise provided under this
Section 3(f))" and replacing it with the following:
(iii) be due upon the earliest of three (3) years
from the date of the loan (to the extent of
the proceeds of such sale with any remaining
balance being thereafter due as originally
scheduled)
(m) Section 3 of the Employment Agreement is hereby
further amended by adding the following:
(g) Further, Employer shall, and hereby does,
grant to Employee a right to receive
forty-eight thousand (48,000) shares of
Common Stock (the "Performance Equity
Shares"), subject to the vesting
requirements set forth in that certain
Restricted Shares Agreement dated January 1,
1998 to be entered into between Employer and
Employee, in customary form reasonably
acceptable to Employer and Employee. Such
Restricted Shares Agreement will provide
that the Performance Equity Shares will vest
in three tranches subject to the later of:
(i) Employer's attaining the "Performance
Goals" (as that term is defined in
Employer's 1997 Performance Equity Plan);
and (ii) Employee's continuing employment
with
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Employer or a subsidiary of Employer on
January 1, 1998 (as to a maximum of
one-third of the Performance Equity Shares),
January 1, 1999 (as to a maximum of
two-thirds of the Performance Equity Shares)
and January 1, 2000 (with respect to up to
all of the Performance Equity Shares).
(h) Employer shall issue to The Provident Bank,
a state chartered bank, in its capacity as
Trustee under that certain Executive
Deferred Compensation Rabbi Trust Agreement
dated as of April 18, 1996 (the "Trust
Agreement"), or any successor trustee
thereunder ("Trustee"), for the benefit of
Employee, at no additional consideration or
cost to Employee, up to five thousand
(5,000) shares of the Common Stock for each
share of Common Stock of Employer purchased
by Employee from the date of this Agreement
through and including March 31, 1999 (the
"Matching Stock"). Any Matching Stock which
Trustee is entitled to receive from Employer
shall be issued to Trustee within thirty
(30) days of Employee's purchase of any
shares of Common Stock and shall be subject
to all restrictions and limitations imposed
by applicable state and federal securities
laws and regulations. Notwithstanding the
provisions of Section 3(b)(iv) of this
Agreement, in the event that Employee shall
be entitled to the payment of a Cash Bonus
on account of Employer's 1998 fiscal year,
then, in such event, on or before March 31,
1999 Employee may furnish Employer with her
written election to receive shares of Common
Stock having a fair market value (such fair
market value to be determined in the same
manner as shares of Common Stock issuable to
the Trustee for the benefit of Employee on
account of Employee's Stock Bonus for
Employer's 1998 fiscal year) in an amount
specified by Employee in such written
election in lieu of such Cash Bonus.
Employee may make such an election only on
account of Employer's 1998 fiscal year. Any
shares of Common Stock so issued to the
Trustee for the benefit of Employee on
account of such written election will, in
turn, qualify under this Section 3(h) as
shares of Common Stock purchased by Employee
and, accordingly, the Trustee will be
entitled to receive one share of Matching
Stock on account of each share of Common
Stock issued to Trustee for the benefit of
Employee in lieu of Employee's Cash Bonus in
accordance with the provisions of this
Section 3(h).
(n) Section 4(c) of the Employment Agreement is hereby
amended by deleting the clause "(including Employer)"
in the first and second sentences of such Section.
(o) Section 6(a)(i) of the Employment Agreement is
hereby deleted.
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(p) Section 6(c) of the Employment Agreement is hereby
amended by deleting the clause "(iii) all of her
shares of Restricted Stock and future right to
receive the Fund Incentive Payment awarded pursuant
to Section 3(c)(iii) of this Employment Agreement"
and replace it with the following:
(iii) all of her shares of Restricted Stock and
Performance Equity Shares (;provided,
however, that with respect to shares of
Restricted Stock and Performance Equity
Shares awarded pursuant to Section 3(c)(ii)
and 3(g) Employee's vested right to such
shares shall be limited solely to those
shares which have vested prior to the date
of termination together with those shares
which would have otherwise vested on or
before the January 1 following the date of
termination had Employee remained employed
with Employer).
(q) Section 6(d) of the Employment Agreement is hereby
amended by adding the following clause at the end of
such Section:
Notwithstanding anything contained herein to the
contrary, in the event Employee's Employment
Agreement is terminated by Employee prior to May 31,
2000, then Employee shall be entitled to only those
shares of Restricted Stock and Performance Equity
Shares awarded pursuant to Section 3(c)(ii) and 3(g)
that have vested on or before the January 1
immediately preceding the date of termination.
(r) Section 6(d) of the Employment Agreement is hereby
further amended by deleting "(c)" in the last line of
Section 6(d).
2. Miscellaneous.
(a) Effect of Amendment. Except as specifically provided
herein, this First Amendment does not in any way waive, amend, modify,
affect or impair the terms and conditions of the Employment Agreement,
and all terms and conditions of the Employment Agreement are to remain
in full force and effect unless otherwise specifically amended, waived
or changed pursuant hereto.
On and after the date of this First Amendment, each reference
in the Employment Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Employment Agreement
shall mean and be a reference to the Employment Agreement as heretofore
amended and as further amended by this First Amendment.
This First Amendment constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understandings, representations
or other arrangements, whether express or
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implied, written or oral, of the parties in connection therewith except
to the extent expressly incorporated or specifically referred to
herein.
(b) Counterparts. This First Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute
but one and the same instrument.
(c) Governing Law. This First Amendment shall be governed by,
and shall be construed and enforced in accordance with, the internal
laws of the State of Ohio, without regard to conflicts of laws
principles.
IN WITNESS WHEREOF, Employer and Employee have signed this First
Amendment so as of the date hereinabove provided.
LEAF ASSET MANAGEMENT, INC.
Attest:
/s/ Xxxxxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxxxx, Xx.
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Xxxx X. Xxxxxxxx, Xx., President and
/s/ Xxxxxxx X. Xxx Xxxxx Chief Executive Officer
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/s/ Xxxxxxxxx Xxxxxxx LEXFORD, INC.
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/s/ Xxxxxxx X. Xxx Xxxxx
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By: /s/ Xxxx X. Xxxxxxxx, Xx.
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Xxxx X. Xxxxxxxx, Xx. President and
Chief Executive Officer
/s/ Xxxxxxxxx Xxxxxxx /s/ Xxxxxx X. Xxx
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XXXXXX X. XXX
/s/ Xxxxxxx X. Xxx Xxxxx
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