AGREEMENT
AGREEMENT
THIS
AGREEMENT (the “Agreement”) is made and entered into this 30th day of June,
2009, between BIMINI CAPITAL MANAGEMENT, INC., a Maryland corporation (the
“Company”) and G. Xxxxxx Xxxx IV (“Executive”). This Agreement
replaces and supersedes the Severance Agreement between the Company and the
Executive dated as of December 18, 2008. Certain capitalized terms
used in this Agreement are defined in Section 7.
Background
Outstanding
management of the Company is always essential to advancing the best interests of
the Company and its shareholders. In the event of a threat or
occurrence of a bid to acquire or change control of the Company or to effect a
business combination, it is particularly important that the business of the
Company be continued with a minimum of disruption. The Company
believes that the objective of securing and retaining outstanding management
will be achieved if the Company’s key management employees are given certain
assurances so that they will not be distracted by personal uncertainties and
risks created by such circumstances.
NOW,
THEREFORE, in consideration of the mutual covenants and obligations herein and
the compensation the Company agrees herein to pay to Executive, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
1. Term of
Agreement. The Effective Date of this Agreement is the
day and year first above written. The Term of this Agreement begins
on the Effective Date and ends on June 30, 2012 “The Initial End
Date”. Notwithstanding the preceding sentence (x) the Term of
this Agreement shall be extended for an additional twelve month period (each
such extension giving rise to a new “Extended End Date”, as of each June 30
beginning June 30, 2010 (each such June 30 being a “Renewal Date”), unless the
Company gives Executive written notice, at least ninety days prior to the
applicable Renewal Date, that the Term of this Agreement will not be extended
and (y) the Term of this Agreement shall be extended automatically to the
day preceding the three year anniversary of a Control Change Date if a Control
Change Date occurs during the Term of this Agreement.
2. Right to Receive Termination
Benefits. Executive shall be entitled to receive the
Termination Benefits described in Section 3 if during the Term of this
Agreement (i) the Company
terminates Executive’s employment with the Company without Cause, (ii) Executive
resigns from the employment of the Company and Executive has Good Reason to
resign from the Company., or (iii) if the Executive dies during the Term or the
Executive, by virtue of ill health or other disability, is unable to perform
substantially and continuously the duties assigned to him for more than 180
consecutive or non-consecutive days out of any consecutive 12-month
period. No amounts will be payable under this Agreement unless
Executive’s employment with the Company is terminated as described in the
preceding sentence.
3. Termination Benefits. Upon a
termination of Executive’s employment in accordance with Section 2,
Executive shall be entitled to receive the following Termination
Benefits:
(a) Payment
of any accrued but unpaid salary from the Company through the date that
Executive’s employment terminates.
(b) Payment
of any bonus that has been approved by the Compensation Committee of the Board
(the “Committee”) but which remains unpaid as of Executive’s termination of
employment.
(c) Reimbursement
for any expenses that Executive incurred on behalf of the Company prior to
termination of employment to the extent that such expenses are reimbursable
under the Company’s standard reimbursement policies.
(d) A
severance benefit equal to the amount described in either (i) or (ii) as
applicable.
(i) This
Section 3(d)(i) applies if either (x) the Company terminates
Executive’s employment with the Company without Cause within six months before
or after a Control Change Date or ( y ) Executive resigns from
the employment of the company within six months after a Control Change Date and
Executive has Good Reason to resign from the Company. The severance
benefit payable under this Section 3(d)(i) is equal to three (3) times the
Executive’s Current Cash Compensation. The term “Current Cash
Compensation” means the sum of one year of Executive’s annual base salary from
the Company as in effect on the date Executive’s employment terminates and the
average of the annual cash bonuses paid to Executive for the Company’s two
fiscal years ending before the date Executive’s employment with the Company
terminates; provided that any extraordinary bonuses shall not be considered in
determining Current Cash Compensation. (For this purpose, a bonus is
an “extraordinary bonus” if it is characterized as such in a resolution approved
by the Committee in connection with the payment of the bonus.)
(ii) This
Section 3(d)(ii) applies if Executive’s employment terminates in accordance with
Section 2 but the requirements of Section 3(d)(i) are not
satisfied. The severance benefit payable under this Section 3(d)(ii)
is equal to the Executive’s Current Cash Compensation multiplied by the Quotient
of (a) the number of days between the date that Executive’s employment
terminates and later of the Initial End Date or the Extended End Date and (b)
365.
(e) The
Company shall pay the cost of continued health plan coverage for Executive and
his qualified beneficiaries through the later of the (i) The Initial End
Date or (ii) The Extended End Date.
The
Termination Benefits described in Sections 3(a), 3(b), 3(c), 3(d)(i), and
3(d)(ii) shall be payable in a single cash sum within thirty days after
Executive’s termination of employment; provided, however, that any amount
payable under Section 3(a), 3(b), 3(c), 3(d)(i), or 3(d)(ii) that is subject to
Code Section 409A shall be payable in a single cash sum on the date that is six
months after Executive’s termination of employment.
In
addition to the Termination Benefits described in this Section 3, Executive
also shall be entitled to receive any benefits or payments that Executive is
entitled to receive under any employee benefit plans or other arrangements or
agreements, including by way of example, restricted stock and stock option
awards, that cover Executive. If (and only if) Executive is entitled
to receive the Termination Benefits pursuant to Section 2 hereof, nonvested
restricted stock, stock options and other equity awards will become
automatically vested on the date of Executive’s termination of
employment.
4. Excise Tax
Indemnification. Executive shall be entitled to a payment
under this Agreement if any payment or benefit provided under this Agreement or
any other plan or agreement with the Company constitutes a “parachute payment”
(as defined in Section 280G(b)(2)(A) of the Internal Revenue Code of 1986
(the “Code”), but without regard to Code Section 280G(b)(2)(A)(ii)) and
Executive incurs a liability under Code Section 4999. The amount
payable to Executive under this Section 4 shall be the amount required to
indemnify Executive and hold him harmless from the application of Code Sections
280G and 4999 with respect to benefits, payments, accelerated exercisability and
vesting and other rights under this Agreement or otherwise, and any income,
employment, hospitalization, excise and other taxes attributable to the
indemnification payment. The benefit payable under this
Section 4 shall be calculated and paid not later than the date (or extended
filing date) on which the tax return reflecting liability for the Code
Section 4999 excise tax is required to be filed with the Internal Revenue
Service. To the extent that any other plan or agreement requires that
Executive be indemnified and held harmless from the application of Code Sections
280G and 4999, any such indemnification and the amount required to be paid to
Executive under this Section 4 shall be coordinated so that such
indemnification is paid only once and the Company’s obligations under this
Section 4 shall be satisfied to the extent of any such other payment (and
vice versa). Executive shall be entitled to the benefit described in
Section 4 without regard to whether he becomes entitled to receive the
Termination Benefits described in Section 3.
5. Covenants of the
Executive. Executive acknowledges that (i) the principal
business of the Company (which expressly includes for purposes of this
Section 5 and any related enforcement provisions hereof, its successors and
assigns) is the acquiring, owning and selling of residential mortgage-related
securities and/or debt securities issued or guaranteed by the U.S. government,
U.S. government sponsored or chartered enterprises or U.S. government agencies
(such business herein being referred to as the “Business”); (ii) the
Company is one of a limited number of persons who have developed such a
business; (iii) the Company’s Business is, in part, national in scope; (iv)
Executive’s work for the Company has given and will continue to give him access
to the confidential affairs and proprietary information of the Company; (v) the
covenants and agreements of Executive contained in this Section 5 are
essential to the business and goodwill of the Company; and (vi) the Company
would not have entered into this Agreement but for the covenants and agreements
set forth in this Section 5. Accordingly, the Executive
covenants and agrees that:
(a) During
and after the period of Executive’s employment with the Company and its
affiliates, Executive shall keep secret and retain in strictest confidence, and
shall not use for his benefit or the benefit of others, except in connection
with the business and affairs of the Company and its affiliates, all
confidential matters relating to the Company’s Business and the business of any
of its affiliates learned by Executive heretofore or hereafter directly or
indirectly from the Company or any of its affiliates (the “Confidential Company
Information”); and Executive shall not disclose such Confidential Company
Information to anyone outside of the Company except with the Company’s express
written consent and except for Confidential Company Information which is at the
time of receipt or thereafter becomes publicly known through no wrongful act of
Executive or is received from a third party not under an obligation to keep
such information confidential and without breach of this Agreement.
(b) During
the period commencing on the date hereof and ending one year following the date
upon which Executive shall cease to be an employee of the Company and its
affiliates, (i) Executive shall not, without the Company’s prior written
consent, directly or indirectly, knowingly (x) solicit
or encourage to leave the employment or other service of the Company, or any of
its affiliates, any employee or independent contractor thereof or (y) hire
(on behalf of Executive or any other person or entity) any employee or
independent contractor who has left the employment or other service of the
Company or any of its affiliates within the one-year period which follows the
termination of such employee’s or independent contractor’s employment or other
service with the Company and its affiliates, and (ii) Executive will not,
whether for his own account or for the account of any other person, firm,
corporation or other business organization, intentionally interfere with the
Company’s or any of its affiliates’ relationship with any person who during the
Term of this Agreement is or was a counterparty, investor and/or vendor of the
Company or any of its affiliates.
(c) All
memoranda, notes, lists, records, property and any other tangible product and
documents (and all copies thereof), whether visually perceptible,
machine-readable or otherwise, made, produced or compiled by Executive or made
available to Executive concerning the business of the Company or its affiliates,
(i) shall at all times be the property of the Company (and, as applicable,
any affiliates) and shall be delivered to the Company at any time upon its
request, and (ii) upon Executive’s termination of employment, shall be
immediately returned to the Company (except that in all events Executive may
retain a copy of his contacts list).
6. Company
Remedies. Executive acknowledges and agrees that any breach by
him of any of the provisions of Section 5 (the “Restrictive Covenants”) would
result in irreparable injury and damages for which money damages would not
provide an adequate remedy. Therefore, if Executive breaches, or
threatens to commit a breach of, any of the Restrictive Covenants, the Company
and its affiliates, in addition to, and not in lieu of, any other rights and
remedies available to the Company and its affiliates under law or in equity
(including, without limitation, the recovery of damages), shall be entitled
to the following:
(a) The
Company and its affiliates shall have the right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, including, without limitation, the right to an entry against
Executive of restraining orders and injunctions (preliminary, mandatory,
temporary and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants.
(b) Within
fifteen days after receipt of a written demand from the Company, Executive shall
surrender to the Company, for cancellation without payment or consideration, any
outstanding stock option, stock appreciation right or other equity-based award
that vested under Section 3 on account of a termination of employment
described in Section 2 and that remains outstanding upon receipt of the
Company’s notice. If such stock option, stock appreciation right or
other equity-based award was previously exercised or settled, Executive shall
return, convey or transfer to the Company, within fifteen days after receipt of
the Company’s notice, any cash or shares delivered to Executive upon exercise or
settlement of such award, less any amount paid by Executive to exercise such
award. If any such award was exercised, settled in shares and such
shares are no longer owned by Executive, then Executive shall pay the Company,
in a single cash sum within fifteen days after receipt of the Company’s notice,
an amount equal to the date of disposition fair market value of such shares,
less any amount paid by Executive to exercise the award and acquire the
shares.
7. Certain
Definitions. As used in this Agreement, certain terms have the
definitions set forth below.
(a) Acquiring
Person means that a Person, considered alone or together with all Control
Affiliates and Associates of that Person, is or becomes directly or indirectly
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
securities representing at least fifty percent (50%) of the Company’s then
outstanding securities entitled to vote generally in the election of the
Board.
(b) Associate,
with respect to any Person, is defined in Rule 12b-2 under the Exchange Act;
provided, however, that an Associate shall not include the Company
or a majority-owned affiliate of the Company.
(c) Board means
the Board of Directors of the Company.
(d) Cause
means (i) willful, deliberate and continued failure by Executive (other
than for reason of mental or physical illness) to perform his duties as
established by the Board, or fraud or dishonesty in connection with such duties;
(ii) a material breach by Executive of his fiduciary duties of loyalty or
care to the Company; (iii) conviction of any crime (or upon entering a
plea of guilty or nolo contendere to a charge of any crime) constituting a
felony; (iv) misappropriation of the Company’s funds or property; or (v)
willful, flagrant, deliberate and repeated infractions of material published
policies and regulations of the Company of which Executive has actual
knowledge. No termination for Cause shall be effective unless the
Board makes a Cause determination after notice to the Executive and the
Executive has been provided with the opportunity (with counsel of his choice) to
contest the determination at a meeting of the Board.
(e) Change
in Control means (i) a Person is or becomes an Acquiring Person;
(ii) the closing of a transaction or series of related transactions that
involves the transfer of more than fifty percent (50%) of the Company’s and its
affiliates’ total assets on a consolidated basis, as reported in the Company’s
consolidated financial statements filed with the Securities and Exchange
Commission, to a Person; (iii) the closing of a transaction or series of
related transactions pursuant to which the Company undergoes a merger,
consolidation, or statutory share exchange with a company, regardless of whether
the Company is intended to be the surviving or resulting entity after the
merger, consolidation, or statutory share exchange, other
than a transaction that results in the voting
securities of the Company carrying the right to vote in elections of persons to
the Board outstanding immediately prior to the closing of the transaction
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%) of
the Company’s voting securities carrying the right to vote in elections of
persons to the Board, or such securities of such surviving entity, outstanding
immediately after the closing of such transaction; (iv) the Continuing Directors
cease for any reason to constitute a majority of the Board; (v) holders of the
securities of the Company entitled to vote thereon approve a sale by the Company
of substantially all of the assets of the Company and its affiliates (or, if
such approval is not required by applicable law and is not solicited by the
Company, the commencement of actions to effect such a sale); or (vi) the
Board adopts a resolution to the effect that, in its judgment, as a consequence
of any one or more transactions or events or series of transactions or events, a
Change in Control of the Company has effectively occurred.
(f) Continuing
Director means any member of the Board, while a member of the Board and
(i) who was a member of the Board on the Effective Date or (ii) whose
nomination for or election to the Board was recommended or approved by a
majority of the members of the Board who, on the date of such recommendation or
approval, are Continuing Directors.
(g) Control
Affiliate, with respect to any Person, means an affiliate as defined in
Rule 12b-2 under the Exchange Act.
(h) Control
Change Date means the date on which a Change in Control
occurs. If a Change in Control occurs on account of a series of
transactions or events, the “Control Change Date” is the date of the last of
such transactions or events in the series.
(i) Exchange
Act means the Securities Exchange Act of 1934, as amended.
(j) Good
Reason means Executive’s resignation from the employment of the Company on
account of one or more of the following events:
(i) the
failure by the Board to reelect Executive to Executive’s current position with
the Company;
(ii) a
material diminution by the Board of Executive’s duties, functions and
responsibilities with respect to the Company without Executive’s consent or, if
during the Term of this Agreement, Executive is elected to the Company’s Board
of Directors, the failure of the Company to nominate the Executive for
re-election to the Board when his then existing term is scheduled
to expire.
(iii) the
failure of the Company to permit Executive to exercise such responsibilities as
are consistent with Executive’s positions and are of such a nature as are
usually associated with such offices of a corporation engaged in substantially
the same business as the Company;
(iv) the
Company’s causing Executive to relocate his employment more than fifty (50)
miles from Vero Beach, Florida, without the consent of Executive;
(v) the
Company’s failure to make a payment when due to Executive, after receipt of
written notice of such failure and the Company’s failure to cure such failure
within ten (10) days after receipt of such written notice;
(vi) the
Company’s reduction of Executive’s (A) annual base salary, as such may be
increased from time to time after the date of this Agreement; (B) annual bonus,
such that the aggregate threshold, target, or maximum bonus opportunity for
Executive for a fiscal year is lower than the aggregate threshold, target, or
maximum bonus, respectively, projected for Executive for the immediately
preceding fiscal year; or (C) employee welfare, fringe or pension benefits,
other than reductions determined to be necessary to comply with the Employee
Retirement Income Security Act of 1974, as amended, or to retain the
tax-qualified or tax favored status of the benefit under the Code, which
determination shall be made by the Board in good faith; or
(vii) the
Company or the Board directs Executive to engage in unlawful or unethical
conduct or conduct contrary to the Company’s good business
practices.
(k) Person
means any human being, firm, corporation, partnership, or other
entity. “Person” also includes any human being, firm, corporation,
partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the
Exchange Act. The term “Person” does not include the Company, or any
Related Entity, and the term Person does not include any employee-benefit plan
maintained by the Company or any Related Entity, and any person or entity
organized, appointed, or established by the Company or any Related Entity
for or pursuant to the terms of any such employee-benefit plan, unless the Board
determines that such an employee-benefit plan or such person or entity is a
“Person.”
(l) Related
Entity means any entity that is part of a controlled group of corporations or is
under common control with the Company within the meaning of section 1563(a),
414(b) or 414(c) of the Code.
8. Attorneys’ Fees. The
Company shall bear the costs for any attorneys’ fees and any other
reasonable expenses incurred in enforcing or protecting the rights of Executive
or the Company under this Agreement, including with respect to the resolution of
disputes arising in connection with an interpretation of the
provisions herein. Notwithstanding the foregoing, the Company shall
not be obligated to pay the costs or attorneys' fees incurred by Executive in
pursuing any claim or defense under this Agreement that is found by a court of
competent jurisdiction to have been frivolous or pursued by Executive
in bad faith
9. No
Assignment. Except as required by applicable law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy or similar process or assignment
by operation of law and any attempt to effect any such action shall be null,
void and no effect.
10. Governing Law. This
Agreement shall be governed by the laws of the State of Florida other than its
choice of law provisions to the extent that they would require the application
of the laws of a State other than the State of Florida.
11. Successors. The
Company shall require any successor to all or substantially all of the Company’s
respective business or assets (whether direct or indirect, by purchase, merger,
consolidation or otherwise), to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure
of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Executive to resign from the employ of the Company and to
receive the Termination Benefits and other benefits under this Agreement in the
same amount and on the same terms as Executive would be entitled to hereunder if
he terminated his employment for Good Reason following a Change in
Control. References in this Agreement to the “Company” include the
Company as herein before defined and any successor to the Company’s business,
assets or both which assumes and agrees to perform this Agreement by operation
of law or otherwise.
12. Binding
Agreement. This Agreement shall be binding on and inure to the
benefit of, and be binding on and enforceable by or against Executive and his
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive dies while any
amount remains payable to him hereunder, all such amounts shall be paid in
accordance with the terms of this Agreement to Executive’s devisee, legatee or
other designee or, if there is none, to Executive’s estate.
13. No Employment
Rights. Nothing in this Agreement confers on Executive any
right to continuance of employment by the Company or any
affiliate. Nothing in this Agreement interferes with the right of the
Company or an affiliate to terminate Executive’s employment at any time for any
reason whatsoever, with or without Cause, subject to the requirements of this
Agreement. Nothing in this Agreement restricts the right of Executive
to terminate his employment with the Company and affiliates at any time, for any
reason whatsoever, with or without Good Reason.
14. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together constitute one and the same
instrument.
15. Entire
Agreement. This Agreement expresses the whole and entire
agreement between the parties with reference to the payment of the Termination
Benefits as described in Sections 2 and 3 above and supersedes and replaces any
prior agreement, understanding or arrangement (whether oral or written) by or
between the Company and Executive with respect to the payment of the Termination
Benefits. The provisions of this agreement shall not supersede, modify,
nullify or in any way alter agreements between the parties with respect to any
other matter.
16. Notices. All
notices, requests and other communications to any party under this Agreement
shall be in writing and shall be given to such party at its address set forth
below or such other address as such party may hereafter specify for the purpose
by notice to the other party:
|
|
If
to Executive:
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0000
Xxxxxx Xxxxxx Xxxxxx Xxxxx
|
|
|
Xxxx
Xxxxx, Xxxxxxx 00000
|
|
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If
to the Company:
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0000
Xxxxxxxx Xxxxx
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|
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Xxxx
Xxxxx, Xxxxxxx 00000
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Each
notice, request or other communication shall be effective if (i) given by
mail, seventy-two hours after such communication is deposited in the mails with
first class postage prepaid, address as aforesaid or (ii) if given by any
other means, when delivered at the address specified in this
Section 16.
17. Modification of
Agreement. No waiver or modification of this Agreement shall
be valid unless in writing and duly executed by the party to be charged
therewith. No evidence of any waiver or modification shall be offered
or received in evidence at any proceeding, arbitration or litigation between the
parties unless such waiver or modification is in writing, duly and
executed. The parties agree that this Section 17 may not be
waived except as herein set forth.
18. Recitals. The
Recitals to this Agreement are incorporated herein and shall constitute an
integral part of this Agreement.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.
G. XXXXXX XXXX IV
/s/ G. Xxxxxx Xxxx
IV_________________________
By: /s/ Xxxxxx X.
Cauley_______________________
Name:
Xxxxxx X.
Cauley________________________
Title:
Chairman and Chief Executive
Officer_________
