EMPLOYMENT AGREEMENT
Exhibit
10.4
This
Employment Agreement
(“Agreement”) is executed on this 18th
day of June, 2007,
by and between RESOURCE AMERICA, INC., a Delaware corporation having its
principal place of business at Xxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx
Xxxx Xxxxxxxxx Center; 2nd floor,
Xxxxxxxxxxxx, XX 00000 (“RAI”), and XXXXXXX X. XXXXXXX
(“Xxxxxxx”).
BACKGROUND
X. XXX
desires to employ Xxxxxxx and Xxxxxxx desires to be employed by
RAI.
X. Xxxxxxx
and RAI desire to formally set forth the terms, conditions and agreements
regarding Xxxxxxx’ employment as Executive Vice-President.
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 Executive
Vice-President of RAI.
2) Duties. Xxxxxxx
shall report to, and accept direction from, the Chief Executive Officer of
RAI
and from the Chairman of the Board of Directors of RAI. Xxxxxxx shall
serve RAI diligently, competently and to the best of his abilities. Xxxxxxx
shall be required to devote as much of his time and attention to the
business of RAI as is be required to fulfill his duties. It is
recognized that Xxxxxxx in the past has participated, and it is agreed that
Xxxxxxx may in the future may participate in business endeavors separate and
apart from RAI, but that his principal professional endeavor shall be his
service to RAI hereunder.
3) Term. Xxxxxxx’x
employment hereunder shall commence on June 18, 2007 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 of Directors of RAI (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 Three Hundred Fifty Thousand Dollars
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(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 for its senior
officers. 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
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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,
reporting responsibility, 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; (iv) Xxxxxxx shall receive notice
from RAI of termination of this Agreement at the end of the term then in effect
pursuant to the last sentence of paragraph 3 of this Agreement or (v) 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.
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(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.
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(4)
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neither
Xxxxxx X. Xxxxx nor Xxxxxxxx Xxxxx are on the Board;
or
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(5) Xxxxxxxx
Xxxxx is no longer Chief Executive Officer of RAI.
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
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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
Compensation as set forth in Section 4 and 5 as if he had remained employed
by
RAI pursuant to this Agreement, for a period of one year, payable in
Xxxxxxx’x discretion as a lump sum or 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 equity based compensation grants) Xxxxxxx received in the year
immediately prior to the Date of Termination (and if such Date of Termination
shall occur prior to Xxxxxxx receiving any incentive compensation, the incentive
compensation for the purposes of this paragraph will be deemed to be an amount
equal to the Base Compensation). 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 within six (6) months following a Change of Control, or Xxxxxxx’x
employment is terminated by RAI in anticipation of a Change of
Control or within six (6) months following a Change of Control, RAI
shall pay to Xxxxxxx amounts equal
to
compensation and benefits as set forth in Sections 4 and 5 as if he had remained
employed by RAI pursuant to this Agreement, for a period of thirty (30)
months, payable in at the time when the same would
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have
become due and payable if such termination had not occurred, or if the Change
of
Control occurs due to a Fundamental Transaction, at Xxxxxxx’x discretion in a
lump sum upon such termination. 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 (and
if such Date of Termination shall occur prior to Xxxxxxx receiving any incentive
compensation, the incentive compensation for the purposes of this paragraph
will
be deemed to be in an amount equal to the Base Compensation). In the
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. Notwithstanding anything herein
to the contrary, any termination of Xxxxxxx’x employment within one hundred
twenty (120) days prior to a Change of Control (other than for Cause) will
be
deemed to have been in anticipation of such Change of Control.
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.
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11. Assignment.
(a) 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.
(b) 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 of any such affiliate.
(c) RAI
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.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
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If
to
RAI:
Resource
America, Inc.
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0000
Xxxxxx Xxxxxx
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Xxxxx
0000
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Xxxxxxxxxxxx,
XX 00000
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Attn:
Xxxxxxx X. Xxxxxx
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If
to
Xxxxxxx:
Xxxxxxx
X. Xxxxxxx
X.X.
Xxx 000
Xxxxxxxx,
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:____________________________
Xxxxxxx
X. Xxxxxx
SVP,
CLO & Sec.
XXXXXXX
X. XXXXXXX
________________________________
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