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EXHIBIT 10.27
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as of
January 1, 1996, by and between Angeles Mortgage Investment Trust, a California
business trust (the "Trust"), and Xxxxxx X. Xxxxxxxxx, an individual
("Executive").
This Agreement is made and entered into with reference to the following facts:
Executive is presently employed by the Trust as President and Chief Executive
Officer.
The Board of Trustees and the Executive Committee of the Board of Trustees
(herein referred to as the "Board") and the Compensation Committee of the Board
of Trustees recognize that the Executive's contribution to the successful
restructuring of the Trust's loan portfolio and his day-to-day management of the
Trust's business affairs during the past three (3) years has been substantial in
all material respects. The Trustees consider the Executive's services to be very
important to the successful operation of the Trust. The Board desires to
stabilize management in general and specifically provide for the continued
employment of the Executive and to formalize and make certain changes in
Executive's employment arrangement with the Trust. The Board has determined that
the terms of Executive's employment as herein provided will reinforce and
encourage the continued attention and dedication to the Trust by the Executive,
which is in the best interests of the Trust and its shareholders.
The Executive is willing to commit himself to continue to serve the Trust, on
the terms and conditions herein provided.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the Trust and
Executive agree as follows:
I. EMPLOYMENT.
The Trust hereby employs Executive, and Executive hereby accepts such employment
as President and Chief Executive Officer of the Trust. In such capacity the
Executive shall perform all services or actions necessary or reasonably
advisable for the management and conduct of the business of the Trust which are
appropriate to the position of an executive officer, subject to the terms of the
Trust's Declaration of Trust and any authorization, direction or restriction by
the Board.
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II. TERM.
Subject to the provisions for termination set forth herein, the term of this
Agreement (the "Original Term") shall commence as of the date hereof and shall
continue until December 31, 1997. This Agreement shall be renewed automatically
at the and of each eighteen month period following commencement of the Original
Term and each renewal term for succeeding terms of twenty-four (24) months
(each, a "Renewal Term"), unless either party gives written notice to the other
party at least six (6) months prior to expiration of the Original Term or
Renewal Term (as applicable) of its or his intention not to renew. As used
herein, "Term" shall mean the Original Term or any Renewal Term, whichever is
then in effect.
III. DUTIES.
During the Term, Executive shall perform such duties and have such authority and
responsibilities consistent with his present position as President and Chief
Executive Officer as shall, from time to time, be reasonably delegated or
assigned to him by the Board. Executive shall report directly to the Board.
Executive shall render to the Trust his services specified herein principally at
the present location, or other locations not exceeding 30 miles from the present
location of the Trust's executive offices.
IV. EXCLUSIVITY.
Executive agrees to faithfully and conscientiously serve the Trust, to devote
his full working time, attention and energy to the business of the Trust, its
parent, subsidiaries and affiliated entities, if any (collectively, the
"Affiliates"), and to perform his duties hereunder competently, diligently and
to the best of his abilities. During the Term, Executive's services shall be
rendered exclusively for the Trust or any Affiliate. Notwithstanding the
foregoing, Executive shall be permitted to continue to serve as an officer and
Trustee for Angeles Participating Mortgage Trust ("APART"), including devoting
approximately fifteen (15) hours per month to carry out such responsibilities
for so long as APART's offices are located in its present facilities. APART will
reimburse the Trust for the Trust's employment expenses based on the time spent
by the Executive on APART's business matters.
V. COMPENSATION AND FRINGE BENEFITS.
The Trust shall compensate Executive for his services under this Agreement as
follows:
A. Base Salary. The Trust shall pay Executive, a salary
("Base Salary") at the rate of two hundred seventy-six thousand dollars
($276,000) per annum, in regular installments, consistent with the
Trust's standard payroll practice, said Base Salary is subject to
review on an annual basis.
B. Bonus. The Board may, from year to year, pay to
Executive an annual bonus ("Bonus") in an amount to be determined by
the Board in its sole discretion.
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C. Vacation. Executive shall be entitled to four (4)
weeks per year of paid vacation ("Vacation") during the Term in
addition to legal holidays. Such Vacation shall be taken during a
period mutually and reasonably satisfactory to both the Trust and
Executive.
D. Benefits. The Trust shall provide Executive with
benefits ("Benefits") as the Board may from time to time determine.
Benefits may include, without limitation, automobile allowance, group
insurance plans for medical, dental, life, accident and disability
insurance.
VI. TERMINATION BY TRUST.
A. Termination. The Trust may terminate this Agreement
in its sole discretion by giving written notice to the Executive in
accordance with Section XVI hereof. The post marked date of such
written notice shall be the Termination Date. However, this Agreement
shall automatically terminate in the event of Executive's death or when
any period of disability prevents the Executive from performing his
duties in excess of three (3) consecutive months; provided, however
that if illness or other disability prevents the Executive from
carrying out his duties under this Agreement, he shall not be entitled
to take advantage of this paragraph whenever, in any period of eighteen
(18) consecutive months, the Executive has been unable to work for an
aggregate of four (4) months.
B. Compensation of Executive Upon Termination by the
Trust. If this Agreement is terminated by the Trust pursuant to Section
VI.A. above, the Trust shall continue to pay the Executive as Severance
Pay, (i) his then present Base Salary and Benefits for one (1) year
beyond the Termination Date in accordance with the Trust's normal
payroll practices, (ii) accrued Vacation for that portion of the fiscal
year in which the termination took place during which time the
Executive's services were performed and (iii) the Executive shall also
receive within 120 days of the Termination Date the pro rata portion of
any estimated Bonus to be earned but not yet paid under Section V.B.
above. If the Executive obtains and begins other employment prior to
the end of the Severance Pay period said Severance Pay shall be
discontinued. However, the Executive shall receive no Severance Pay if
he is terminated for Cause. As used herein, "Cause" includes without
limitation:
1. A material breach by the Executive of any of
the terms, conditions or provisions of this Agreement which has not
been cured within ten (10) days after notice of such noncompliance
has been given by the Trust to the Executive;
2. Executive is convicted of, or pleads guilty or
nolo contendere to any felony;
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3. Executive is held liable in any civil action for
fraud, embezzlement, or fraudulent conversion of property;
4. The commission by Executive of any fraudulent
act in connection with the performance of Executive's duties under
this Agreement;
5. The commission by Executive of any act of gross
negligence while acting within the scope of his employment which
adversely affects the Trust.
C. Effect of Termination by the Trust. Notwithstanding
anything to the contrary contained in this Agreement, neither the
expiration nor the termination of this Agreement for any reason shall
affect the ownership by the Trust of the results and proceeds of the
services rendered by Executive hereunder, or alter any of the rights or
privileges of the Trust or any warranty, representation or undertaking
on the part of Executive hereunder.
Any termination under this Section VI shall not be deemed to be an election of
remedy or a waiver by the Trust of any of the Trust's rights or remedies
otherwise available to the Trust at law, in equity or otherwise.
VII. TERMINATION BY EXECUTIVE.
A. Termination. The Executive may terminate this
Agreement at any time in his sole discretion by giving written notice
to the Trust in accordance with Section XVI hereof. The post marked
date of such written notice shall be the Termination Date. Such
termination shall be either voluntary or for Good Reason (as
hereinafter defined). For purposes of this Agreement, termination for
"Good Reason" shall be limited to any one of the following events:
1. A material breach by the Trust of any of the
terms, conditions or provisions of this Agreement which have not
been cured within ten (10) days after notice of such noncompliance
has been given by Executive to the Trust, or
2. Change of Control of the Trust (as hereinafter
defined). For purposes of this Agreement, "Change of Control" of
the Trust shall mean a change in the composition of the Board of
Trustees ("B of T"), such that the Trustees who , as of the date
hereof, constitute the B of T (such B of T shall be hereinafter
referred to as the "Incumbent Board") cease for any reason to
constitute at least a majority of the B of T; provided, however,
that any individual who becomes a member of the B of T subsequent
to the
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date hereof and whose election, or nomination for election by the
Trust's shareholders, was approved by a vote of at least a
majority of those Trustees who are members of the B of T and who
were also Trustees of the Incumbent Board (or deemed to be such
pursuant to the proviso) shall be considered as though such
Trustee were a member of the Incumbent Board; but, provided,
further that any such Trustee whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a 11 or Regulation 14A
promulgated under the Securities Exchange Act of 1934) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the B of T shall not be so
considered as a Trustee of the Incumbent Board, or
3. Accelerated Liquidation of the Trust (as herein
after defined). For purposes of this Agreement, "Accelerated
Liquidation" of the Trust shall have occurred if prior to the
dates set out in Article VIII, Section 8.1(a) of the Declaration
of Trust the shareholders of the Trust, at a special meeting of
shareholders, cast the necessary votes to cause a liquidation,
dissolution, sale or disposition of all or substantially all of
the assets of the Trust or similar liquidating transaction.
B. Compensation of Executive Upon Termination by the
Executive. If the Executive voluntarily terminates this Agreement then
there shall be no Severance Pay. However if the Executive terminates
this Agreement for Good Reason, then:
1. The Trust shall pay Executive his accrued Base
Salary, and prorated Bonus (if any, for the year in which the
termination occurs), accrued Benefits and Vacation through the
Termination Date; and
2. The Trust shall pay Severance Pay, as defined in
Section VI.B. above to the Executive, except that the Severance
Pay period shall be two (2) years. Such payment to be made in
accordance with the Trust's normal payroll practices. If the
Executive obtains and begins other employment prior to the end of
the Severance Pay period said Severance Pay shall be discontinued.
VIII. CONFIDENTIALITY.
Executive shall not disclose to any unrelated third party any of the Trust's
proprietary information regarding the Trust obtained by Executive during his
employment. Upon the termination of Executive's employment with the Trust, and
regardless of the manner in which such termination shall occur, Executive agrees
not to take, without the prior written consent of the Trust, any memoranda,
reports, or other written material or electronically filed, stored or recorded
information
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of any kind. The agreements and covenants of this Section VIII shall survive and
inure to the benefit of the Trust notwithstanding the expiration, termination or
rescission of this Agreement.
IX. REPRESENTATIONS OF EXECUTIVE.
Executive represents and warrants to the Trust that there are no agreements or
arrangements, whether written or oral, which would be breached by Executive upon
execution of this Agreement or which would impair or prevent Executive from
rendering his services to the Trust during the Term.
X. NO SOLICITATION BY EXECUTIVE.
Executive shall not, during any period in which Severance Pay is being paid,
induce or attempt to induce any of the Trust's employees or representatives to
discontinue working for or representing the Trust in order to work for or
represent any of the Trust's competitors. The provisions of this Section X shall
survive the expiration, termination or rescission of this Agreement.
Solicitation during this period would be grounds for ceasing any future
severance payments.
XI. ATTORNEYS' FEES.
If the Executive commences an action against the Trust to enforce any of the
terms in this Agreement, or to obtain damages for any alleged breach of any of
the terms hereof, or for a declaration of rights hereunder, the Trust shall pay
the Executive's reasonable attorneys' fees and costs incurred in connection with
the prosecution of such action, whether or not such action proceeds to
arbitration, trial or appeal.
XII. ASSIGNMENT.
This Agreement is personal to Executive, and Executive's rights and obligations
under this Agreement may not be assigned or transferred by Executive. The Trust
shall have the right to assign its rights and its obligations under this
Agreement to any related or affiliated corporation or other entity that the
Trust may determine.
XIII. EFFECT OF HEADINGS.
The subject headings of the sections of this Agreement are included for purposes
of convenience of reference only, and shall not affect the construction or
interpretation of any of its provisions. Should there be any conflict between
any such headings and the paragraphs at the head of which it appears, the
paragraph and not such heading shall govern and control in the construction of
this Agreement.
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XIV. ENTIRE AGREEMENT; MODIFICATIONS; WAIVER.
This instrument contains the entire Agreement between the parties. It may not be
changed orally, but only by agreement in writing signed by the party against
whom enforcement of any recovery, change, modification or discharge is sought.
XV. COUNTERPARTS.
This Agreement may be executed in one or more separate counterparts, each of
which, when so executed, shall be deemed an original, but all of which together
shall constitute one and the same instrument.
XVI. NOTICE.
Any notices, or other communications relating to this Agreement shall be in
writing and mailed, prepaid to the party concerned at the address indicated, as
follows:
To Executive at:
0000 Xxxxxxx Xxx
Xxxxxxx Xxxxxx, XX 00000
To Trust at:
Angeles Mortgage Investment Trust
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: President and Chief Executive Officer
Any party may change its address for purposes of this Section XVI by giving the
other party written notice of the new address in the manner set forth above.
XVII. PARTIAL INVALIDITY.
If any provision or portion of this Agreement shall be held invalid, inoperative
or unenforceable, then, so far as is reasonable and possible, the remainder of
this Agreement shall be considered valid, operative and enforceable, and effect
shall be given to the intent manifested by the provision or portion held
invalid, inoperative or unenforceable.
XVIII. GOVERNING LAW.
This Agreement shall, in all respects, be construed in accordance with and
governed by the laws of the State of California, without reference to principles
of conflicts of law thereof.
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XIX. FURTHER ASSURANCES.
Each of the parties to this Agreement shall execute and deliver any and all
additional papers, documents, and other assurances, and shall do any and all
acts and things reasonably necessary in connection with the performance of their
obligations hereunder and to carry out the intent of the parties to this
Agreement.
XX. NO OBLIGATION TO THE THIRD PARTIES.
Except for the parties to this Agreement, no person is intended to be a
beneficiary of any provisions of this Agreement and, accordingly, there shall be
no third party beneficiaries of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
ANGELES MORTGAGE INVESTMENT TRUST, a California business trust
By: /s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx, Trustee and Chairman of the Compensation Committee
EXECUTIVE
By: /s/ XXXXXX X. XXXXXXXXX
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Xxxxxx X. Xxxxxxxxx, President and Chief Executive Officer
