Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") effective the 3rd day of January
2001, is entered into by and between Xxxxxxxx X. Xxxxxxxx (the "Executive") and
Annaly Mortgage Management, Inc., a Maryland corporation (the "Company").
The Company desires to establish its right to the continued services of the
Executive, in the capacity described below, on the terms and conditions subject
to the rights of termination hereinafter set for the, and the Executive is
willing to accept such employment on such terms and conditions.
In consideration of the mutual agreements hereinafter set forth, the
Executive and the Company have agreed and do hereby agree as follows:
1. Employment as Corporate Secretary and Senior Vice President of the
Company. The Company does hereby employ, engage and hire the Executive as
Corporate Secretary and Senior Vice President of the Company, and the Executive
does hereby accept and agree to such hiring, engagement and employment. The
Executive's duties as Corporate Secretary and Senior Vice President shall be
such executive and managerial duties as the Board of Directors of the Company
shall from time to time prescribe and as provided in the Bylaws of the Company.
The Executive shall devote such time, energy and skill to the performance of her
duties for the Company and for the benefit of the Company as may be necessary or
required for the effective conduct and operation of the Company's business.
Furthermore, the Executive shall exercise due diligence and care in the
performance of her duties.
2. Term of Agreement. The term ("Term") of this Agreement shall commence as
of January 3, 2001 and shall continue through December 31, 2001. From and after
December 31, 2001, and each anniversary thereafter, the Term of the Agreement
shall be automatically extended for additional successive one-year period
unless, not later than three months prior to December 31, 2001 or any such
anniversary, as applicable, either party shall have given written notice to the
other that it does not wish to extend the Term of the Agreement.
3. Compensation. (a) Base Salary. The Company shall pay the Executive, and
the Executive agrees to accept from the Company, in payment for her services to
the Company a base salary at the rate determined below ("Base Salary"), payable
in equal biweekly installments or at such time or times as the Executive and
Company shall agree. Base Salary shall (I) equal a per annum amount of 0.10%
times the book value (as defined below) of the Company, (ii) be reviewed
quarterly and upon the raising of additional equity through the placement of
securities, and (iii) be subject to a maximum per annum amount of $125,000. The
Salary Cap can be raised at any time by the Board of Directors of the Company in
its sole discretion. In determining the Base Salary, the "book value" of the
Company shall be the aggregate amounts reported on the Company's balance sheet
prepared in accordance with generally accepted accounting principles as
Stockholder's Equity but excluding and adjustments for valuation reserves (i.e.,
changes in the value of the Company's portfolio of investments as a result of
xxxx-to-market valuation changes), all determined as of the close of business on
the Effective Date and thereafter on the closing date of any placements of
securities resulting in additional equity and on the last day of each fiscal
quarter. In consideration of the cash flow needs of the Company, the Base Salary
can be lowered at management's discretion.
(b) Performance Bonus - Board of Directors Discretion. The Executive shall
be eligible to receive an incentive performance bonus based on a percentage of
her Base Salary. Except as provided in Section 7, any such bonus awarded to the
Executive shall be payable in the amount, in the manner, and at the time
determined by the Company's Board of Directors in its sole and absolute
discretion.
(c) Annual Review. The Board of Directors of the Company shall, at least
annually, review the Executives entire compensation package to determine whether
it continues to meet the Company's compensation objectives. Such annual review
will include a determination of (i) whether to increase the Salary Cap in
accordance with section 3(a) and (ii) the incentive performance bonus to be
awarded in accordance with Section 3(b).
4. Fringe Benefits. The Executive shall be entitled to participate in any
benefit programs adopted from time to time by the Company for the benefit of its
executive employees, and the Executive shall be entitled to receive other fringe
benefits as may be granted to her from time to time be the Company's Board of
Directors.
(a) Benefit Plans. The Executive shall be entitled to participate in any
benefit plans relating to stock options, stock purchases, awards, pension,
thrift, profit sharing, life insurance, medical coverage, education, or other
retirement or employee benefits available to other executive employees of the
Company, subject to any restrictions (including waiting periods) specified in
such plans. The Company shall make commercially reasonable efforts to obtain
medical and disability insurance, and such other forms of insurance as the Board
of Directors shall from time to time determine, for its employees.
(b) Vacation. The Executive shall be entitled to (i) four (4) weeks of paid
vacation per calendar year for the first two years of service to the Company and
(ii) five (5) weeks of paid vacation per calendar year for the next two years of
service to the Company, with such vacation to be scheduled and taken in
accordance with the Company's standard vacation policies. After four years of
service to the Company, the executive shall be entitled to such number of weeks
of paid vacation per calendar year as determine by the Board of Directors of the
Company after review of industry standards, but shall in no event be entitled to
fewer than five weeks of paid vacation per calendar year.
5) Business Expenses. The Company shall reimburse the Executive for any and
all necessary, customary and usual expenses, properly receipted in accordance
with Company policies incurred by Executive on behalf of the Company.
6) Termination of Executive's employment. (a) Death. If the Executive dies
while employed by the Company, her employment shall immediately terminate. The
Company's obligation to pay the Executives Base Salary shall cease as of the
date of the Executive's death. Thereafter, Executive's beneficiaries or her
estate shall receive in accordance with the Company's retirement, insurance and
other applicable programs and plans then in effect.
(a) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness ("Disability"), Executive shall have been absent from
the full-time performance of her duties with the Company for six (6) consecutive
months, and within thirty (30) days after written notice is provided to her by
the Company, she shall not have returned to the full-time performance of her
duties, the Executives employment under this Agreement may be terminated by the
Company for Disability. During any period prior to such termination during which
the Executive is absent from the fill-time performance of her duties with the
Company due to Disability, the Company shall continue to pay the Executive her
Base Salary at the rate in effect at the commencement of such period of
Disability. Subsequent to such termination, the Executive's benefits shall be
determined under the Company's retirement, insurance and other compensation
programs then in effect in accordance with the terms of such programs.
(b) Termination by the Company for Cause. The Company may terminate the
Executives employment under this Agreement for "Cause" at any time prior to
expiration of the Term of the Agreement, only in the event of (i) the
Executive's material breach of this Agreement, including without limitation the
failure to substantially perform the reasonable and lawful duties of her
position for the Company, which breach shall continue for 60 days after notice
thereof by the Company to the Executive, which notice shall specify in detail
the Executive's breach, (ii) acts or omissions constituting recklessness or
willful misconduct on the part of the Executive in respect of her fiduciary
obligations or otherwise relating to the business of the Company, or (iii) the
Executive's conviction for fraud, misappropriation or embezzlement. In the case
of clauses (ii) and (iii), the Executives employment under
this Agreement may be terminated immediately without any advance written notice,
and the Company's obligation to pay the Executive's Base Salary, any bonus and
benefits shall cease as of the termination date.
(c) Termination by the Executive. The Executive may at any time during the
Term of this Agreement terminate her employment hereunder for any reason or no
reason by giving the Company notice in writing not less than one hundred twenty
(120) days in advance of such termination. The Executive shall have no further
obligations to the Company after the effective date of termination, as set forth
in the notice. In the event of termination by the Executive under this
paragraph, the Company will pay only the portion of Base Salary or previously
awarded Bonus unpaid as of the termination date. Benefits which have accrued
and/or vested on the termination date will continue in effect according to their
terms, but no additional accrual or vesting will take place.
7. Compensation Upon Termination by the Company Other Than for Cause. If
the Executive's employment shall be terminated by the Company other than for
Cause, the Executive shall be entitles to the following benefits:
(a) Payment of Unpaid Base Salary. The Company shall immediately pay the
Executive any portion of the Executives Base Salary or previous bonus not paid
prior to the termination date.
(b) Severance Payment. The Company shall pay the Executive an amount (the
"Severance Amount") equal to three times the higher of (i) the Executives
combined Salary Cap and actual bonus compensation for the preceding fiscal year
or (ii) the average for three preceding years of the Executive's combined actual
Base Salary and bonus compensation; provided however, that the Severance Amount
shall not be less than $250,000, nor more than 1% of book value (as defined in
section 3(a)) to the extent of the Severance Amount is greater than $250,000.
The Severance Amount shall be payable 50% within five (5) days after the
termination date and the remaining 50% shall be payable in twelve (12)
consecutive monthly installments beginning on the first day of the month
following the termination date.
(c) Immediate Vesting of Stock Options. The Company shall take all
appropriate action to ensure that all stock options on the Company's stock owned
by the Executive as of the Effective Date and which have not been exercised
prior to the termination date become immediately exercisable by the Executive,
whether or not the right to exercise such stock options would otherwise be
vested in the Executive provided, however, an option that is incentive stock
option (within the meaning of Code Section 422(b)) shall not be exercisable for
the first time in a calendar year to the extent that the aggregate fair market
value of stock (as determined under Code Section 422(b)(3)) with respect to
ISO's are exercisable by the Executive during such calendar year exceeds
$100,000. The provisions of this Section 7(c) shall constitute and amendment to
any existing stock option agreements (including award certificates) of the
Company as of the Effective Date. All other stock options owned by the Executive
as of the termination date shall be exercisable in accordance with the Company's
stock option plan and the applicable stock option agreements.
8. Noncompetition Provisions. (a) Noncompetition. The Executive agrees that
during the Term of this Agreement prior to any termination of her employment
hereunder and, in the event of termination of the Executive's employment by the
Company for Cause or voluntary termination of employment by the Executive, for a
period of one year following such termination, she will not, directly or
indirectly, without prior written consent of the Company, manage, operate, join,
control, participate in, or be connected as a stockholder (other than as a
holder of shares publicly traded on a stock exchange or the NASDAQ National
Market System), partner, or other equity holder with, or as an officer, director
or employee of any real estate investment trust whose business strategy is
competitive with that of the Company, as determined be a majority of the
Company's Independent Directors ("Competing REIT"). It is further expressly
agreed that the Company will or would suffer irreparable injury of the Company
in violation of the preceding sentence of this Agreement and that the Company
would by reason of such competition be entitled to injunctive relief in a court
of appropriate jurisdiction, and the Executive further consents and stipulates
to the entry of such injunctive relief in such a court prohibiting the Executive
form competing with
the Company or any subsidiary or affiliate of the Company, in the areas of
business set forth above in violation of this Agreement.
9. Notices. All notices and other communications under this Agreement shall
be in writing and shall be given by fax or first class mail, certified or
registered return receipt requested, and shall be deemed to have been duly given
three (3) days after mailing or twenty-four (24) hours after transmission of a
fax to the respective persons named below:
If to the Company: Xxxxxxx X. X. Xxxxxxx
Chairman and Chief Executive Officer
Annaly Mortgage Management, Inc.
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Executive: Xxxxxxxx Xxxxxxxx
Senior Vice President and Secretary
Annaly Mortgage Management, Inc.
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
10. Attorney's Fees. In the event judicial determination is necessary of
any dispute arising as to the parties' rights and obligations hereunder, each
party shall have the right, in addition to any other relief granted by the
court, to attorney's fees based on a determination by the court of the extent to
which each party has prevailed as to the material issues raised in determination
of the dispute.
11. Termination of Prior Agreements. This Agreement terminates and
supersedes any and all prior agreements and understandings between the parties
with respect to employment or with respect to the compensation of the Executive
by the Company.
12. Assignment: Successors. This Agreement is personal in its nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder; provided that, n
the event of the merger, consolidation, transfer, or sale of all or
substantially all of the assets of the Company with or to any other individual
entity, this Agreement shall, subject to the provisions hereof, be binding upon
and inure to the benefit of such successor and such successor shall discharge
and perform all the promises, covenants, duties, and obligations of the Company
hereunder.
13. Governing Law. This Agreement and the legal relations thus created
between the parties hereto shall be governed by and construed under and in
accordance with laws of the State of New York.
14. Entire Agreement: Headings. This Agreement embodies the entire
agreement of the parties respecting the matters within its scope and may be
modified only in writing. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement.
15. Waiver: Modification. Failure to insist upon strict compliance with any
of the terms, covenants, or conditions hereof shall not be deemed a waiver of
such term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other times. This Agreement shall not be modified in any respect
except by a writing executed by each party hereto.
16. Severability. In the event that a court of competent jurisdiction determines
that any portion of this Agreement is in violation of any statute or public
policy, only the portions of this Agreement that violates such statute or public
policy shall be stricken. All portions of this Agreement that do not violate any
statute or public policy shall continue in full force and effect. Further, any
court order striking any portion of this Agreement shall modify the stricken
terms as narrowly as possible to give as much effect as possible to the
intentions of the parties under this Agreement.
17. Indemnification. The Company shall indemnify and hold Executive
harmless to the maximum extent permitted by Section 2-418 of the Maryland
General Corporations Law or its successor statute.
18. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
19. Successor Sections. References herein to sections or rules of the Code
or Exchange Act shall be deemed to include any successor sections or rules.
20. Arbitration. Any dispute, claim or controversy arising out of or in
relation to this Agreement, which the Executive and the Company are unable to
resolve shall be determined by the decision of a board of arbitration consisting
of three (3) members (the "Board of Arbitration") selected by the American
Arbitration Association upon application made to it for such purpose by other
the Company or the Executive. The arbitration proceedings shall take place in
New York, New York or such other place as shall be agreed to by the parties. The
Board of Arbitration shall reach and render a decision in writing. In connection
with rendering its decision, the Board of Arbitration shall adopt and follow
such rules and procedures as a majority of the members of the Board of
Arbitration deems necessary or appropriate. Any award shall be rendered on the
basis of substantive law governing this Agreement and shall be concurred in by a
majority of the arbitrators. To the extent practical, decisions of the
arbitrators shall be rendered no more than thirty (30) calendar days following
commencement of the arbitration proceedings with respect thereto. Any decision
made by the Board of Arbitration (either prior to or after the expiration of
such thirty (30) calendar day period) shall be final, binding and conclusive on
the Executive and the Company and entitled to be enforced to the fullest extent
permitted by the law and entered in relation thereto, including but not limited
to such party's attorneys' fees, if any, and the expenses and fees of the member
of the Board of Arbitration appointed by such party; provided, however, that the
expenses and the fees of the third member of the Board of Arbitration and any
other expenses of the Board of Arbitration not capable of being attributed to
any one member shall be borne in equal parts by the Executive and the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
exercised by its duly authorized officer, and the Executive has hereto signed
the Agreement as of the date first above written.
ANNALY MORTGAGE MANAGEMENT, INC.
By:_____________________________________
Xxxxxxx X.X. Xxxxxxx
_____________________________________
Xxxxxxxx Xxxxxxxx
