Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release ("Separation Agreement")
is made by and between New York Mortgage Trust, Inc., a Maryland Corporation
(the "Company") and Xxxxxxx X. Xxxxxxxxxxxxx, Xx. (the "Executive"). The Company
and the Executive may be referred to collectively herein from time to time as
"the Parties."
WHEREAS, Executive has been employed by the Company pursuant to an
Employment Agreement executed on June 29, 2004 ("Employment Agreement"); and
WHEREAS, in an effort to improve the efficiency and profitability of
Company, the Board of Directors have undertaken to restructure the Company's
management team in a manner that will result in a substantial alteration in the
nature of Executive's responsibilities within the Company; and
WHEREAS, Executive has informed the Company that he wishes to resign
and pursue other career opportunities; and
WHEREAS, the Company wishes to demonstrate its appreciation for
Executive's valuable service and has agreed to treat Executive's resignation as
a resignation for "Good Reason" as provided in Section 6(e) of Executive's
Employment Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Parties agree as follows:
1. Effective Date of Agreement. This Separation Agreement shall become
effective and enforceable ("effective date") on the eighth day after the
date it is executed. Once effective, all of the terms, conditions, benefits
and restrictions of this Settlement Agreement shall be fully enforceable
and binding on the Parties.
2. Termination of Employment.
a. Executive hereby resigns his employment and any positions held with
the Company and its subsidiaries, to include his position on the
Company's Board of Directors, and any other duties and
responsibilities he holds with the Company and its subsidiaries, as of
June 30, 2005. Effective on the date of his resignation,
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Executive will have no duties or responsibilities to be performed for
the Company and its subsidiaries and shall have no authority to act or
endeavor to act on behalf of the Company or its subsidiaries for any
reason. For purposes of this Separation Agreement, Executive's "Date
of Termination" shall be June 30, 2005. \
b. Executive will not receive any compensation or benefits from the
Company after the Date of Termination, except as hereinafter provided
in this Separation Agreement. Executive acknowledges and understands
that some of these benefits are not routinely provided, that they
exceed those provided under existing policies, and that they exceed
those to which he is or otherwise would be entitled, and that they are
given in consideration of his release and waiver of any claim that he
may have against the Company in connection with his employment and
termination of employment, as well as Executive's other agreements as
set forth herein.
3. Consideration to Executive. The Company shall provide Executive the
following:
a. In lieu of the notice and employment provisions of Section 6 of
Executive's Employment Agreement, the Company will pay to
Executive on or before the tenth day following the Date of
Termination the amount of $67,315.00 (Sixty-Seven Thousand, Three
Hundred Fifteen Dollars), said amount representing 60 days of his
current Base Salary as defined in Section 5(a) of Executive's
Employment Agreement.
b. On or before the tenth day following the Date of Termination, the
Company shall pay to Executive the amount of $14,175.00 (Fourteen
Thousand, One Hundred Seventy-Five Dollars), said payment
constituting 1.8 weeks of vacation time that Executive will have
accrued as of the Date of Termination.
c. The Company shall pay the full cost for Executive to participate
in the health insurance plan in which Executive was enrolled
immediately prior to the Date of Termination for a period of
Eighteen (18) months from the Date of Termination, provided that
Executive's continued participation is possible under the general
terms and provisions of such plans and programs. In the event
that the Executive's participation in any such plan or program is
barred, the Company
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shall arrange to provide the Executive with benefits
substantially similar to those which the Executive would
otherwise have been entitled to receive under such plan from
which his continued participation is barred.
d. The Company agrees to carry Directors and Officers insurance
coverage on Executive for a period of Twenty-Four (24) months
from the Date of Termination for his acts and omissions while an
officer and director of the Company on a basis no less favorable
to him than the coverage provided to current officers and
directors.
e. The Company agrees to reimburse Executive for any amounts
otherwise due to him under Section 5(d) (iii) (B) under the
Employment Agreement as well as for business expenses incurred
through the Date of Termination in accordance with Section 5(d)
(viii) of the Employment Agreement.
4. Additional Consideration in Return for Executive's General Release and
Other Agreements. In accordance with the terms of Sections 7(d)(ii) and
(iv) of Executive's Employment Agreement, in return for Executive's waiver
and release of claims and covenant not to xxx provided hereunder in Section
6 and Executive's other agreements as set forth in this Separation
Agreement, the Company agrees to pay to Executive the following additional
consideration:
a. On or before the tenth day following the Date of Termination, the
Company shall pay Executive a lump sum amount of $2,398,500.00
(Two Million, Three Hundred Ninety-Eight Thousand, Five Hundred
Dollars), said payment constituting an amount reached using the
following calculation:
The Executive's Base Salary in effect as of the Date of
Termination, which is $409,500.00 (Four Hundred Nine
Thousand, Five Hundred Dollars), Plus the Executive's
highest Annual Bonus earned in the last three fiscal years,
which was $390,000.00 (Three Hundred Ninety Thousand
Dollars), the total of these two figures then Multiplied By
the whole number three (3).
b. The Company agrees that all stock options, restricted stock
awards and any other equity awards actually granted by the
Company to Executive shall become fully vested, unrestricted and
exercisable as of the Date of Termination. These shares
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are as follows: 95,583 (Ninety-Five Thousand, Five Hundred
Eighty-Three) shares of the Company's common stock, issued to
Executive in accordance with the terms and conditions of Section
5(c)(ii) of Executive's Employment Agreement, of which 53,101
shares have previously vested and the remaining 42,442 shares
shall vest on the effective date of this Separation Agreement.
Unless otherwise agreed to in writing by Executive, the Parties
agree that the Company will satisfy any applicable withholding
obligations by withholding such amount from the amount provided
to Executive in Section 4(a).
5. Additional Payments by the Company.
a. If it is determined (as hereafter provided) that any payment or
distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Separation Agreement,
Executive's Employment Agreement, or otherwise pursuant to or by
reason of any other agreement, policy, plan, program or
arrangement, including without limitation any option, share
appreciation right or similar right, or the lapse or termination
of any restriction on or the vesting or exercisability of any of
the foregoing (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local law, or
any interest or penalties with respect to such excise tax (such
tax or taxes, together with any such interest and penalties, are
hereafter collectively referred to as the "Excise Tax"), then
Executive will be entitled to receive an additional payment or
payments (a "Gross-Up Payment") in an amount such that, after
payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
b. All determinations required to be made under this Section 5,
including whether an Excise Tax is payable by Executive and the
amount of such Excise Tax and whether a Gross-Up Payment is
required and the amount of such Gross-Up
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Payment, will be made by the Company's then current outside
auditors; provided that if that firm is unwilling or unable to
provide such services, another accounting firm may be selected by
the Company (such accounting firm the "Accounting Firm"). The
Company will direct the Accounting Firm to submit its
determination and detailed supporting calculations to both the
Company and Executive within 30 calendar days after the date such
determination may be requested by the Company or Executive. If
the Accounting Firm determines that any Excise Tax is payable by
Executive, the Company will pay the required Gross-Up Payment to
Executive no later than five calendar days prior to the due date
for Executive's income tax return on which the Excise Tax is
included. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it will, at the same time as it makes such
determination, furnish Executive with an opinion that he has
substantial authority not to report any Excise Tax on his
federal, state, local income or other tax return. Any
determination by the Accounting Firm as to the amount of the
Gross-Up Payment will be binding upon the Company and Executive.
As a result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable state or
local tax law at the time of any determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts or fails
to pursue its remedies pursuant to Section 5(f) hereof and
Executive thereafter is required to make a payment of any Excise
Tax, Executive shall so notify the Company, which will direct the
Accounting Firm to determine the amount of the Underpayment that
has occurred and to submit its determination and detailed
supporting calculations to both the Company and Executive as
promptly as possible. Any such Underpayment will be promptly paid
by the Company to, or for the benefit of, Executive within five
business days after receipt of such determination and
calculations.
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c. The Company and Executive will each provide the Accounting Firm
access to and copies of any books, records and documents in the
possession of the Company or Executive, as the case may be,
reasonably requested by the Accounting Firm, and otherwise
cooperate with the Accounting Firm in connection with the
preparation and issuance of the determination contemplated by
Section 5(b) hereof.
d. The federal, state and local income or other tax returns filed by
Executive will be prepared and filed on a consistent basis with
the determination of the Accounting Firm with respect to the
Excise Tax payable by Executive. To the extent the Excise Tax has
not been previously withheld from amounts paid to the Executive,
Executive will make proper payment of the amount of any Excise
Tax, and at the request of the Company, provide to the Company
true and correct copies (with any amendments) of his federal
income tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as filed
with the applicable taxing authority, and such other documents
reasonably requested by the Company, evidencing such payment. If
prior to the filing of Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the
Accounting Firm determines that the amount of the Gross-Up
Payment should be reduced, Executive will within five business
days pay to the Company the amount of such reduction.
e. The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated
by Sections 5(b) and 5(d) hereof will be borne by the Company. If
such fees and expenses are initially advanced by Executive, the
Company will reimburse Executive the full amount of such fees and
expenses within five business days after receipt from Executive
of a statement therefore and reasonable evidence of his payment
thereof.
f. Executive will notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification
will be given as promptly as practicable but no later than ten
(10) business days after Executive actually receives notice of
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such claim and Executive will further apprise the Company of the
nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by
Executive). Executive will not pay such claim prior to the
earlier of (x) the expiration of the 30-calendar-day period
following the date on which he gives such notice to the Company
and (y) the date that any payment of amount with respect to such
claim is due. If the Company notifies Executive in writing prior
to the expiration of such period that it desires to contest such
claim. Executive will:
i. provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
ii. take such action in connection with contesting such
claim as the Company reasonably requests in writing
from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
iii. cooperate with the Company in good faith in order
effectively to contest such claim; and
iv. permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company will bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and will indemnify and
hold harmless Executive, on an after-tax basis, for and
against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 5(f), the Company will control all
proceedings taken in connection with the contest of any
claim contemplated by this Section 12(f) and, at its
sole option. may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided
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that Executive may participate therein at his own cost
and expense) and may, at its option, either direct
Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more
appellate courts, as the Company will determine;
provided, however, that if the Company directs
Executive to pay the tax claimed and xxx for a refund,
the Company will advance the amount of such payment to
Executive on an interest-free basis and will indemnify
and hold Executive harmless, on an after-tax basis,
from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect
to such advance; and provided further, however, that
any extension of the statute of limitations relating to
payment of taxes for the taxable year of Executive with
respect to which the contested amount is claimed to be
due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim will be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and Executive will be entitled to settle or contest, as
the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
g. If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 5(f) hereof, Executive receives any
refund with respect to such claim, Executive will (subject to the
Company's complying with the requirements of Section 5(f))
hereof) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after any
taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 5(f)
hereof, a determination is made that Executive will not be
entitled to any refund with respect to such claim and the Company
does not notify Executive in writing of its intent to contest
such denial or refund prior to the expiration of 30 calendar days
after such determination, then such advance will be forgiven and
will not be required to be repaid and the amount of such advance
will offset, to the extent thereof, the amount of Gross-Up
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Payment required to be paid pursuant to this Section 5. If, after
the receipt by Executive of a Gross-Up Payment but before the
payment by Executive of the Excise Tax, it is determined by the
Accounting Firm that the Excise Tax payable by Executive is less
than the amount originally computed by the Accounting Firm and
consequently that the amount of the Gross-Up Payment is larger
than that required by this Section 5, Executive shall promptly
refund to the Company the amount by which the Gross-Up Payment
initially made to Executive exceeds the Gross-Up Payment required
under this Section 5.
6. Waiver, Release of Claims, and Covenant Not to Xxx.
a. Executive, for himself, his agents, personal representatives,
heirs and assigns, hereby unconditionally releases and forever
discharges the Company and all of its affiliated entities and
subsidiaries, as well as their respective officers, directors,
partners, owners, employees, agents, representatives,
predecessors and successors (collectively "Released Parties")
from all liability for any acts, occurrences or omissions arising
out of or connected in any way with Executive's employment,
prospective employment, or termination of employment by, or
services as a member of the Board of Directors of, the Company
and any of its affiliates or subsidiaries, both as to matters now
known and those discovered hereafter. The foregoing includes, but
is not limited to, any and all claims for monetary relief,
injunctive relief, back pay, fringe benefits, attorney fees,
costs, and employment or reinstatement, that could have been
raised under common law, including wrongful discharge, breach of
any contractual rights, both express or implied, breach of any
covenant of good faith and fair dealing, both express or implied,
any tort, any claim of invasion of privacy, any legal
restrictions on the Released Parties' rights to terminate
employees, and any federal, state, or other governmental statute,
regulation, ordinance, or directive, including but not limited to
Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Fair
Labor Standards Act, the Age Discrimination in Employment Act,
the Employee Retirement Income Security Act, the New York State
Human Rights Law (New York Exec. Laws Section.290 et. seq.), the
New York City Human Rights Law (New York Admin. Codes
Section.8-107
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et. seq.), the Securities Act of 1933, the Securities Exchange
Act of 1934, and state securities laws. Executive covenants not
to xxx the Released Parties with respect to any of the released
claims or potential claims described above. The foregoing release
does not waive or infringe (i) Executive's right to receive
retirement benefits to the extent he is eligible for such
benefits pursuant to the terms of any applicable retirement or
pension program; (ii) any rights to vested stock described in
Section 4(b) hereof, and (iii) any indemnification rights under
the Separation Agreement, Employment Agreement, the Company's
by-laws, or otherwise.
b. The Company hereby unconditionally releases and forever
discharges Executive from all liability for any acts, occurrences
or omissions arising out of or connected in any way with
Executive's employment, prospective employment, or termination of
employment by, or services as a member of the Board of Directors
of, the Company and any of its affiliates or subsidiaries, both
as to matters now known and those discovered hereafter. The
Company covenants not to xxx the Executive with respect to any of
the released claims or potential claims described above.
c. The Parties expressly understand and agree that the waivers,
releases and covenants not to xxx set forth in clauses (a) and
(b) above do not preclude either Party from acting to enforce the
terms, conditions, rights, obligations and requirements of this
Separation Agreement as provided herein.
7. OWBPA Compliance. This Separation Agreement is intended by the parties to
comply with the requirements of the Older Workers Benefits Protection Act
(29 U.S.C. Section.626(f)). To that end the parties acknowledge that (a)
Executive has read and understands the terms of this Separation Agreement
and he accepts them knowingly and voluntarily, (b) the claims released by
Executive pursuant to this Separation Agreement include claims arising
under the Age Discrimination in Employment Act (29 U.S.C. Section.626 et.
seq.), (c) Executive does not waive any of his rights or claims that may
arise after the date this Separation Agreement is
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effective, (d) the consideration provided in Paragraph 4 of this Separation
Agreement in exchange for Executive's release of claims is in addition to
anything of value which Executive is already entitled to receive from the
Company, (e) Executive has been advised in writing to consult with an
attorney prior to signing this Separation Agreement, (f) Executive has been
given a period of up to 21 days in which to consider the terms of this
Separation Agreement, and (g) Executive has a period of 7 days following
the date he signs this Separation Agreement to revoke it, and the
Separation Agreement shall not become effective or enforceable until the
revocation period has expired, as provided for in Section 1 herein.
8. Nondisclosure of Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or
Confidential Information, knowledge or data relating to the Company or any
of its affiliated companies, and their respective businesses, which shall
have been obtained by the Executive during the Executive's employment by
the Company or any of its affiliated companies and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Separation
Agreement). Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. The agreement made in
this Section 8 shall be in addition to, and not in limitation or derogation
of, any obligations otherwise imposed by law upon the Executive in respect
of confidential information of the Company. "Confidential Information," as
used in this Separation Agreement, means any and all confidential
information (whether recorded in documentary form or by electronic or other
means) relating to the business methods, corporate plans, business plans,
strategic plans, employee information (including compensation,
qualifications, and utilization), management systems, finances, existing or
developing business opportunities, processes under development, potential
product applications, or research and development projects of the Company,
or relating to the marketing or sales of any past, present or future
product or service of the Company including, without limitation, sales
techniques, price lists, discount structures, advertising and promotional
material, the names, addresses, telephone numbers and contact names of
customers and potential customers of and suppliers and potential suppliers
to the
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Company, the nature of their business operations, their requirements for
any product or service sold to or purchased by the Company and all
confidential aspects of their business relationship with the Company and
any trade secrets, secret formulae, processes, inventions, designs,
know-how, discoveries, and technical information relating to any past,
present or future product or service of the Company. Confidential
Information also includes any other information to which the Company
attaches an equivalent level of confidentiality or in respect of which it
owes an obligation of confidentiality to any third party, knowledge of
which Executive acquired at any time during his employment by the Company
or any of its affiliated companies and which is not readily ascertainable
to persons not connected with the Company either at all or without
significant expenditure of labor, skill or money. The nondisclosure
obligation set forth in this Paragraph is in addition to Executive's
fiduciary, statutory and other common law duties to maintain the
confidentiality of the Company's Confidential Information and, to the
extent not otherwise provided herein, the Company's trade secrets.
9. Non-Competition. The Company is willing to enter into this Separation
Agreement only on the condition that Executive accept certain
post-employment restrictions with respect to subsequent reemployment.
Executive agrees to and is prepared to accept such conditions as set forth
herein:
a. Executive agrees that, for a period of Twelve (12) months
following the Date of Termination, Executive shall not, directly
or indirectly, as an employee, consultant or otherwise, for
himself or on behalf of or in conjunction with any other person,
persons, company, firm, partnership, corporation, business, group
or other entity (each, a "Person") work for or provide services
regarding any "residential mortgage loan business" (as defined
below) within any state where the Company is doing business or
has plans for commencing business as of the Date of Termination.
Executive's passive ownership of less than five percent (5%) of
the securities of a public company shall not be treated as an
action in competition with the Company.
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b. "Residential mortgage loan business" shall be defined for
purposes of this Separation Agreement as any Person that
satisfies all of the following criteria: (i) is or intends to
elect to be or to reorganize itself as a real estate investment
trust, (REIT); and (ii) originates or intends to originate,
directly or through one or more subsidiaries, residential
mortgage loans for such REIT's portfolio; and (iii) directly
competes with the Company.
c. Executive hereby acknowledges and agrees that his employment with
the Company placed him in a position of trust and confidence with
respect to the business operations, customers, prospects and
personnel of the Company. He agrees that, due to his position and
knowledge, his engaging in any business that competes with the
Company in the residential mortgage loan business will cause the
Company significant and irreparable harm.
10. Non-Solicitation. In consideration of the compensation and benefits
extended to him under this Separation Agreement, Executive agrees that, for
Twelve (12) months following the Date of Termination, the Executive shall
not, for any reason whatsoever, directly or indirectly, for himself or on
behalf of or in conjunction with any other Person with whom Executive works
or is affiliated:
a. solicit and/or hire any Person who is on the Date of Termination,
or has been within six (6) months prior to the Date of
Termination, an employee of the Company or its affiliates;
b. solicit, induce or attempt to induce any Person who is, at the
Date of Termination, or has been within six (6) months prior to
the Date of Termination, an actual customer, client, business
partner, or a prospective customer, client, business partner,
i.e., a customer, client or business partner who is party to a
written proposal (including, with respect to the Company's
borrowers, a mortgage loan application) or letter of intent with
the Company, in each case written less than six (6) months prior
to the Date of Termination of the Company, said entities to
include without limitation the following categories: real estate
developers, borrowers, realtors and acquisition candidates, for
the purpose or with the intent
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of (A) inducing or attempting to induce such Person to cease
doing business with the Company or its affiliates, or (B) in any
way interfering with the relationship between such Person and the
Company or its affiliates; or
c. solicit, induce or attempt to induce any Person who is or that
is, at the time of the Date of Termination, or has been within
six (6) months prior to the Date of Termination, a supplier,
licensee or consultant of, or provider of goods or services to
the Company or its affiliates, for the purpose or with the intent
of (A) inducing or attempting to induce such Person to cease
doing business with the Company or its affiliates or (B) in any
way interfering with the relationship between such Person and the
Company or its affiliates.
11. Acknowledgement of Enforceability of Covenants. It is agreed by the Parties
that the covenants contained in Sections 8, 9 and 10 impose a fair and
reasonable restraint on Executive in light of the activities and business
of the Company on the date of the execution of this Separation Agreement
and the current plans of the Company; but it is also the intent of the
Company and Executive that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the
Company and its affiliates throughout the term of these covenants.
Executive also acknowledges that this restraint will not prevent him from
earning a living in his chosen field of work.
a. In the event any court of competent jurisdiction shall determine
that the scope, time or territorial restrictions set forth herein
are unreasonable, then it is the intention of the Parties that
such restrictions be enforced to the fullest extent that such
court deems reasonable, and the Agreement shall thereby be
reformed to reflect the same.
b. It is specifically agreed that the duration of the period during
which the agreements and covenants of Executive made in Sections
8, 9 and 10 shall be effective shall be computed by excluding
from such computation any time during which Executive is in
violation of any provision of Sections 8, 9 and 10.
c. Notwithstanding any of the foregoing, if any applicable law,
judicial ruling or order shall reduce the time period during
which Executive shall be prohibited
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from engaging in any competitive activity described in Sections
8, 9 and 10 hereof, the period of time for which Executive shall
be prohibited pursuant to Sections 8, 9 and 10 hereof shall be
the maximum time permitted by law.
12. Consultation in Advance of Action. Before Executive engages in any action
which may reasonably be construed as a violation of this Separation
Agreement, or as to which Executive believes the application of the
Separation Agreement is not clear, specifically including the provisions of
Sections 8, 9 and 10 above, Executive, or his attorney, agrees to contact
and confer with the Chairman of the Audit Committee of the Company's Board
of Directors, or his designee, regarding Executive's intended action, to
make a good faith effort to avoid a violation, and to discuss the
availability of alternative courses of action that would not result in a
violation. Both Parties agree to engage in such discussions in good faith.
13. Injunctive and Contractual Relief. Executive understands and agrees that
the covenants contained in Sections 8, 9 and 10 are special, unique and of
an extraordinary character. Because of the difficulty of measuring economic
losses to the Company as a result of a breach of the foregoing covenants,
and because of the immediate and irreparable damage that could be caused to
the Company for which it would have no other adequate remedy, in the event
of any default, breach or threatened breach of these Sections by Executive,
the Company shall be entitled to institute and prosecute proceedings as
provided for in Section 17, and shall be entitled specifically to
injunctive relief and to such other and further relief as may be available
to the Company at law and/or in equity. Executive hereby waives any right
to require the posting of a bond in the event the Company seeks injunctive
and/or other equitable relief to enforce this Separation Agreement. The
rights, obligations and remedies provided in this Section and in Section 17
shall be in addition to, and not in lieu of, any rights, obligations and/or
remedies imposed by applicable law under statutes enforcing the protection
of trade secrets and other proprietary information.
14. Severability. The Parties understand and agree that every Section, and each
subpart, sub-paragraph or provision therein, of this Separation Agreement
is separable, severable and divisible from the rest of the Separation
Agreement. If any Section, subpart, sub-paragraph
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or provision herein is ruled invalid, illegal, unenforceable or void by any
arbitrator, regulatory agency or court of competent jurisdiction, the
Parties understand and agree that the remainder of this Separation
Agreement shall continue to be enforceable to the fullest extent permitted
by law.
15. Choice of Governing Law. The Parties understand and agree that the
validity, interpretation, construction and performance of this Separation
Agreement, as well as the rights of the Parties under this Separation
Agreement, shall be governed in accordance with the laws of the State of
New York, without regard to its conflicts of law principles.
16. Full Integration. This Separation Agreement constitutes the entire
agreement between the parties regarding the resignation of Executive's
employment with the Company. It fully supercedes any and all prior oral or
written representations, communications or agreements between the parties
pertaining to its subject matter. The Parties understand and agree that by
executing this Separation Agreement, the Parties mutually and voluntarily
release one another from each and every of their respective rights and
obligations under the Employment Agreement to the extent said rights and
obligations are not specifically referenced herein. The Parties also
understand and agree that, to the extent any term, right, benefit or
obligation as set forth the in Executive's Employment Agreement is
inconsistent with, or conflicts in any way with any term, right, benefit or
obligation as set forth in this Separation Agreement, the term, right,
benefit or obligation as set forth in this Separation Agreement shall be
controlling and shall supercede Executive's Employment Agreement. The
Parties further acknowledge that no written or oral representations
inconsistent with or additional to the terms and conditions of this
Separation Agreement have been made or reached. Except as provided herein,
the parties further agree that no modification, amendment or waiver of any
of the provisions of this Separation Agreement shall be effective unless
made in writing, specifically referring to this Separation Agreement, and
signed by Executive and the Company.
17. Disputes.
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a. Any dispute or controversy arising under or in connection with
this Separation Agreement shall, at Executive's sole discretion,
be settled exclusively by such judicial remedies as Executive may
seek to pursue or by arbitration conducted before a panel of
three arbitrators in New York, New York, in accordance with the
rules of the American Arbitration Association then in effect.
Judgment may be entered on any arbitrator's award in any court
having jurisdiction. The expenses of arbitration shall be borne
by the Company.
b. Notwithstanding the provisions of Section 17(a.), the Company
shall be entitled to seek any and all relief to which it is
entitled in any court of competent jurisdiction with respect to
any violation or threatened violation by Executive of the
provisions of Sections 8, 9 and 10 of this Separation Agreement.
c. Except as otherwise set forth in Section 17(a.) above, in the
event a Party institutes any proceeding to enforce his or its
legal rights under, or to recover damages for breach by the other
Party of, this Separation Agreement, the prevailing Party shall
be entitled to recover from the other Party any actual expenses
for attorney's fees and disbursements incurred by such prevailing
Party.
18. No Waiver. The Parties acknowledge and agree that the failure to enforce at
any time any of the provisions of this Separation Agreement or to require
at any time performance by any party of any of the provisions hereto shall
in no way be construed as a waiver of such provision or effect the validity
of this Separation Agreement or any part thereof, or the right of each
party thereafter to enforce each and every provision in accordance with the
terms of this Separation Agreement.
19. Assignability. This Separation Agreement is not assignable by Executive but
is assignable by the Company. This Separation Agreement shall be binding
upon and inure to the benefit of the Company and its successors and
assigns.
20. SEC Disclosure Statement. The Parties understand that, in accordance with
federal law and regulation, this Separation Agreement will be filed with
the Securities and Exchange Commission and that the Company will issue a
public disclosure statement addressing the
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circumstances of Executive's resignation from the Company. The Company
agrees that, prior to releasing any such disclosure statement, it will
provide Executive a reasonable opportunity to review said statement and
provide comments to the Company regarding its content. The Company agrees
to consider in good faith any suggestions made by Executive. Executive
understands and agrees that the Company need not obtain Executive's
approval of the content of the disclosure statement and/or consent to its
release prior to releasing said statement.
21. Non-Disclosure of Agreement.
a. The Parties agree that, prior to the filing of the disclosure
statement referenced in Section 20 above, they will keep any and
all matters relating to this Separation Agreement, including its
existence, terms and the negotiations and circumstances which led
to the parties' agreement, secret and confidential such that they
will not disclose such matters to any person or entity at any
time; provided that Executive may disclose such matters to his
attorney and accountant, and the Company may disclose such
matters to any of its affiliated entities, subsidiary and parent
organizations and its corporate affiliates, as well as their
officers, directors, partners, owners, employees, agents,
representatives, predecessors and successors, to the extent such
disclosure is reasonably necessary to effectuate the terms and
conditions of this Separation Agreement. If Executive's spouse
agrees to the same confidentiality obligations and penalties
provided hereunder, he may disclose to her the terms of this
Separation Agreement.
b. The Parties agree that, subsequent to the filing of the
disclosure statement referenced in Section 20 above, they shall
not publicly discuss this Separation Agreement, the circumstances
which led to the Parties' agreements herein, or the circumstances
surrounding the termination of Executive's employment with the
Company, other than to refer to said disclosure statement.
22. Non-Disparagement. The Parties agree that they will not take any action or
make any comments which impugns, defames, disparages, criticizes,
negatively characterizes or casts in an unfavorable light, the other.
Executive's obligation under this Paragraph shall apply to
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the Company and to the Released Parties, including their officers,
directors, management, employees, agents, policies, practices, processes,
or products. Executive agrees not to voluntarily provide assistance or
information to any person or entity pursuing any claim, charge or complaint
against the Company, except that nothing herein shall be interpreted to
limit Executive's right to confer with counsel or to provide truthful
testimony pursuant to subpoena or notice of deposition or as otherwise
required by law.
23. Attorney's Fees. The Company agrees to bear the cost of Executive's actual
and reasonable legal fees and disbursements incurred in connection with his
resignation from the Company in an amount not to exceed $50,000.00 (Fifty
Thousand Dollars). Executive agrees that, as a condition to the Company's
obligation to pay such legal fees and disbursements, he is required to
submit to the Company's legal counsel, Hunton & Xxxxxxxx LLP, no later than
ten (10) days after the effective date of this Separation Agreement, a
detailed invoice of Executive's outside counsel setting forth individual
time entries by attorney and date, attorney billing rates and itemized
disbursements. The Company shall pay such invoice directly to Executive's
counsel no later than ten (10) days after Executive submits said invoice,
but in no event shall the Company be required to pay any such invoice
before the effective date of this Separation Agreement. A determination
whether Executive's legal fees are actual and reasonable shall be made by
the Company's legal counsel prior to any payment to Executive's counsel.
24. Counterparts. This Separation Agreement may be executed in counterparts,
each of which shall be deemed an original for all purposes.
Both Parties have read this Separation Agreement, understand and agree to its
terms and enter into it voluntarily. By signing below, Executive acknowledges
that he is receiving a signed copy of this Separation Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Separation Agreement to
be signed as of the day and year first below written.
New York Mortgage Trust, Inc.
Date: June 30, 2005 /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chairman and Co-Chief
Executive Officer
Date: June 30, 2005 /s/ Xxxxx X. Xxxx
-----------------------------------
By: Xxxxx X. Xxxx
Title: Co-Chief Executive Officer
Date: June 30, 2005 /s/ Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
-----------------------------------
Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
