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EXHIBIT 10.38
MANAGEMENT CONTRACT
THIS MANAGEMENT CONTRACT, effective April 20, 2000, is entered into by
and between Capstead Mortgage Corporation, a Maryland corporation (the
"Company") and Fortress Registered Investment Trust, a Delaware business trust
(the "Trust").
WITNESSETH:
WHEREAS, the Company desires to retain the Trust to provide or cause to
be provided (i) an individual to perform services similar to that of chairman of
the Company's Board of Directors and chief executive officer of the Company (the
"Chairman and CEO") and (ii) such other individuals as necessary to perform
support services for the Chairman and CEO (the "Contract Employees", and
together with the Chairman and CEO, the "Contract Personnel"), to the extent the
Company does not have employees available to perform such services.
NOW THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree as follows:
1. General Services and Duties. (a) Subject to the supervision of the
Company's Board of Directors, the Chairman and CEO shall perform the services
and duties of the office of chairman and chief executive officer set forth in
the Charter and Bylaws of the Company, including, without limitation, the
general and active management of the business of the Company; implementation of
the general directives, plans and policies formulated by the Board of Directors
of the Company; and such duties, responsibilities and authorities as may be
assigned to the office of chairman and chief executive officer by the Board of
Directors of the Company.
(b) Subject to the supervision of the Chairman and CEO and the other
appropriate officers and employees of the Company and to the extent the Company
does not have the necessary employees available, the Contract Employees shall
perform those services necessary to support the services and duties of the
Chairman and CEO.
2. Relationship of Contract Personnel and the Company. Notwithstanding
anything herein to the contrary, nothing in this Contract shall cause or be
deemed to cause an employer/employee relationship between any of the Contract
Personnel and the Company.
3. Appointment of Contract Personnel. Throughout the term of this
Contract, the Trust shall provide or cause to be provided to the Company (i) an
individual to perform the services and duties of the Chairman and CEO, provided
that such individual is approved by a majority of the members of the Board of
Directors of the Company who are not Affiliates (defined below) of the Trust or
any of its Affiliates (the "Independent Directors"), and (ii) such other
Contract Employees as necessary to perform support services for the Chairman and
CEO, to the extent that the Company does not have employees available to perform
such services and the Trust does have such employees. The Company and the Trust
hereby agree that initially the individual to be provided to the Company to
perform the services and duties of Chairman and CEO shall be Mr. Xxxxxx Xxxxx
("Xx. Xxxxx"), a member of an Affiliate of the Trust.
"Affiliate" of another person shall mean any person directly or
indirectly owning, controlling or holding with power to vote, 5% or more of the
outstanding voting securities of such other person; any person 5% or more of
whose outstanding voting securities are directly or indirectly owned, controlled
or held with power to vote by such other person; any person directly or
indirectly controlling, controlled by or under common control with, such other
person; and any officer, director, partner or employee of such
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other person. The term "person" includes a natural person, corporation,
partnership, trust, company or other entity.
4. Confidentiality; Records. The Trust agrees to keep confidential and
shall cause all the Contract Personnel to keep confidential any and all
information obtained from time to time in connection with the services rendered
hereunder and shall not disclose any portion thereof to third parties who are
not officers, directors or partners of the Trust or any Affiliate of the Trust
except with the prior written consent of a majority of the Independent
Directors. Upon any termination of this Contract, the Trust shall deliver and
shall cause all Contract Personnel to deliver to the Company all information,
property, records and documents of the Company, confidential or otherwise, then
in the custody or control of the Trust or any of the Contract Personnel.
5. Compensation. (a) For the period from April 20, 2000 through
December 31, 2000, the Trust shall be entitled to receive, for services provided
by Contract Personnel under this Contract, (i) a fee of $260,416.67 (a prorated
amount based on an annual fee at $375,000) and (ii) a cash incentive bonus of
$130,208.33 based on the Company's performance with respect to the 2000 calendar
year.
(b) For the period January 1, 2001 through December 31, 2001, and
during each subsequent calendar year of this Contract, the Trust shall be
entitled to receive, for services rendered by Contract Personnel under this
Contract, (i) an annual fee of $375,000 and (ii) an annual cash incentive bonus
based on a predetermined formula established by the Independent Directors at the
beginning of each year. The Independent Directors may also provide, in their
sole discretion, long-term, non-cash incentive compensation, which may be in the
form of stock options and/or stock grants.
(c) Any increase in the fees payable under Sections 5(a) and (b) and
any bonus compensation payable under Sections 5(a) and (b) must be approved by
the affirmative vote of a majority of the Independent Directors.
(d) The Trust and the Company hereby agree that any and all
compensation payable to the Trust hereunder shall be payable only as provided in
clause (e) of this Section 5 and under no circumstance shall any of the Contract
Personnel be entitled to any fee, bonus or other compensation (including
director fees) for services rendered under this Contract. The parties
acknowledge that each of the Contract Personnel will be compensated by the Trust
or an Affiliate of the Trust for the services provided hereunder.
(e) Notwithstanding anything herein to the contrary, the Trust and the
Company hereby agree, and the Trust hereby directs, that all compensation due
and owing to the Trust hereunder shall be paid on behalf of the Trust to
Fortress Capital Finance LLC, a Delaware limited liability company and an
Affiliate of the Trust.
(f) Notwithstanding anything herein to the contrary, from and after the
effective date of any termination of this Contract pursuant to the terms hereof,
the Trust shall not be entitled to any compensation for further services
rendered hereunder but shall be entitled to receive all compensation accruing to
the effective date of such termination.
6. Expenses. The Trust shall be responsible for all expenses related to
the execution, delivery and performance of this Contract by the Trust, and the
Company shall be responsible for all expenses related to the execution, delivery
and performance of this Contract by the Company.
7. Term; Termination. (a) This Contract shall continue in force until
December 31, 2000, and thereafter it shall automatically renew on an annual
basis unless the Company, by the affirmative vote
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of a majority of the Independent Directors, or the Trust terminate this Contract
in accordance with clause (b) of this Section 7.
(b) Notwithstanding any other provision herein to the contrary, this
Contract, or any extension hereof, may be terminated (i) immediately for cause,
by either the Company (by an affirmative vote of a majority of the Independent
Directors) or the Trust or, (ii) without cause by either the Company (by an
affirmative vote of a majority of the Independent Directors) or the Trust, upon
30 days' written notice. Cause as provided in (i) above shall include the
termination by the Company if a majority of the Independent Directors do not
approve the individual provided to act as Chairman and CEO pursuant to Section 3
hereof.
8. Assignment. This Contract shall not be assignable by either party
hereto.
9. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing, unless some other method of
giving such notice, report or other communication is accepted by the party to
whom it is given, and shall be given by being delivered at the following
addresses of the parties hereto:
To the Company:
Capstead Mortgage Corporation
8401 N. Central Expressway
Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Executive Vice President - Finance
To the Trust:
Fortress Registered Investment Trust
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Chief Operating Officer
Any party may at any time give notice in writing to the other parties
of a change of its address for the purpose of this Section 9.
10. Amendments. This Contract shall not be amended, changed, modified,
terminated or discharged in whole or in part, and the performance of any
obligation hereunder may not be waived, except upon prior written consent of a
majority of the Independent Directors.
11. Governing Law. The provisions of this Contract shall be governed
by, construed under and interpreted in accordance with the laws of the State of
Texas as at the time in effect.
12. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Contract.
13. Counterparts. This Contract may be executed in any number of
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
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14. Entire Agreement; Superseding Effect. This Contract constitutes the
entire agreement of the parties hereto relating to this Contract and the
services contemplated hereby and supersedes all provisions and concepts
contained in all prior contracts or agreements between the parties hereto with
respect to this Contract and the transactions contemplated hereby, whether oral
or written.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their duly authorized officers as of the day and year first above
written.
CAPSTEAD MORTGAGE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
FORTRESS REGISTERED INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer
