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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of July 2, 1998, by and between CITYSCAPE CORP.,
having an office address at 000 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000
(hereinafter referred to as the "Company") and Xxxxxx X. Xxxxxxxxx residing at
0000 Xxxxxx Xxxx, Xxxxx, XX 00000 (hereinafter referred to as the "Employee").
WITNESSETH:
WHEREAS, the Company desires to hire and retain the Employee as an
employee to perform certain services for the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration the receipt of which is
hereby acknowledged, the Company and the Employee hereby agree as follows:
1. EMPLOYMENT OF EXECUTIVE.
(a) The Company hereby employs the Employee in the capacity
and for the position of Executive Vice President, Operations. Employee hereby
accepts such employment with the Company upon the terms and conditions
hereinafter set forth.
(b) The duties of the Employee shall include responsibility
for Branch Operations (processing; underwriting; closings; funding; and
warehousing) for a combined core home equity and Sav-a-loan operation. These
duties and services shall at all times be subject to the direction, approval and
control of the Company and shall include such other duties as may be assigned by
the Board of Directors of the Company (the "Board") commensurate with the
responsibilities normally associated with Employee's position.
2. SERVICES TO BE RENDERED.
The Employee will devote Employee's full time and efforts to
the business and affairs of the Company and shall not during the term of this
Agreement be engaged in any other businesses; provided that the Employee may
engage in passive investments in businesses in which the Employee does not
participate. The Employee will always use Employee's best efforts to promote the
interests of the Company.
3. TERM.
The term of this Agreement (the "Term") shall commence on May
1, 1998, and shall continue until December 31, 1998, unless (i) extended by the
mutual agreement of the Company and the Employee or (ii) terminated as
hereinafter provided; provided, however, that the Employee is entitled to
terminate his employment (which termination shall be treated as a termination by
the Company without Cause) upon thirty days notice to the Company if the
Company's headquarters move more than twenty-five miles from the Employee's
existing residence.
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4. COMPENSATION: BASE SALARY, BONUSES AND STOCK OPTIONS.
(a) Base Salary.
The Employee shall receive a base salary at a rate of
$250,000 per annum, payable monthly or more frequently in accordance with the
Company's practice as applied to other senior officers.
(b) Bonuses.
(i) As consideration for continued service with the
Company during the remainder of calendar year 1998, the Employee shall be
entitled to receive a Stay Bonus in the total amount of $150,000. Of that sum,
$72,222 shall be received by the Employee in the form of a signing bonus,
payable within forty-eight hours of the date that the Employee executes this
Agreement. So long as the Employee remains actively employed (but not if the
Employee fails to remain employed because of, inter alia, the Company's failure
to continue its operations) through the end of the month to which the payment
relates, the remainder of the Stay Bonus shall be paid in seven installments of
$11,111 with each payment made on the fifth day following the end of the month
to which it relates.
(ii) As additional compensation for services
rendered, the Employee shall be eligible to receive a Bonus for 1998 of up to
$250,000. The Employee's entitlement to $100,000 of this amount shall be
determined by the Board in its discretion. The Employee's entitlement to the
remaining $150,000 of this amount shall be based on the following factors as
evaluated by the Board and compared with goals to be established by the Company
within two months of the execution of this Agreement and disclosed to the
Employee in writing:
- 15% shall be based on achievement of the
Company's volume and product mix goals;
- 10% shall be based on the Company's net
income goals (a function of management
expense targets);
- 35% shall be based on productivity (to be
determined by examining (A) the number of
funded loans per employee and (B) the number
of loans which are funded versus the number
of loan applications received);
- 30% shall be based on quality of work (to be
determined by examining achievement of
quality control results, the percentage of
loan rejections made by investors, and the
percentage of funding department errors);
and
- the remaining 10% shall be based on the
Company's reorganization, automation,
productivity improvement and performance
tracking in funding and warehousing.
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Any bonus for periods following 1998 shall be the subject of separate
discussions.
(c) Stock Options.
Stock options may be awarded to the Employee, subject
to the discretion of, and on terms and conditions determined by, the Board.
5. BENEFITS.
The Employee shall be entitled to participate in the regular
pension, profit sharing, health, disability, and other benefit programs of the
Company in effect from time to time on the same basis that other senior officers
of the Company participate therein. The Employee shall be entitled, for the term
hereof, to annual vacations to be taken in accordance with the policies of the
Company in effect from time to time for senior officers. The Employee shall be
entitled to all vacation which has accrued but remained unused pursuant to this
Agreement or any previous Employment Agreement between the Employee and the
Company. In lieu of taking his vacation, the Employee may elect to receive a
cash payment for any vacation which remains unused upon the termination of this
Agreement.
6. EXPENSES.
The Company shall reimburse the Employee against appropriate
vouchers or other receipts for business expenses reasonably incurred by Employee
in the performance of Employee's duties pursuant to the terms hereof. In
addition, upon the submission of appropriate vouchers or other receipts, the
Company shall reimburse Employee for gas, tolls, and car phone charges. Employee
shall submit vouchers or other receipts once per calendar month and shall be
reimbursed by the Company within thirty days of submission. Expenses shall
further include reimbursement for monthly car payments of $1000.
7. DEATH AND DISABILITY.
The Employee's employment hereunder shall terminate upon his
death. In the event of the total disability of the Employee, the Employee's
employment hereunder may terminate at the option of the Board. For purposes of
this Agreement, "total disability" shall mean the Employee's inability to
perform Employee's regular and customary duties on behalf of the Company for a
period of no less than 120 consecutive days, or any 180 days during any twelve
month period, with such total disability being established by a written
certification submitted by a medical doctor agreed to by the Employee and the
Company. In the absence of agreement, the Company and the Employee shall each
nominate a qualified medical doctor and these two doctors shall select a third
qualified medical doctor, which third doctor shall make the determination as to
total disability. During the aforementioned 120 and 180 day periods, Employee
shall receive his regular salary less any Company provided disability insurance
proceeds Employee may receive. After the termination of these time periods, no
salary will be payable.
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8. CAUSE.
By notice to the Employee, the President of the Company or the
Board may terminate this Agreement for Cause. As used herein, "Cause" shall be
defined as: (a) the refusal or failure by the Employee to carry out specific
directions of the Board of Directors which are of a material nature and
consistent with Employee's position described in Section 1(b), or the refusal or
failure by the Employee to perform a material part of the Employee's duties
hereunder; (b) the commission by the Employee of a breach of any of the
provisions of this Agreement; (c) the commission by the Employee of a fraudulent
or dishonest act in Employee's relations with the Company or any of its
affiliates, or with any customer or business contact of the Company or any of
its affiliates ("dishonest" for these purposes shall mean that Employee
knowingly or recklessly made a material misstatement or omission or took a
material action for Employee's personal benefit); (d) the conviction of the
Employee for a felony or any crime involving an act of moral turpitude; (e) any
act of insubordination or the willful failure to carry out a written directive
of the Board of Directors which does not violate the terms of this Agreement;
(f) any breach under Sections 9 and 11 of this Agreement; or (g) the Employee's
gross incompetence. Notwithstanding the foregoing, no "Cause" for termination
shall be deemed to exist with respect to the Employee's acts described in
clauses (a) or (b) above, unless the Company shall have given written notice to
the Employee specifying the "Cause" with reasonable particularity and, within
ten business days after such notice, Employee shall not have cured or eliminated
the problem or thing giving rise to such "Cause"; provided, however, that (i)
any periodic breach or continual breaching after notice and cure of any
provision of clauses (a) or (b) above, or (ii) a repeated breach after notice
and cure, of any provision of clauses (a) or (b) above, involving the same or
substantially similar actions or conduct, shall be grounds for termination for
cause without any additional notice from the Company. The parties hereto agree
that three separate instances of a breach by the Employee of the provisions of
this Agreement during the Term shall be considered periodic, continual or
repeated and shall constitute "Cause" within the meaning of this Section 8.
9. NON-COMPETITION.
(a) During the Term except if the Employee terminates
Employee's employment hereunder as a result of a Continued Company Breach (as
such term is defined in (c) below) the Employee agrees that Employee will not,
directly or indirectly, enter into or participate (whether as owner, partner,
shareholder, officer, director, salesman, consultant, employee, principal, or in
any other relationship or capacity) in any business operating or providing
services in any State in which the Company or its affiliates are operating or
providing services as of the date of termination which directly or indirectly,
through subsidiaries or otherwise, manages or performs the following business
activities and services: residential and commercial and real estate lending;
servicing loan portfolios and/or mortgage or real estate brokerage services (a
"Competing Entity"); provided that the Employee may own up to one percent of the
outstanding equity securities of any Competing Entity that is subject to the
public reporting requirements of the Securities Exchange Act of 1934.
(b) During the Term and for one year after the termination of
the Employee's employment hereunder, other than a termination by the Company
without Cause or termination by the Employee due to a Continued Company Breach,
and except for a "Permitted Contact" as defined
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below, the Employee shall not, without the prior written consent of the Company,
directly or indirectly, (i) solicit, request, cause or induce any person who is
at the time, or twelve months prior thereto had been, an employee of or a
consultant to the Company to leave the employ of or terminate Employee's
relationship with the Company or (ii) employ, hire, engage or be associated
with, or endeavor to entice away from the Company any such person, or any
customer of the Company or its affiliates or (iii) attempt to limit or interfere
with any business agreement or relationship existing between the Company and/or
its affiliates with a third party.
(c) As used herein, (i) "Continued Company Breach" shall mean,
after the Company has received written notice from the Employee regarding each
such breach and the Company fails to cure each such breach within ten days of
the receipt of such notice, either three separate instances of a material breach
during the Term by the Company of the obligations it owes the Employee pursuant
to Section 1, Section 4 and Section 5 hereof, or two consecutive such instances
pursuant to Section 4 hereof; and (ii) "Permitted Contact" shall mean (a) an
unpersonalized mass mailing to at least 1000 persons, (b) an advertisement in a
periodical of general circulation, or (c) an unsolicited contact of Employee by
any present or current Company employee; provided, however, that Employee shall
have the right to solicit brokers, lenders, title companies, attorneys, and loan
servicers (the "Lending Entities") regardless of whether the Lending Entities
have a business relationship with the Company, so long as such contact does not
constitute an attempt to tortiously interfere with any business agreement or
relationship existing between the Company and/or its affiliates with Lending
Entity.
10. SEVERANCE.
If the Company terminates this Employee's employment without
Cause or Employee terminates his employment due to a Continued Company Breach,
and Employee executes a general release in the Company's customary form, the
Company shall pay to the Employee $100,000 and, for the duration of the Term
hereof, (1) all remaining payments of the Stay Bonus as described in Section
4(b)(i), and (2) Employee's Bonus, to the extent earned, as described in Section
4(b)(ii). In addition, if the conditions described in this Section are
satisfied, the Company shall make payments to cause Employee's health insurance
to remain in effect for the duration of the Term of this Agreement and for six
months thereafter. Upon making such payments and any other accrued salary or
expenses, Company shall have no further obligation to Employee hereunder. In the
event of a termination under this Agreement by the Company for Cause as defined
in Section 8 or by Employee for any reason except Continued Company Breach as
defined in Section 9(c), all salary and benefits shall cease as of the date of
termination, provided that all accrued salary, bonus and expenses shall be paid
to Employee or Employee's estate or legal representative as the case may be.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) The Employee acknowledges that as a result of Employee's
employment by the Company, the Employee, both during and after the Term, will
obtain secret and confidential information concerning the business of the
Company and its affiliates, including, without limitation, financial
information, trade secrets, information concerning the operations, sales,
personnel,
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suppliers, customers, costs, profits and pricing policies, "know how" and
certain business methodologies (the "Confidential Information").
(b) During the Term and thereafter, the Employee shall
exercise all due and diligent precautions to protect the integrity of the
customer lists, mailing lists and sources thereof, statistical data and
compilations, agreements, contracts, manuals, memoranda, notes, records, reports
or other documents and any and all other materials embodying any Confidential
Information (the "Confidential Materials") and, upon the Company's request in
writing, Employee shall immediately return to the Company all such Confidential
Materials (and copies thereof) then in Employee's possession or control.
(c) The Employee agrees that Employee will not at any time,
either during the Term of this Agreement or thereafter, divulge to any person or
entity any Confidential Information or deliver or permit any person or entity to
obtain any Confidential Materials except (i) when required in the course of
performing Employee's duties hereunder, (ii) with the Company's express written
consent; (iii) where required to be disclosed by court order, subpoena or other
government process, or (iv) any information which is in the public domain. If
the Employee shall be required to make disclosure pursuant to the provisions of
clause (iii) of the preceding sentence, the Employee promptly, but in no event
more than forty-eight hours after learning of such subpoena, court order, or
other governmental process, shall notify, by personal delivery or by electronic
means, confirmed by mail, the Company and, at the Company's expense, Employee
shall: (x) take all reasonably necessary steps required by the Company to defend
against the enforcement of such subpoena, court order or other government
process, and (y) permit the Company to intervene and participate with counsel of
its choice in any proceeding relating to the enforcement thereof.
(d) Upon termination of Employee's employment with the
Company, the Employee will promptly deliver to the Company all Confidential
Materials relating to the Company and its affiliates, which Employee may then
possess or have under Employee's control; provided, however, that Employee shall
be entitled to retain copies of such documents reasonably necessary to document
Employee's financial relationship (both past and future) with the Company.
(e) The Employee acknowledges that (i) any breach of the
provisions of these Sections 9 and 11 may cause substantial and irreparable harm
to the Company for which the Company would have no adequate remedy at law, and
(ii) the provisions of this Agreement are reasonable and necessary for the
protection of the business of the Company and its affiliates.
12. REMEDIES
(a) If Employee commits a material breach, or threatens to
commit a material breach, of any of the provisions of Sections 9 and 11, the
Company shall have the right and remedy:
(i) to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction; and
(ii) to require Employee to account for and to
pay over to the Company all damages suffered by the Company (including
consequential and incidental damages) as the result of
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any transactions constituting a breach of any of the provisions of Sections 9
and 11, and Employee hereby agrees to account for and pay over such damages to
the Company;
(b) The Employee acknowledges and agrees that the services
being rendered hereunder to the Company are of a special, unique and
extraordinary character and that any such breach or threatened breach may cause
substantial and irreparable injury to the Company and that money damages will
not provide an adequate remedy to the Company. Employee further agrees that the
Company in any such equitable proceeding shall not have to prove irreparable
harm. (However, in a suit for damages, Company shall be required to prove the
amount of damages actually sustained.)
(c) Each of the rights and remedies enumerated in Section
12(a) shall be independent of the other, and shall be severally enforceable, and
such rights and remedies shall be in addition to, and not in lieu of any other
rights and remedies available to the Company under law or equity.
(d) If any provision of Section 9 or 11 is held to be
unenforceable because of the scope, duration or area of its applicability, the
court making such determination shall have the power to modify such scope,
duration, or area, or all of them, and such provision or provisions shall then
be applicable in such modified form.
13. INDEMNIFICATION.
(a) The Company hereby agrees to indemnify and hold harmless
the Employee, both during and after the expiration of the Term, from and against
any and all loss or liability including reasonable legal fees and legal
disbursements which the Employee may have to third parties as a result of the
proper performance of Employee's duties hereunder during the Term, to the extent
permitted by the laws of the State of New York. The Employee hereby agrees to
indemnify and hold harmless the Company from any and all loss or liability which
the Company suffers as a result of Employee's material breach of Employee's
obligations hereunder during the Term or pursuant to any previous Employment
Agreement between the Company and the Employee, to the extent permitted by the
laws of the State of New York. When the Company assumes its obligation to
indemnify and hold harmless the Employee in connection with a claim or
litigation, its obligation with respect to such claim or litigation shall be
limited to holding the Employee harmless from and against any judgment or
settlement approved by the Company in connection with the claim or litigation.
The Company reserves the right to select counsel of its choosing to defend the
Employee.
(b) Whenever a claim shall arise for which any party may be or
become entitled to indemnification hereunder, the indemnified party shall notify
the indemnifying party promptly, and in the case of a third party claim, in
writing within ten days of the indemnified party's first receipt of written
notice of such third party claim, and in any event within such shorter period as
may be legally required for the indemnifying party or parties to take
appropriate action to resist such claim. The failure to give a timely notice, as
provided in the preceding sentence, shall not operate as a waiver of an
indemnified party's right to indemnification, provided that the failure to give
such notice did not materially prejudice the legal rights of the indemnifying
party. Such notice shall specify all facts known to the indemnified party giving
rise to such indemnity rights and shall estimate (to the extent determinable)
the amount of the liability arising therefrom.
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14. NOTICE.
Any notice required hereunder shall be delivered by hand, or
sent by registered or certified mail, addressed to the other party hereto at its
address set forth above or at such other address as notice thereof shall have
been given in accordance with the provisions of this Section 14. Any such notice
shall become effective (a) if mailed, on the date indicated on the receipt or if
not accepted, the date indicated that delivery was attempted, and (b) in the
case of delivery by hand, upon delivery or attempted delivery as shown on the
records of the deliveries.
15. AGREEMENT; AMENDMENT.
This Agreement supersedes any prior agreements or
understandings, oral or written, between the parties hereto and represents their
entire understanding and agreement with respect to the subject matter hereof.
This Agreement can be amended, supplemented or changed, and any provision hereof
can be waived, only by written instrument making specific reference to this
Agreement which instrument is signed by the party against whom enforcement of
any such amendment, supplement, modification or waiver is sought. Any waiver of
any breach of this Agreement shall not be construed to be a continuing waiver or
consent to any subsequent breach by any party hereto.
16. SEVERABILITY.
In the event of the invalidity or unenforceability of any one
or more provisions of this Agreement, such illegality or unenforceability shall
not affect the validity or enforceability of the other provisions hereof and
such other provisions shall be deemed to remain in full force and effect.
17. ASSIGNMENT; BINDING EFFECT.
This Agreement is not assignable by Employee without the prior
written consent of the Company. This Agreement shall be binding upon and shall
inure to the benefit of the Company and its successors and assigns.
18. SECTION HEADINGS.
The Section Headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
19. GOVERNING LAW; VENUE.
THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO AGREE THAT ANY
ACTIONS OR PROCEEDINGS INSTITUTED TO ENFORCE RIGHTS HEREUNDER SHALL BE INITIATED
IN THE FEDERAL OR STATE COURTS LOCATED IN WESTCHESTER COUNTY, NEW YORK.
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20. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
CITYSCAPE CORP.
By: /s/ Xxxxxx Xxxxxx
Name Xxxxxx Xxxxxx
Title Sr VP
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
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