EMPLOYMENT AGREEMENT
FOR
XXXXXX XXXXXXXX
United Financial Mortgage Corp., an Illinois corporation, ("Company") and
Xxxxxx Xxxxxxxx ("Employee") in consideration of the mutual obligations and
undertakings contained herein agree as follows:
1. RECITALS.
1.1 The Company wishes to provide for the management of its business and
growth of its mortgage banking activities, and to that end wishes to employ
Employee as its President and Chief Executive Officer, and Employee wishes to
undertake such employment.
1.2 Employee has been president and chief executive officer of the Company
since May 21, 1986 and Employee was reelected President and Chief Executive
Officer by the Board of Directors effective for the fiscal year commencing as of
May 1, 1996.
2. EMPLOYMENT.
2.1 The Company employs Employee as its President and Chief Executive
Officer, and Employee accepts such employment by the Company upon the terms and
conditions set forth in this Agreement.
3. DUTIES.
3.1 Employee's duties shall be to serve as President and Chief Executive
Officer of the Company, to supervise, direct and be responsible for the overall
operation of the business of the Company and in general to perform such duties
and to have such responsibilities as are customary for chief executive officers
of similarly situated businesses. Employee, in performing his duties under this
Agreement, shall be subject to and observe the terms and provisions of the By-
laws of the Company and shall be subject to the direction and control of the
Board of Directors and/or the Shareholders of the Company. The specific scope
and nature of Employee's duties under this Agreement may from time to time be
further defined by the Board of Directors of the Company.
4. COMPENSATION AND BENEFITS.
4.1 Employee shall be paid an initial base salary for the period from March
1, 1997 to February 28, 1998 of Two Hundred and Fifty Thousand Dollars
($250,000.00) per year, payable in installments not less often than monthly
("Base Salary"). The initial base salary shall be increased by ten percent (10%)
per annum for each subsequent fiscal year for the remaining four (4) fiscal
years of this Agreement.
04/03/97
4.2 Employee shall be reimbursed by the Company for all ordinary and
necessary expenses that Employee may incur in connection with the performance of
his duties under this Agreement, provided, however, that any such reimbursement
shall be conditioned upon Employee's delivery to the Company of all
documentation necessary in order to permit the Company to deduct such expenses
as business expenses in accordance with the provisions of Section 162 of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.
4.3 Employee shall have the right to participate in all group life
insurance, hospitalization insurance, major medical insurance, disability
insurance and retirement plans from time to time offered by the Company to its
employees, subject to the eligibility requirements and other terms and
conditions of such plans. Nothing contained in this Agreement shall, however, be
construed as imposing a duty on the Company to institute any such group plans or
to continue to offer any such group plan which is hereafter offered to its
employees. The Company shall pay all premiums and other charges which become due
in connection with Employee's participation during the term of this Agreement in
any group plan in which Employee is participating pursuant to this Section 4,
including premiums and other charges for participation by members of Employee's
family in such plans where family benefits are provided.
5. VACATION.
Employee shall be entitled to not less than five (5) weeks paid vacation
per year during the term of this Agreement. Employee shall take such vacation at
such time or times as he and the Company shall agree to, but if Employee and the
Company shall be unable to reach an agreement, then Employee shall take such
vacation at such time or times as the Company shall determine.
6. LIFE INSURANCE.
(a) The Company shall continue to maintain throughout the term of this
Agreement, insurance on the life of Employee in the amount of Seven Hundred
Thousand Dollars ($700,000.00). Such insurance is currently in effect with
Xxxxxxx National Life Insurance Company for Five Hundred Thousand Dollars
($500,000), and Transamerica Insurance Company for Two Hundred Thousand Dollars
($200,000). Each policy designates the Employee's spouse as the beneficiary.
(b) The Company also may elect to endeavor to acquire "key man" life
insurance on the life of the Employee in such amount as the Board of Directors
of the Company shall determine from time to time. Such "key man" life insurance
shall designate the Company as the beneficiary entitled to receive one hundred
percent (100%) of the life insurance benefits, in the event of Employee's death.
Employee agrees to reasonably cooperate with the Company in its efforts to
obtain and maintain such life insurance, which cooperation shall include
providing necessary information for any application for insurance and submitting
to any physical examinations
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required by a prospective insurer.
7. ADDITIONAL EXECUTIVE BENEFITS.
In addition to any other compensation or benefits payable to Employee
hereunder, Employee shall be entitled to the following Additional Executive
Benefits from the Company as set forth herein:
(a) Automobile Allowance. The Company shall pay Employee an automobile
allowance of Twenty-Five Thousand Dollars ($25,000) per annum, payable to
Employee in equal monthly installments on the first day of each month during the
term of this Agreement. Employee shall be entitled to expend such Automobile
Allowance to: purchase or lease one or more vehicles, pay for repairs, gas, oil
and maintenance, and insurance costs.
(b) Hospitalization/Major Medical and Long-Term Disability. The Company
shall pay the cost of major medical, hospitalization and long-term disability
insurance for the Employee and his eligible dependents during the term of this
Agreement from insurance companies and upon such terms as selected by Employee.
Long-term disability insurance coverage shall not be available to the dependents
of the Employee, unless such dependents are eligible for coverage under such
insurance program.
8. INCENTIVE COMPENSATION.
In addition to the compensation and benefits set forth herein, Employee
shall be paid incentive compensation for each fiscal year of the Company during
the term of this Agreement in an amount equal to ten percent (10%) of any
increase of the Company's net income before taxes as stated in the Company's
statement of income as set forth in the Company's fiscal year end audited
financial statements ("Net Income"). Net Income shall be determined by the
Company's auditors. Incentive compensation shall be paid to Employee on a lump
sum basis within thirty (30) days of the date of the completion of the Company's
audited financial statements for each fiscal year. For the purposes of
determining Employee's eligibility to receive incentive compensation, net
operating revenues for the fiscal year ended April 30, 1998, shall be compared
with the Company's net operating revenues for the Company's fiscal year ended
April 30, 1997, and the same comparison shall be made for each succeeding fiscal
year during the term of this Agreement.
9. TERM.
Subject to the provisions for termination contained herein, this
Agreement shall have a term of five (5) years commencing from the effective date
of a prospectus relating to a public offering of the Company's securities.
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10. TERMINATION OF EMPLOYMENT.
If, for any reason other than cause (as defined below in this Section
10 Employee's employment shall be terminated by the Company before the term of
employment has been completed, Employee shall be entitled to receive, and the
Company shall be obligated to pay, the base annual salary set forth in Section
4.1 above, for each year (or fraction thereof) of the remaining term of
employment. Employee also shall continue to participate in all plans and
programs of the Company referred to in Sections 4, 6 and 7 hereof, to the extent
that such continued participation is available under the general terms and
provisions of such plans and programs.
Termination by the Company for "cause" shall mean termination by
unanimous action of the Company's Board of Directors and/or Shareholders because
of misconduct by Employee in respect of his obligations under the Agreement.
11. PROPRIETARY INFORMATION AND NON-COMPETITION
11.1 Employee recognizes and acknowledges the value to the Company of his
proprietary information regarding the Company, including business secrets,
methods, processes, formulas, inventions, research, know-how, technical data,
product lists, marketing information, customer list, supplier lists, financial
information and all other proprietary information developed by the Company and
to be developed by the Company in the future conduct of its business (the
"Proprietary Information").
11.2 Employee agrees that the Proprietary Information shall be and remain
the exclusive property of the Company, and that he shall have no rights thereto
or interest therein. Employee agrees that such information is confidential and
shall be deemed proprietary and held confidential and secret by him and not
disclosed by him, whether during or after his employment by the Company, and
Employee agrees that he will not disclose the same to any other person, firm or
corporation whether or not such person, firm or corporation is a competitor of
the Company or otherwise.
11.3 Employee acknowledges and agrees that disclosure by him of any of the
Proprietary Information in violation of the provisions of Section 11.2 of this
Agreement will result in irreparable injury to the Company which will not be
adequately measurable in money damages; that the Company may have no adequate
remedy at law therefor; and that the Company shall be entitled to such
preliminary, temporary or permanent mandatory or restraining injunctions, order
or decrees as may be necessary to protect it against, or on account of, any
breach by Employee of the provisions of Section 11.2 of this Agreement.
11.4 Employee agrees that, upon any termination of his employment by the
Company, Employee shall deliver to the Company all documents, records, note
books and similar material, and any copies thereof, containing any of the
Proprietary Information which is at that time in his possession.
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11.5 These covenants of confidentiality shall survive Employee's
employment relationship with the Company and shall have application throughout
the world.
11.6 During the term of this Agreement and for a period of two (2) years
after any termination of Employee's employment under this Agreement, Employee
shall not:
(a) engage in any business which is directly competitive with the
business of the Company as such is conducted at any time during
the term of this Agreement;
(b) solicit any person, firm or corporation which was or is a
customer of the Company during the term of this Agreement for the
purpose of selling such person, firm or corporation any product
or service competitive with the products or services sold by the
Company during the term of this Agreement;
(c) directly or indirectly attempt to engage, on Employee's behalf or
on behalf of any competitor of the Company, any person who at
that time is an employee of the Company, for the purpose of
employing such person to create or offer products or services in
competition with the products or services offered for sale by the
Company.
11.7 Employee acknowledges and agrees that any violation by him of the
provisions of Section 11.6 above will result in irreparable injury to the
Company which will not be adequately measurable in money damages; that the
Company may have no adequate remedy at law therefor; and that the Company shall
be entitled to such preliminary, temporary or permanent mandatory or restraining
injunctions, orders or decrees as may be necessary to protect it against, or an
account of, any breach by Employee of the provisions of Section 11.6 of this
Agreement.
12. INDEMNIFICATION OF EMPLOYEE.
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The Company shall indemnify Employee to the full extent permitted by
Illinois law against all expenses (including reasonable attorney's fees)
actually and reasonably incurred by Employee in connection with any pending or
threatened action, suit or proceeding (whether civil, criminal, administrative
or investigative) in which Employee is made a party or threatened to be made a
party by reason of the fact that he is or was director, officer or employee of
the Company.
13. NOTICES
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Any notice, request or communication that is required or permitted to
be given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given
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if delivered in person, transmitted by telegraph or deposited in the United
States mail, postage prepaid, for mailing first class, either certified or
registered mail, return receipt requested:
If to the Company, addressed to:
United Financial Mortgage Corp.
000 Xxxxxxxxxx Xxxxx
Xxxxx #000
Xxx Xxxxx, Xxxxxxxx 00000
If to Employee, addressed to:
Xx. Xxxxxx Xxxxxxxx
00 Xxxxxxxx Xxx
Xxxxx Xxxxxxxxxx, Xxxxxxxx 00000
or to such other address or addresses as the parties may from time to time
designate to each other in writing. Any written notice given pursuant to this
Agreement shall be deemed to have been given on the date it was delivered,
transmitted or mailed as specified above. The parties shall acknowledge in
writing the receipt of any such notice given in person.
14. ABSENCE OF RESTRICTIONS.
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Employee represents and warrants to the Company that Employee is not
subject to any agreements, conditions or restrictions which would prohibit or
restrict Employee from entering into this Agreement and that by entering into
this Agreement and performing the services to be provided hereunder Employee
will not violate or be in violation of the provisions of any agreement, court
order, statute or law limiting or preventing such acts.
15. SUCCESSORS IN INTEREST.
-----------------------
The rights of the Company and Employee under this Agreement shall
inure to the benefit of, and the obligations shall be binding upon, their legal
representatives, successors and assigns.
16. WAIVER.
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The waiver by a party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach.
17. AMENDMENT.
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This Agreement may be altered or amended only by a writing signed by
both of the parties.
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18. ARBITRATION.
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All disputes or controversies arising under this agreement shall be
resolved by arbitration with a panel of three arbitrators under the Commercial
Arbitration Rules of the American Arbitration Association to be conducted in the
City of Schaumburg, Illinois.
19. CONSTRUCTION.
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19.1 In this construction of this Agreement, where the context so
requires, each gender shall include all other genders and the singular include
the plural, and vice versa.
19.2 The headings of Sections of this Agreement are intended for
convenience only and shall not be construed to define, limit or amplify the
contents thereof.
19.3 This Agreement shall be governed by, and it and the rights of
the parties shall be construed and determined in accordance with, the laws of
the State of Illinois as in effect for contracts made and to be performed in the
State of Illinois.
19.4 The parties intend that the terms of this Agreement shall be
enforced to the greatest extent permitted by law. If for any reason whatsoever
any one or more provisions of this Agreement shall be finally determined to be
inoperative, unenforceable or invalid, by a court of competent jurisdiction, in
a particular case, such determination shall not render such provision
inoperative, unenforceable or invalid in any other case or render any the other
provisions of this Agreement inoperative, unenforceable or invalid, and to the
extent practicable, provisions determined to be unenforceable shall be
considered to be reformed to the extent necessary to make them enforceable.
20. ENTIRE AGREEMENT.
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This writing contains the final expression of the agreement between
the parties and also is intended as a complete and exclusive statement of the
terms upon which the parties have agreed.
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The parties have executed this Agreement this ____ day of ____________,
1997.
UNITED FINANCIAL MORTGAGE CORP.
By:
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Title:
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By:
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Xxxxxx Xxxxxxxx
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