March 5, 2009 Mr. Peter H. Rothschild Interim Chairman of the Board of Directors Deerfield Capital Corp. New York, NY 10022 Dear Mr. Rothschild:
Exhibit 10.52
March 5, 2009
Xx. Xxxxx X. Xxxxxxxxxx
Interim Chairman of the Board of Directors
000 Xxxx 00xx
Xxxxxx,
12th Floor
New York, NY 10022
Dear Xx. Xxxxxxxxxx:
The purpose of this letter agreement (the “Agreement”)
is to extend, for the 2009 calendar year, the compensation terms
established in the letter agreement that Deerfield Capital Corp.
(“DFR” or “we”) entered into with you on
July 29, 2008, establishing your compensation for the 2008
calendar year (the “Prior Agreement”) as Interim
Chairman of our Board of Directors, or the Board, subject to
certain technical changes reflecting the applicability of the
Agreement to the 2009 rather than 2008 year and the
addition of a success fee relating to your efforts in connection
with a proposed new investment fund to be managed by DFR (the
“Fund”).
By your execution and delivery to us of a copy of this
Agreement, this Agreement will become a binding legal obligation
of the parties, replacing in its entirety the Prior Agreement
other than amounts already paid or agreed by us to be paid to
you pursuant to the compensation arrangements for your services
during calendar year 2008.
The compensation specified in this Agreement was recommended to
the Board by the Compensation Committee of the Board (the
“Committee”) and generally reflects the factors noted
in the Prior Agreement. The Committee also considered, among
other factors, your vital contributions to DFR and its
shareholders in 2008; the extensive amount of time you expect to
continue to devote to DFR matters in 2009; the expected
continuation in 2009 of the severe credit market dislocations
experienced in 2008 and their continuing impact on DFR; and
various other major challenges that DFR is likely to face in
2009 that will require your time and high level of skills.
Accordingly, DFR proposes to pay you, for the period
January 1, 2009 through December 31, 2009, the amounts
set forth below, subject to the terms and conditions set forth
below.
| 1. | Base Fee |
a. Base Fee. Subject to c. below, DFR
shall pay you a fee (the “Base Fee”) of $500,000 for
the 2009 calendar year. The Base Fee will be paid in cash, in
accordance with payroll practices of DFR’s subsidiary,
Deerfield Capital Management LLC (“DCM”).
b. Expense Reimbursement. Subject to
1.c. below, DFR shall reimburse you for the amounts you owe to
Daroth Capital LLC for expenses relating to office space,
information technology and other items in an amount equal to
$10,000 per month for the 2009 calendar year (the “Expense
Reimbursement”). The Expense Reimbursement will be paid in
cash, on a monthly basis. The Expense Reimbursement is in
addition to any out-of-pocket expenses incurred by you in
connection with your activities on DFR’s behalf.
c. Termination of Base Fee and Expense
Reimbursement. DFR shall terminate the Base Fee
and Expense Reimbursement immediately upon your
(i) voluntary resignation as Board Chairman,
(ii) death or Disability (as defined below),
(iii) removal as a Board member pursuant to the Director
removal provision in Section 4.8 of DFR’s Charter as
in effect on the date hereof or (iv) failure to be
re-elected as a Director by the DFR stockholders at the next DFR
annual stockholders meeting. Disability means your physical or
mental incapacity as a result of which you are unable for a
period of 90 days during any
180-day
period to perform your duties as Board Chairman with
substantially the same level of quality as immediately before
the incapacity.
d. Equity Participation. There shall be
no prohibition against the Committee, in the exercise of its
discretion, granting you all or part of the equity awards
granted to the independent directors of the Board (upon the same
terms and conditions as the grants to such directors).
| 2. | Success Fees |
a. General. You shall be eligible in 2009
for each of the three success fees specified below —
namely, the Capital Transaction Success Fee, the Non-Capital
Transaction Success Fee and the Fund Success Fee. The
Committee shall have complete discretion as to whether either or
both of the Capital Transaction or Non-Capital Transaction
Success Fee is awarded and, if awarded, the amount of the fee
(subject to the ceilings on each fee specified below), as well
as the fee portion, if any, payable in cash and the portion, if
any, payable in Performance Shares (as defined in the DFR Stock
Incentive Plan (the “Plan”) in effect on the date
hereof) or other non-cash compensation specified in the Plan.
The Committee shall also have complete discretion as to the
vesting and other provisions relating to such non-cash awards,
subject to the condition that such provisions shall generally be
comparable to those relating to the awards of non-cash
compensation to DCM employees for their 2009 services. The award
of the Fund Success Fee shall not be discretionary on the
part of DFR but instead shall be awarded if you meet the
objective criteria specified below for that fee.
b. Capital Transaction Success Fee. You
shall be eligible for a Capital Transaction Success Fee, not to
exceed $1,000,000, if, in your capacity as Board Chairman, you
are instrumental in causing DFR to execute agreement(s) for a
Capital Transaction, as defined below, in 2009 that
substantially increase DFR shareholder value.
A Capital Transaction means (i) the ownership or
acquisition by any person of more than 50% of the outstanding
common stock of DFR; (ii) the merger or consolidation of
DFR with or into any person; or (iii) any one or a series
of related sales or conveyances to any person of all or
substantially all of DFR’s assets.
c. Non-Capital Transaction Success
Fee. You shall also be eligible for the
Non-Capital Transaction Success Fee, not to exceed $500,000, if
the following conditions are met: (i) in your capacity as
Board Chairman you are instrumental in causing DFR to engage in
actions other than a Capital Transaction that increase DFR
shareholder value, such as strategic partnerships or joint
ventures, and (ii) such actions result in a substantial
increase in DFR shareholder value in 2009. For the avoidance of
doubt, your award of the Capital Transaction Success Fee shall
not affect your eligibility for the Non-Capital Transaction
Success Fee, nor vice versa.
d. Fund Success Fee. In
consideration of your efforts in connection with the Fund, which
we believe to be vital to DFR’s future, DFR shall pay you a
Fund Success Fee of $250,000, provided the closing of the
initial capital commitments to the Fund occurs on or before
June 30, 2009 and the total amount of such commitments
exceeds $50,000,000. Those efforts include your introduction to
us of potential lead investors in the Fund and your guidance of
negotiations with such potential investors. For the avoidance of
doubt, you shall be entitled to the Fund Success Fee
(provided the capital commitment requirement specified in the
previous sentence is met) notwithstanding (i) the
occurrence of any of the events specified in
paragraph 1.c.(i) and (ii) above or (ii) the
award of either or both of the Capital Transaction or
Non-Capital Transaction Success Fees.
e. Committee Discretion. You acknowledge
and agree that the awards of the Capital Transaction and
Non-Capital Transaction Success Fees (as distinguished from the
Fund Success Fee) are wholly within the discretion of the
Committee, as are the amounts of those two Success Fees and the
cash or stock components of the two Success Fees; that the
Committee may award you both or one of the two Success Fees and
not the other; and that the Committee might not award you either
of the two Success Fees.
| By: |
/s/ Xxxxxxxx
X. Xxxxxxx
|
Name: Xxxxxxxx X. Xxxxxxx
| Its: | Chief Executive Officer |
Agreed and Acknowledged:
/s/ Xxxxx
X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
