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EMPLOYMENT AGREEMENT
(XXXX X. XXXXXXXX)
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the
day of , 1997 (the "Effective Date"), is by and between Hanover
Capital Mortgage Holdings, Inc., a Maryland corporation, with its offices
located at 00 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"),
and Xxxx X. Xxxxxxxx (the "Employee"), an individual whose residence is 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
The Company acknowledges and recognizes the value of the Employee's
reputation in the business, experience and ability, and based upon the
Employee's representations respecting the Employee's reputation in the business,
experience and ability, the Company desires to provide for the employment and
continuation of the Employee's employment with the Company on the terms set
forth in this Agreement.
1. EMPLOYMENT AND ACCEPTANCE OF EMPLOYMENT; TERM. Upon and subject
to the terms and conditions set forth in this Agreement, the Company hereby
employs the Employee as its Chairman of the Board of Directors, President and
Chief Executive Officer or in such other management position(s) as the Board of
Directors of the Company (the "Board") may determine from time to time, and the
Employee hereby agrees to accept such employment, for a period of five years
(unless sooner terminated as hereinafter set forth) (the "Initial Term")
commencing on the Effective Date and ending five years thereafter (the
"Expiration Date"). Subject to Sections 9(a) and 9(g) of this Agreement, this
Agreement shall be automatically extended upon the Expiration Date for
successive one year terms commencing on the fifth anniversary date of the
Effective Date unless the Employee or the Company gives the other party not less
than three (3) months written notice prior to the Expiration Date, or any
anniversary of the Effective Date thereafter.
2. DUTIES. It is the intention of the Company and the Employee that,
subject to the direction and supervision of the Board, the Employee shall have
full discretionary authority to control the day-to-day operations of the Company
as described in the Registration Statement on Form S-11 filed on June 13, 1997,
and as amended from time to time thereafter (the "Registration Statement") and
to incur such obligations on behalf of the Company as may be necessary or
appropriate in the ordinary course of business as described in the Registration
Statement. The Employee agrees, during the Initial Term and any extension of the
Initial Term, to devote his entire business and professional time, attention,
and energies exclusively to the business of the Company and its subsidiaries
(including, without limitation, Hanover Capital Mortgage Holdings, L.P., Hanover
Capital Partners Ltd., Hanover Capital Mortgage Corporation and Hanover Capital
Securities, Inc.) as shall be necessary, advisable or required to perform the
duties of the Employee's positions specified in Section 1, and to conform to the
rules, regulations, instructions, personnel practices and policies of the
Company, as existing and amended from time to time by the Company or its Board.
Notwithstanding the foregoing, during
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the Initial Term and any extension of the Initial Term, the Employee may (i)
serve as an officer, director, trustee or committee member of any religious,
professional, civic, charitable or educational organization, or as a director of
any corporation whose business is not competitive with the Company or any of its
subsidiaries, and (ii) engage in, and devote time and effort to, any and all
personal investments or personal business ventures (which shall in no event
include being an officer or principal shareholder of any public or private
company) unrelated to the business or affairs of the Company and its
subsidiaries, in each case so long as such activities do not materially
interfere with the Employee's obligations to the Company and its subsidiaries or
conflict in any way with the business of the Company.
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY. In consideration of the Employee's performance of
services under this Agreement, the Company will pay to the Employee, during the
first year of the Initial Term of the Employee's employment under this
Agreement, and the Employee agrees to accept from the Company for the Employee's
services under this Agreement, an annual salary (the "Base Salary") of $300,000,
payable on a pro rata basis in accordance with the Company's normal payroll
practices applicable to its executive officers, but not less often than monthly.
The Employee's Base Salary shall be subject to annual review by the non-employee
members of the Board or the Company's Compensation Committee (to be comprised of
non-employee members of the Board) in the event one is then appointed (the
"Committee") and may be adjusted (upwards but not downwards) in such amounts as
the Board or Committee, as applicable, may determine in its sole discretion.
Notwithstanding the foregoing, the Base Salary shall be increased annually by
any cost of living increases, as determined by the Board or the Committee in its
sole discretion, as applicable. To that end, the Employee shall receive a
performance review at least once a year from the Board or the Committee, as
applicable, in connection with which the Employee shall be eligible for such
merit increases and other salary adjustments as the Board may approve or not in
its sole discretion.
(b) BONUS. In addition to the Base Salary, the Employee shall be
entitled during the Initial Term and any extension thereof to participate in the
Company's Bonus Incentive Compensation Plan and any and all other bonus plans
adopted by the Board for the executive officers of the Company and its
subsidiaries. The Employee shall be eligible to receive a bonus each year in
such amount as determined or not by the non-employee members of the Board or the
aforementioned Committee pursuant to the terms of the Bonus Incentive
Compensation Plan.
(c) STOCK OPTIONS. The Employee shall be entitled to participate
in the Company's 1997 Stock Option Plan and any and all other equity
compensation plans adopted by the Board for the employees of the Company and its
subsidiaries. Upon the Effective Date, the Company shall grant to the Employee
an option to purchase 89,467 shares of Common Stock, par value $.01 per share,
of the Company, at an exercise price per share equal to the initial public
offering price per share of the Company's Common Stock in the offering effected
pursuant to the Registration Statement, such option to vest pursuant to the
terms of the 1997 Stock Option Plan. Such option shall be an incentive stock
option within the meaning of Section 422 of the Internal
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Revenue Code of 1986, as amended, to the extent possible consistent with the
provisions of this Agreement.
(d) BENEFITS; AUTOMOBILE ALLOWANCE. During the Initial Term of this
Agreement and any extension thereof, the Employee shall be entitled to receive
medical, dental and other health benefits no less favorable to the Employee than
those provided to him by Hanover Capital Partners Ltd. during the one year
period preceding the Effective Date (and as described on the attached EXHIBIT A)
and to participate in any other medical, pension, bonus, profit-sharing or
similar plan or program that may be established by the Company and made
available to its executive officers generally. In addition, the Employee shall
be entitled to a car allowance to be applied to the leasing and maintenance of
an automobile of an appropriate age and condition in an amount not to exceed
$8,400 per annum, payable monthly.
(e) LIFE AND DISABILITY INSURANCE. During the Initial Term and any
extension thereof, the Company shall provide to the Employee at the expense of
the Company (i) a term life insurance policy with a death benefit equal to
$2,000,000; and (ii) disability insurance coverage which shall provide the
Employee with a benefit upon total disability equal to seventy-five percent
(75%) of the Base Salary then in effect payable until the Employee is seventy
(70) years old. The Employee shall have the option to pay the premiums for the
disability insurance coverage directly and, in such event, the Base Salary under
this Agreement shall be increased by an amount equal to the amount of such
premiums, plus an additional amount equal to the Employee's additional income
tax resulting from such increase.
(f) PAID VACATIONS. The Employee shall be entitled to annual paid
vacations of six (6) weeks in each year of the Initial Term and any extension of
the Initial Term, at such times and for such periods as may be mutually
acceptable to the Company and the Employee, in accordance with the Company's
policies governing vacations for executive officers of the Company. Unused
vacation in any given year shall not accumulate from year to year and Employee
shall not be entitled to any cash payment for or payment in lieu of unused
vacation time.
(g) PAID HOLIDAYS AND PERSONAL DAYS. The Employee shall be entitled
to all paid holidays and personal days, in accordance with the Company's
policies governing holidays and personal days for executive officers of the
Company.
(h) CLUB DUES. The Company shall pay all membership dues owed to
clubs (as selected by the Employee), not to exceed $2,500 per year.
(i) DEDUCTIONS. The Company shall have the right to deduct from the
Base Salary and all other cash amounts payable by the Company under the
provisions of this Agreement to the Employee or, if applicable, to his estate,
legal representatives or other beneficiary designated in writing by the Employee
(a "Designee"), all social security taxes, all federal, state and municipal
taxes and all other charges and deductions which now or hereafter are imposed by
law as charges on the compensation of the Employee or charges on cash benefits
payable by the Company under this Agreement to his estate, legal representatives
or Designee.
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4. REIMBURSEMENT OF CERTAIN EXPENSES. The Company shall reimburse
the Employee, upon production of accounts and vouchers or other reasonable
evidence of payment by the Employee, all in accordance with the Company's
regular procedures in effect from time to time and in form suitable to establish
the validity and deductibility of such expenses for tax purposes, all
reasonable, ordinary and necessary travel, automobile and other expenses as
shall have been incurred by the Employee in the performance of the Employee's
duties under this Agreement.
5. NON-COMPETITION.
(a) NON-COMPETITION. Through the date on which the Employee's
employment with the Company is terminated (the "Termination Date") and, in the
event that the Employee's employment with the Company is terminated other than
(i) by the Company pursuant to Sections 9(b) (termination by the Company without
Good Cause) or 9(g) (termination by the Company following a Change of Control)
or (ii) by the Employee pursuant to Sections 9(d) (termination by the Employee
following loss of Board seat) or 9(g) (termination by the Employee following a
Change of Control), until the Expiration Date, the Employee will not, directly
or indirectly, engage in the business of, or own or control an interest in
(except as a passive investor owning less than one percent (1%) of the equity
securities of a publicly-owned company), or act as director, officer or employee
of, or consultant to, any individual, partnership, joint venture, corporation or
other business entity directly or indirectly engaged anywhere in the United
States in any Business (as hereinafter defined) competing with the business then
being carried on by the Company or its subsidiaries or contemplated by the
Company or its subsidiaries to the extent included within the definition of
"Business." In the event any of the provisions of this Section 5(a) are
unenforceable by law, then the restrictions shall be for such period and such
geographic area as a court shall find is necessary to protect the Company. The
provisions of this Section 5(a) shall no longer be enforceable in the event the
Company either files for bankruptcy or other protection from creditors (which
filing is not dismissed within 180 days) or advises its shareholders in a press
release and in a filing with the Securities and Exchange Commission that it is
ceasing to operate as an ongoing business.
(b) BUSINESS. The term "Business" as used in this Section 5 shall
mean (i) acquiring and holding single family mortgage loans, (ii) originating,
selling and servicing multifamily and commercial real estate loans, (iii)
offering due diligence services to buyers, sellers and holders of mortgages,
(iv) securitizing the mortgage loans and retaining interests therein, (v)
purchasing mortgage asset investments in the secondary mortgage market, (vi)
managing such portfolios, (vii) any other business in which the Company or any
subsidiary is engaged on the Termination Date, (viii) such other business
contemplated by the Registration Statement or any subsequent filings by the
Company or any subsidiary with the Securities and Exchange Commission prior to
the Termination Date and (ix) any other business in which the Company or any
subsidiary is actively planning to become engaged on the Termination Date, and
in connection with the planning of which the Employee has had significant
involvement.
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(c) EMPLOYEE REPRESENTATION. The Employee represents to the Company
(i) that the Employee is not subject to any employment agreement as of the
Effective Date, nor has the Employee previously, at any time, entered into any
written agreement with any person, firm or corporation, which would or could
preclude or prevent him from entering into this Agreement or which requires the
consent of any other party, and (ii) that as of the Effective Date, neither the
Company nor any of its subsidiaries has any financial or other obligation to the
Employee except as set forth on EXHIBIT B. The Employee agrees to indemnify the
Company and each of its officers, directors and controlling persons against any
claim, loss, liability or expense (including reasonable counsel's fees and
costs) incurred by the Company or its officers, directors and controlling
persons arising out of or in connection with any misrepresentation made by the
Employee under this Agreement.
6. CONFIDENTIALITY.
(a) OBLIGATION TO KEEP CONFIDENTIAL. The Employee acknowledges that
his employment by the Company brings him into close contact with many
confidential affairs of the Company, its subsidiaries and its customers,
including, without limitation, information about costs, profits, markets, sales,
key personnel, pricing policies, operational methods, concepts, and other
business affairs and methods of the Company, its subsidiaries and its customers
and other information not readily available to the public, as well as plans for
future developments (collectively referred to hereinafter as "Proprietary
Information"). The Employee further acknowledges that the relationships between
the Company, its subsidiaries and its officers, employees, agents, and customers
constitute a valuable asset of the Company (the "Other Proprietary Assets"). In
recognition of the foregoing, the Employee covenants and agrees:
(i) That all Proprietary Information and Other
Proprietary Assets shall be the exclusive property of the Company and that the
Employee will keep secret all Proprietary Information and Other Proprietary
Assets and will not use the same for the Employee's own benefit or disclose the
same to, or use the same for the benefit of, anyone outside of the Company,
either during or after the Employee's employment by the Company; and
(ii) That Employee will deliver promptly to the Company
on termination of Employee's employment by the Company, or at any time the Board
may so request, all Proprietary Information and Other Proprietary Assets,
including, without limitation, all memoranda, notes, documentation, data,
records, reports and other tangible manifestations of the Proprietary
Information and Other Proprietary Assets (and all copies thereof), that Employee
may then (or thereafter) possess or have under the Employee's control.
(b) EXCEPTIONS. The Employee's undertakings and obligations under
this Section 6 will not apply to any Proprietary Information or Other
Proprietary Asset which (i) is or becomes generally known to the public through
no action on the part of the Employee, (ii) is generally disclosed to third
parties by the Company without restriction on such third parties, (iii) is
approved for release by written authorization of the Board, or (iv) is the
subject matter of a lawful request or subpoena by and within the authority of a
court or governmental agency or other body, provided, however, no such
information shall be released by Employee without
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Employee providing to the Company thirty (30) days prior written notice to the
Company and providing the Company the right to seek a protective order or
injunctive relief preventing the release of such information.
7. NON-SOLICITATION. The Employee hereby covenants and agrees that,
if the Employee's employment with the Company is terminated other than (i) by
the Company pursuant to Sections 9(b) or 9(g) or (ii) by the Employee pursuant
to Sections 9(d) or 9(g), the Employee will not, during the period from the
Termination Date through the Expiration Date, induce or attempt to induce any
officer, employee, agent, consultant or customers of the Company or its
subsidiaries to discontinue such affiliation with the Company or its
subsidiaries or to refrain from entering into new business relationships with
the Company or its subsidiaries.
8. SPECIFIC PERFORMANCE. Without intending to limit the remedies
available to the Company, the Employee agrees that damages at law will be an
insufficient remedy to the Company in the event that the Employee violates the
terms of Section 5, 6 or 7 of this Agreement and that the Company may apply for
and obtain immediate injunctive relief in any court of competent jurisdiction or
restrain the breach or threatened breach of, or otherwise to specifically
enforce, any of the agreements and covenants contained in such Sections. The
parties hereto understand that each of the agreements and covenants of the
Employee contained in Sections 5, 6 and 7 of this Agreement is an essential
element of this Agreement and agree that the obligations of the Employee
thereunder will survive the termination of this Agreement.
9. TERMINATION.
(a) TERMINATION BY THE COMPANY FOR GOOD CAUSE. The Company may
terminate this Agreement and its obligations to the Employee under this
Agreement at any time for "Good Cause", which shall mean only (i) the conviction
of the Employee of (or the plea by the Employee of NOLO CONTENDERE to) a felony,
(ii) the good faith determination by the Board that the Employee has willfully
and deliberately failed to perform a material amount of Employee's duties under
this Agreement (other than a failure to perform duties resulting from the
Employee's incapacity due to physical or mental illness), which failure to
perform duties shall not have been cured within thirty (30) days after the
receipt by the Employee of written notice thereof from the Board specifying with
reasonable particularity such alleged failure; (iii) any absence from the
Company's regular full-time employment in excess of THREE consecutive DAYS that
is not due to a vacation, participation in a permitted activity, bona fide
illness, disability, death or other reason expressly authorized by the Board in
advance; or (iv) any act or acts of personal dishonesty (including, without
limitation, any xxxxxxx xxxxxxx or unauthorized trading in the Company's
securities) by the Employee which HAVE A MATERIAL ADVERSE EFFECT ON THE Company
or any of its subsidiaries. In the event of such termination, the Employee shall
only be entitled to receive any accrued but unpaid sick pay and any properly
incurred unreimbursed expenses. In addition, if the Company terminates this
Agreement due to the conviction of the Employee of (or the plea by the Employee
of NOLO CONTENDERE to) a felony as a result of (iv) above, then Employee will
pay all costs and expenses (including reasonable attorney's fees) incurred by
the Company in connection therewith.
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(b) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE. In the event the
Company terminates this Agreement without Good Cause, the Employee shall be
entitled to the following benefits:
(i) The Company shall continue to pay the Employee the
Employee's Base Salary at the rate then in effect (plus any cost of living
adjustments as described above) until the later of (x) one year after the
Termination Date, or (y) the Expiration Date; and
(ii) The Company shall pay the Employee for any accrued but
unpaid sick pay and any properly incurred unreimbursed expenses.
In the event that the Employee shall obtain other full-time or
part-time employment or consulting work during such period, the amount of
payments Employee receives from such employment or work shall be credited
against the amount that the Company is obligated to pay Employee during such
period pursuant to this subparagraph (b). The Employee shall be under no
obligation to obtain such other employment or work, but if the Employee shall,
the Employee shall promptly give written notice to the Company of the salary and
fringe benefits provided to the Employee in connection with such other
employment or work, in order that the amount of such credit may be determined.
(c) TERMINATION BY THE EMPLOYEE WITHOUT CAUSE. Notwithstanding the
provisions of Section 1, the Employee may resign from the Company at any time
upon ninety (90) days prior written notice to the Company. In the event of
resignation by the Employee under this Section 9(c), the Board in its sole
discretion may elect to waive the period of notice, or any portion thereof, and,
in such event, the Company will pay the Employee's salary for the notice period
(or for any remaining portion of the period) provided the Employee continues to
be employed during that period. From and after the effective date of such
termination by the Employee of Employee's employment under this Agreement, the
Company shall have no further liability to the Employee for salary or other
compensation (or benefits, except for any accrued but unpaid sick pay, any
properly incurred unreimbursed expenses and as provided pursuant to the terms of
any compensation or benefit plan of the Company in which the Employee is a
participant) or other matters whatsoever.
(d) TERMINATION BY THE EMPLOYEE FOLLOWING LOSS OF BOARD SEAT.
Notwithstanding Section 9(c) above, if the Employee resigns from the Company
within ninety (90) days after being removed from, or not re-elected to, the
Board despite the Employee's efforts to remain on the Board (unless the Employee
is removed from, or not re-elected to, the Board for Good Cause as defined in
Section 9(a)), such resignation shall be treated as a termination by the
Employee pursuant to this Section 9(d) rather than Section 9(c), and the
Employee shall be entitled to the following benefits:
(i) The Company shall continue to pay the Employee the
Employee's Base Salary at the rate then in effect (plus cost of living
adjustments) until the later of (x) one year after the Termination Date or (y)
the Expiration Date; and
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(ii) The Company shall pay the Employee for any accrued but
unpaid sick pay and any properly incurred unreimbursed expenses.
In the event that the Employee shall obtain other full-time or
part-time employment or consulting work during such period, the amount of
payments Employee receives from such employment or work shall be credited
against the amount that the Company is obligated to pay Employee during such
period pursuant to this subparagraph (d). The Employee shall be under no
obligation to obtain such other employment or work, but if the Employee shall,
the Employee shall promptly give written notice to the Company of the salary and
fringe benefits provided to the Employee in connection with such other
employment or work, in order that the amount of such credit may be determined.
(e) TERMINATION UPON DISABILITY OF EMPLOYEE. This Agreement shall
terminate upon the disability (resulting from the Employee's inability, due to
an injury, physical or mental illness, disease or infirmity due to age, to
perform his duties under this Agreement on a full-time basis for two consecutive
months or an aggregate of 60 days within a one-year period, as certified by at
least two (2) duly licensed and qualified physicians, one of whom will be
approved by the independent members of the Board) of the Employee, which is
likely to continue for at least one year from the time of inception, in which
event the Employee shall be entitled to receive, in full satisfaction of all
obligations due to the Employee by the Company under this Agreement, (i) his
Base Salary then in effect (plus any cost of living adjustments as described
above) while such disability continues until the date upon which the disability
benefits pursuant to the disability insurance policy provided for in Section
3(e) commence (but in no event more than two months); (ii) the proceeds of such
disability policy; and (iii) any accrued but unpaid sick pay and any properly
incurred unreimbursed expenses.
(f) TERMINATION UPON DEATH OF EMPLOYEE. This Agreement shall
terminate upon the death of the Employee, in which event the Employee's estate,
legal representatives or designee shall be entitled to receive, in full
satisfaction of all obligations due to the Employee by the Company hereunder,
(i) the Employee's Base Salary through the last day of the month of death; (ii)
the proceeds of the insurance policy or policies maintained on the Employee's
life, pursuant to Section 3(e) hereof; and (iii) any accrued by unpaid sick pay
and any properly incurred unreimbursed expenses.
(g) TERMINATION BY THE COMPANY FOLLOWING CHANGE OF CONTROL.
Notwithstanding Sections 9(b), 9(c) and 9(d) above, in the event that, at any
time within 90 days following a Change of Control (as hereinafter defined),
either (i) the Company shall terminate the Employee's employment without Good
Cause as defined in Section 9(a) or (ii) the Employee shall terminate the
Employee's employment without there being a Good Cause termination by the
Company pending, then and in either such event, such termination shall be
treated as a termination pursuant to this Section 9(g) rather than Section 9(b),
9(c) or 9(d), as the case may be, and the Employee shall be entitled to receive
until the later of (A) two (2) years after the Termination Date or (B) the
Expiration Date, his Base Salary at the rate then in effect (plus cost of living
adjustments as provided above). The Employee shall also be paid any accrued
vacation
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pay to the date of such termination for the applicable year only, and
any sick leave for appropriate sick day absences then accrued but unpaid or
unpaid expense reimbursements that may then be properly due. The amounts payable
to the Employee shall not be subject to any credit or set-off resulting from the
obtaining of any part-time or full-time employment or consulting assignments by
the Employee during such period.
For purposes of this Agreement, a "Change of Control" shall mean and
include any of the following (for which the Employee did not promote the
transaction or vote as a director or as a shareholder):
(i) a merger or consolidation of the Company with or into any
other corporation or other business entity (except one in which the holders of
capital stock of the Company immediately prior to such merger or consolidation
continue to hold at least a majority of the outstanding securities having the
right to vote in an election of the Board of Directors ("Voting Stock") of the
surviving corporation);
(ii) a sale, lease, exchange or other transfer (in one
transaction or a related series of transactions) of all or substantially all of
the Company's assets except in a transaction where the Employee or an Affiliate
of the Employee is the transferee;
(iii) the acquisition by any person or any group of persons
(other than the Company, any of its direct or indirect subsidiaries, or any
director, trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its direct or
indirect subsidiaries) acting together in any transaction or related series of
transactions, of such number of shares of the Company's Voting Stock as causes
such person, or group of persons, to own beneficially, directly or indirectly,
as of the time immediately after such transaction or series of transactions, 50%
or more of the combined voting power of the Voting Stock of the Company other
than as a result of an acquisition of securities directly from the Company, or
solely as a result of an acquisition of securities by the Company which by
reducing the number of shares of the Voting Stock outstanding increases the
proportionate voting power represented by the Voting Stock owned by any such
person to 50% or more of the combined voting power of such Voting Stock; and
(iv) a change in the composition of the Company's Board of
Directors following a tender offer or proxy contest, as a result of which
persons who, immediately prior to such tender offer or proxy contest,
constituted the Company's Board of Directors shall cease to constitute at least
a majority of the members of the Board of Directors (other than by their
voluntary resignations), but only in the event that the persons elected to the
Board were not supported by the Employee as a director or shareholder.
10. INDEMNIFICATION. To the fullest extent permitted by law and in
addition to any other rights permitted or granted under the Company's articles
of incorporation, by-laws, or any policy of insurance, or by law, the Company
shall indemnify the Employee if the Employee is made a party, or threatened to
be made a party, to any threatened, pending or contemplated action, suit or
proceeding, whether civil, administrative or investigative, by reason of the
fact that
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the Employee is or was an employee, officer or director of the Company or any
subsidiary of the Company, in which capacity the Employee is or was serving at
the Company's request in accordance with the terms of this Agreement, against
any and all costs, losses, damages, judgments, liabilities and expenses
(including reasonable attorneys' fees) which may be suffered or incurred by him
in connection with any such action, suit or proceeding; provided, however, that,
there shall be no indemnification in relation to matters as to which the
Employee is adjudged to have been guilty of fraud, bad faith, gross negligence,
breach of fiduciary duty or as a result of the Employee's material breach of
this Agreement; and provided, however, that all of such costs shall be paid by
insurance, to the extent such coverage exists.
11. ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement is the
entire agreement between the parties with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous oral and prior written
agreements and understandings. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution of this Agreement or in effect among
the parties. No custom or trade usage, nor course of conduct among the parties,
shall be relied upon to vary the terms of this Agreement. This Agreement may not
be amended, and no provision of this Agreement shall be waived, except by
writing signed by all the parties to this Agreement, which states that it is
intended to amend or waive a specifically identified provision of this
Agreement. Any waiver of any rights or failure to act in a specific instance
shall relate only to such instance and shall not be construed as an agreement to
waive any rights or fail to act in any other instance, whether or not similar.
All amendments or waivers on behalf of the Company shall have first been
approved by the non-employee members of the Board.
12. SEVERABILITY. Should any provision of this Agreement be
unenforceable or prohibited by any applicable law, this Agreement shall be
considered divisible as to such provision which shall be inoperative, and the
remainder of this Agreement shall be valid and binding as though such provision
were not included in this Agreement.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original. It shall not be
necessary when making proof of this Agreement to account for more than one
counterpart.
14. HEADINGS. All headings in this Agreement are for convenience only
and shall not affect the meaning of any provision in this Agreement.
15. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of, and be binding upon, the Company and any corporation with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets, and upon the Employee and his executors, administrators, heirs and
legal representatives. This Agreement may not be assigned by the Employee.
16. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York, without reference to the
conflict of laws principles thereof.
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17. NOTICES. All notices under this Agreement shall be in writing and
shall be sent to the parties at the following addresses:
If to the Employee, to: Xxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
If to the Company, to: Hanover Capital Mortgage Holdings, Inc.
00 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chairman of Compensation Committee of the
Board of Directors
All notices shall be delivered in person or given by registered or certified
mail, postage prepaid, and shall be deemed to have been given when delivered in
person or deposited in the United States mail. Either party may designate any
other address to which notice shall be given, by giving written notice to the
other of such change of address in the manner herein provided.
IN WITNESS WHEREOF, the Employee has executed this Agreement and the
Company has caused this Agreement to be executed by a duly authorized officer as
of the day and year first above written.
COMPANY:
HANOVER CAPITAL MORTGAGE HOLDINGS,
INC.
By:____________________________________
Name:
Title:
EMPLOYEE:
_______________________________________
Xxxx X. Xxxxxxxx
11
