EXHIBIT 10.11
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT by and between Ocwen Technology Xchange, a
Florida corporation, with its principal office at 0000 Xxxx Xxxxx Xxxxx Xxxx.,
Xxxx Xxxx Xxxxx, Xxxxxxx 00000 (the "Company"), and Xxxx Xxxxx, residing at 0000
Xxxxxxxxxxx Xxxxx; Xxxxxxxx Xxxxx, Xxxxxxx 00000 ("Executive").
WITNESSETH:
WHEREAS, Executive is to be employed by the Company;
WHEREAS, the Company is engaged in the development and marketing
of advanced software and integrated technology solutions for the mortgage and
real estate industries; and
WHEREAS, Executive desires to perform services for the Company
and the Company desires to engage Executive to perform services in accordance
with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
parties agree as follows:
Section 1. Employment. Company hereby agrees to employ the
Executive's exclusive services subject to the terms and provisions of this
Agreement and subject to the terms and provisions of the Company's Management
Directives and Policies and Procedures set forth in Company's Employee
Guidebook, as the same may be modified or amended by Company from time to time
in Company's sole discretion (the "Guidebook"). Executive will occupy the
position of Executive Vice President and National Sales Manager.
Section 2. Duties.
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(a) Executive will have such duties as are incumbent in his
position and as otherwise specified from time to time by
Company, all subject to the direction and supervision of
the CEO of Company, to whom the Executive shall report,
and the Board of Directors of Company. Executive will
devote his full business time and effort to performing his
duties and obligations hereunder. Executive agrees that he
will at all times be bound by and comply with the terms
and provisions of the Guidebook.
(b) Executive acknowledges that he owes Company a fiduciary
duty pursuant to the terms of this Agreement. Therefore,
Executive agrees that he will perform his duties and
obligations hereunder in a diligent, careful, thorough and
professional manner consistent with good business practice
and will at all times (i) endeavor to provide to Company
the most sound and reasonable recommendations and advice
and (ii) fully promote the business and interests of
Company. Executive agrees that Executive will promptly
disclose to Company the existence of any activities or
other circumstances which result in or may hereunder, and
Executive will make such other disclosures relating to
Executive's business activities as Company may reasonably
request from time to time. Except as is otherwise provided
herein, Executive shall not render any services of a
commercial or professional nature to any other person or
organization, whether for compensation or otherwise,
without the prior written consent of the CEO of Company.
(c) All fiends and/or property received by Executive on behalf
of Company or any parent or affiliated corporation,
subsidiary or division (collectively, the "Affiliates" or
"Company's Affiliates") will be received and held by
Executive in trust, and Executive will promptly account
for and remit all such fiends and/or property to Company.
Section 3. Compensation. During the tern of this Agreement as defined
in Section 4, the Company agrees to pay Executive compensation for the services
of Executive as follows:
(a) Base Salary. In exchange for Executive's ongoing
performance of his duties and obligations under this
Agreement, Company will pay to Executive a salary (the
"Base Salary") at the rate of Two Hundred Fifty Thousand
Dollars ($250,000) per calendar year, less applicable
payroll taxes and authorized deductions. The Base Salary
will increase to Two Hundred Sixty Two Thousand Five
Hundred Dollars ($262,500) on the first anniversary of the
Effective Date, and will further increase to Two Hundred
Seventy Five Thousand Six Hundred Twenty Five Dollars
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($275,625) on the second anniversary of the Effective
Date. The Base Salary will be payable biweekly on the
regularly recurring pay dates established from time to
time by Company and in accordance with Company's customary
practices, as the same may be changed by Company from time
to time.
(b) Bonus. The Board shall establish a performance-based
annual bonus plan with targets and objectives approved by
the Board (the "Performance Bonus Plan") with a target
bonus of $350,000. Bonus payments shall be paid in
accordance with the payment structure specified in the
1998 Annual Incentive Plan of Ocwen Financial Corporation,
as amended from time to time. In any event, the
compensation to Executive under the Performance Bonus Plan
for the first twelve months of this Agreement shall be
payable in equal monthly installments not less than (i)
$29,166 per month for the first six months of this
Agreement and (ii) $14,583 per month for the second six
months of this Agreement, payable at Executives option in
either cash or options to purchase shares of Common Stock
in Ocwen Financial Corporation.
(c) Sign-on Bonus. The Company agrees to pay Executive a
sign-on bonus of $75,000, payable by check on the closing
of the purchase of Executive's permanent residence in Palm
Beach County, Florida by Executive.
(d) COBRA Reimbursement. Beginning on the Effective Date, the
Company agrees to reimburse Executive for up to ninety
(90) days of health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act (COBRA).
(e) Stock Options. Subject to the approval by the Board of
Directors of Company and its subsidiaries, Executive and
Company will enter into an agreement by which Company
grants to Executive an option to purchase up to one
percent 1 % of the outstanding shares of the common stock
of Company on the date of their initial public offering
("IPO") for a purchase price per share equal to (i) $1.00
if the TPO price per share is $12 or more or (ii) $0.10 if
the IPO price per share is less than $12. The term of the
option WILL begin on the date of the IPO and will continue
for a period of ten (10) years unless earlier terminated
as provided in the Option Agreement between OTX and
Executive. The option will vest and become exercisable in
four pro-rata increments beginning on the date of the IPO
and ending on the fourth anniversary of the date of the
1P0. Vesting shall be accelerated in the event that
Executive retires after 5 or more years of service to the
Company such that all options will vest on the date of
retirement, and Executive will have sixty (60) days
thereafter to exercise. The Options WILL be subject to
such other standard terms and conditions placed on Options
to purchase shares in OTX as determined by the Board of
Directors in its sole discretion.
(f) Sale of OTX. In the event that, during the period in which
Executive is employed by Company pursuant to this
Agreement and prior to the IPO, Ocwen Financial
Corporation ("Ocwen") sells all of its interest in OTX or
all of the assets of OTX to an unaffiliated third party (a
"Sale"), Executive shall be entitled to receive
compensation (the "Sale Compensation") in an amount equal
to one percent (1%) of the Aggregate Consideration
received by the Company in the Sale minus the sum of (i)
$200 million and (ii) any consideration paid by the
Company or Ocwen in connection with the acquisition of
stock or assets of another entity for the benefit of the
Company. For purposes of this Section 3(f), "Aggregate
Consideration" shall mean the total, net of expenses, of
all cash and other property paid and any indebtedness
assumed or repaid by a buyer. In the event the Aggregate
Compensation for the Sale is cash, then Executive shall
receive the Sale Compensation in cash. In the event the
Aggregate Consideration for the Sale is in the form of
shares of stock in the acquiring company or other
property, then Executive shall receive the Sale
Compensation in the form of shares in the acquiring
company or other property. In the event the Aggregate
Consideration for the Sale is a combination of both cash
and shares of stock in the acquiring company or other
property, then Executive shall receive the Sale
Compensation in cash and shares of stock in the acquiring
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company or other property, in the same proportion as was
paid for the purchase of OTX.
(g) The provisions of Sections 3(e) and 3(f) are mutually
exclusive. The payment to Executive of additional
compensation under one of Sections 3(e) and 3(f) shall
terminate the right of Executive to receive additional
compensation pursuant to this Section 3.
Section 4. Term and Termination. The term of this Agreement (the
"Term") shall be for three years commencing on August 1, 2001 (the "Effective
Date") and ending on August 1, 2004 (the "Expiration Date") unless earlier
terminated upon the occurrence of any of the following events:
(a) Company may terminate this Agreement effective upon
written notice to Executive prior to its expiration date
for Just Cause or due to Executive's death or substantial
physical or mental impairment which Company has determined
prevents Executive from performing his duties and
responsibilities as set forth herein. For purposes of this
Section, "Just Cause" is defined as a violation of
Section(s) 2, 7, 8, 9, 10 or 11 of this Agreement, fraud,
misappropriation of funds, embezzlement, theft, physical
assault on another person, drunkenness on the job,
possession or use of narcotics on Company's property,
willful and material damage to Company's property,
conviction of a felony, or repeated or material violations
of Company's policies.
(b) In the event Company terminates this Agreement without
just cause, Company shall pay Executive twelve (12) months
of Base Salary and, in the event the termination occurs
after any person or entity acquires through purchase,
merger or otherwise fifty percent (50%) or more of the
combined voting power of the Company's then outstanding
voting securities, all stock options issued to Executive
pursuant to this Agreement shall be automatically vested
also.
(c) Executive may terminate this Agreement without Good Reason
upon ninety (90) days prior written notice of his
intention to terminate.
(d) Executive shall be entitled to terminate this Agreement
for Good Reason by written notice given within ninety (90)
days after the occurrence of the Good Reason event, unless
such circumstances are fully corrected prior to the date
of termination specified in the written notice of
termination for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean the occurrence,
without Executive's express written consent, of any of the
following circumstances: (i) any material diminution of
Executive's positions, duties or responsibilities
hereunder (except in each case in connection with the
termination of Executive's employment for Just Cause or as
a result of Executive's death or disability, or
temporarily as a result of Executive's illness or other
absence); (ii) removal of, or the non-reelection of,
Executive from officer positions with OTX or its
subsidiaries as specified herein without election to a
higher position or removal of Executive from any of his
then officer positions; or (iii) any material breach by
the Company of any provision of this Agreement.
(e) Except as specifically provided in this Section 4, (i)
upon termination of this Agreement, Company will have no
further obligation to Executive, except with respect to
compensation accrued hereunder and unpaid at the date of
such termination and (ii) the terms and provisions of
Sections 4, 8, 9, 10, and 13 of this Agreement shall
indefinitely survive the expiration or termination of this
Agreement.
Section 5. Employee Benefits and Vacation. During the Term, Executive
shall be entitled to participate in all benefit plans and arrangements and
fringe benefits and perquisite programs generally provided to comparable senior
executives of the Company, including, without limitation, participation in a 401
(k) plan, participation in a deferred compensation option plan, life, health,
and disability insurance, and retiree health coverage. Executive shall be
entitled to vacation, sick days and personal days in accordance with Company
policy as such may be in effect from time to time; provided that in no event
shall Executive be entitled to less than four (4) weeks paid vacation per
calendar year:
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Section 6. Relocation. The Company shall reimburse Executive for all
reasonable expenses and costs associated with relocating his family to the West
Palm Beach area in accordance with the Company's Corporate Relocation Guide. In
addition, the Company shall provide Executive with up to six (6) months of
temporary housing at a location to be approved by Ocwen.
Section 7. Exclusive Representation. Executive hereby agrees that
during the Term, Executive shall not, directly or indirectly, perform any
services similar to his duties and obligations under this Agreement, own an
interest in (except for Alltel common stock owned prior to the date of this
Agreement or acquired pursuant to options granted prior to the date of this
Agreement), operate, join, control, or participate in, or be connected as an
officer, employee, agent, independent contractor, partner, shareholder or
principal of any corporation, partnership, proprietorship, firm, association,
person, or other entity producing, designing, providing, soliciting orders for,
selling, distributing, or marketing products, goods, equipment, or services that
compete directly or indirectly with Company's products and services or Company's
business, without first obtaining the written approval of Company. Such approval
may be rescinded by Company if and when, in the opinion of Company, such
activities materially inhibit Executive's performance under this Agreement or
place Company at risk. Any breach or threatened breach of the terms of this
Section shall constitute cause for the termination of Executive's employment
hereunder notwithstanding any other term, provision or definition contained in
this Agreement, and Company will have no further obligation to Executive. The
terms and provisions of Sections 4, 8, 9, 10 and 13 of this Agreement shall
survive the expiration or termination of this Agreement.
Section 8. Company Information. All information, materials or
documents in any way regarding or relating to Company or the Company's
Affiliates or their respective businesses including, without limitation, all
Developments (as defined below), all information requested by or provided to
Executive and all information learned or obtained by Executive (i) will be and
at all times remain the sole and exclusive property of Company, (ii) will not be
used by Executive for any reason or purpose except in direct connection with
Executive's performance of his duties and obligations under this Agreement and
(iii) will not, without the express prior written consent and approval of
Company, be disclosed in whole or in part to any person or entity except in
direct connection with Executive's performance of his duties and obligations
under this Agreement. Executive acknowledges that money damages would be an
inadequate remedy for the injuries and damage that would be suffered by Company
in the case of Executive's breach of this Section. The breach or threatened
breach by Executive of the provisions of this Section shall entitle Company,
besides any other remedies it may have at law or in equity, to injunctive relief
to enforce the provisions of this Section. Executive's duties and obligations
under this Section will survive the termination or expiration of this Agreement.
In recognition of the foregoing obligations, Executive agrees that upon his
separation from the Company, he will turn over to Company all records, files,
drawings, documents, specifications, blueprints, letters, notes, reports and
computer software, and all transcriptions thereof relating to Company or the
Company's Affiliates which are in his possession or under his control. At the
time of termination, Executive will have an exit interview with Company wherein
Executive will certify that Executive has returned to Company all tangible
Confidential Information disclosed to him, and disclose all Developments, as
defined below, conceived or developed by him during the Term. Executive's
liability for any breach of this Section will not be subject to any limitation
of liability provision contained elsewhere in this Agreement.
Executive has carefully read and considered the provisions of this Section, and
having done so, agrees that the restrictions set forth in this section are fair
and reasonably required for the protection of the interests of the Company.
Section 9. Rights in Data. Executive hereby expressly assigns to
Company all of Executive's right, title and interest in and to all work product
produced by Executive during the Term including, without limitation, all
systems, reports, data, materials, ideas, concepts, methodologies, know-how,
information, knowledge, software, designs, specifications, plans, programs,
studies, techniques, procedures, methods, processes, formulae, inventions,
improvements, sketches, reports, diagrams, graphs, charts, notes, writings,
discoveries, models, flow charts and research, including without limitation all
patent, copyright, trademark, trade secret, design and other proprietary rights
that may now or in the future exist therein or be appurtenant thereto, whether
in oral, written, graphic, electronic, machine readable or any other form and in
whatsoever medium now known or hereafter developed, and all copies of the
foregoing and all information, data and knowledge, incorporating, based upon or
derived from the foregoing (collectively, "Developments"). All Developments will
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be and at all times remain the sole and exclusive property of Company. In the
event that Executive is ever deemed, by operation of law or otherwise, to retain
any rights in or to any Developments, Executive will assign all of Executive's
right, title and interest in and to such Developments to Company. Executive will
execute any documents of assignment or registration of proprietary or other
rights requested by Company and will perform any and all further acts deemed
necessary or desirable by Company in order to confirm, exploit, or enforce the
rights herein granted and assigned by Executive to Company. Executive's duties
and obligations under this Section will survive the termination or expiration of
this Agreement. Executive's liability for any breach of this Section will not be
subject to any limitation of liability provision contained elsewhere in this
Agreement. Executive has signed an Intellectual Property Agreement in favor of
Ocwen Financial Corporation and its affiliates in consideration for Executive's
employment by Company.
Section 10. Covenant Not to Compete.
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(a) Executive acknowledges that, in consideration of his
employment, and to induce Company to allow Executive
access to confidential information and Company's clients,
customers and others with whom Company has formed valuable
business arrangements, he will not, during such time as
Executive is employed by Company and for a period of one
(1) year after expiration or termination of Executive's
employment, or, if later, termination or expiration of a
subsequent consulting arrangement, regardless of whether
Executive caused said termination; (provided, however,
this Section 10 shall apply only if the provisions of
Section 4 above are applicable):
(i) In the event of voluntary termination by
Executive, directly or indirectly, perform any
services similar to his duties and obligations
under this Agreement, own an interest in, operate,
join, control, or participate in, or be connected
as an officer, employee, agent, independent
contractor, partner, shareholder or principal of
any corporation, partnership, proprietorship, firm,
association, person, or other entity producing,
designing, providing, soliciting orders for,
selling, distributing, or marketing products,
goods, equipment, or services that compete directly
or indirectly with Company's products and services
or Company's business, without first obtaining the
written approval of the Company;
(ii) Take any action that would interfere with,
diminish or impair the valuable relationships that
Company and/or Company's Affiliates have with its
or their customers and clients and others with
which Company and/or Company's Affiliates have
business relationships or to which its services are
rendered;
(iii) Directly or indirectly, for his own benefit
or for the benefit of any other person (whether as
an officer, director, owner, partner, investor,
consultant, employee, agent, manager, or other
participant in any business or venture) divert,
solicit or attempt to divert or solicit any of
Company's customers or patrons with respect to
products or services offered by Company.
(iv) Recruit or otherwise solicit, induce or
influence any person (natural or otherwise) who is
or becomes an employee or consultant of the Company
or the Company's Affiliates to terminate his or her
employment with, or otherwise cease his
relationship with, Company or the Company's
Affiliates or hire any such employee or consultant
who has left the employ of Company or the Company's
Affiliates within two (2) years after the
termination or expiration of such employee's or
consultant's employment with Company or the
Company's Affiliates, as the case may be; or
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(v) Assist with others in engaging in any of the
foregoing.
(b) It is acknowledged and agreed by Executive that Company
and its Affiliates have a legitimate business interest
justifying the restrictions contained herein and that such
restrictions are reasonably necessary to protect such
legitimate business interests, which interests, including,
without limitation, trade secrets; other valuable
confidential business information, including but not
limited to the information set forth in Sections 6 and 7,
that may not qualify as trade secrets, but as to which
Company and its Affiliates have expended time and money in
developing and as to which they hold confidential and
proprietary; substantial business relationships with
existing and prospective customers, clients and others
with whom Company and its Affiliates have formed valuable
relationships; customer and client goodwill associated
with the ongoing business of Company and its Affiliates
and evidenced by the various trademarks, trade names,
service marks and trade dress used by Company and its
Affiliates in connection with their businesses, and an
expectation of continuing patronage from their existing
customers, clients and others with whom Company and its
Affiliates have formed valuable business relationships.
(c) Executive acknowledges and agrees that, in the event of a
breach or threatened breach of any of the terms of this
Section, Company and/or the Company's Affiliates, as the
case may be, would suffer irreparable harm for which
monetary damages would be inadequate. Accordingly, in
addition to any other remedies available, at law or in
equity, in the event of a breach or threatened breach by
the Executive of the provisions of this Section, Company
and/or the Company's Affiliates shall be entitled to seek
an injunction restraining Executive from such breach or to
seek specific performance of the terms hereof. The 1-year
period mentioned above shall be tolled for any period(s)
of violation or period(s) of time required for litigation
to enforce the covenants herein. In addition, any breach
or threatened breach of any of the terns of this Section
which is not cured within thirty (30) days of receipt of a
written notice from the Board or the Chairman of the Board
which specifically identifies such purported breach or
threatened breach by Executive shall constitute cause for
the termination of Executive's employment hereunder
notwithstanding any other term, provision or definition
contained in this Agreement.
(d) The provisions of this Section shall survive any
termination or expiration of this Agreement.
(e) Executive has carefully read and considered the provisions
of this Section, and having done so, agrees that the
restrictions set forth in this Section (including, but not
limited to, the time period of the restrictions) are fair
and reasonable and are reasonably required for the
protection of the interests of Company.
Section 11. Representations. Executive represents and warrants to
Company that (i) the execution, delivery and performance of this Agreement by
Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order judgement or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by any employment agreement, noncompetition agreement or
confidentiality agreement with any other person or entity that has not been
previously disclosed in writing to Company and (iii) Executive is not in
possession of any property of his former employer, Alltel, including but not
limited to any of Alltel's confidential, proprietary and trade secrets (iv) upon
the execution and delivery of this Agreement by Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive acknowledges that in the event any of the representations
made by him in this Agreement are determined to be false, such false
representation shall constitute Just Cause for his termination. In the event
Alltel should bring legal action against Executive contending a breach of a
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covenant not to compete or other basis why Company should not employ him, so
long as the above representations of Executive are true, Company agrees to pay
all reasonable legal fees and costs associated with Executive's defense of such
legal action. Counsel utilized for such defense of Executive shall be subject to
approval of Company.
Section 12. Notices. No notice or other communication will be deemed
given unless sent in any of the manners, and to the persons, specified in this
Section. All notices and other communications hereunder will be in writing and
will be deemed given (a) upon receipt if delivered personally (unless subject to
clause (b)) or if mailed by registered or certified mail, (b) at noon on the
date after dispatch if sent by overnight courier or (c) upon the completion of
transmission (which is confirmed by telephone or by a statement generated by the
transmitting machine) if transmitted by telecopy or other means of facsimile
which provides immediate or near immediate transmission to compatible equipment
in the possession of the recipient, in any case to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy number for a
party as will be specified by like notice):
If to Company: Ocwen Technology Xchange, Inc.
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Secretary
Telecopy Number: (000) 000-0000
Confirmation Number: (000) 000-0000
If to Executive: Xxxx Xxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, XX 00000
Telecopy Number:
Confirmation Number:
Section 13. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Florida without reference to principles of conflict of
laws.
(b) Entire Agreement/Amendments. This Agreement and the
instruments contemplated herein contain the entire
understanding of the parties with respect to the
employment of Executive by the Company from and after the
Commencement Date and supersedes any prior agreements
between the Company and Executive. There are no
restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth
herein and therein. This Agreement may not be altered,
modified, or amended except by written instrument signed
by the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion
shall not be considered a waiver of such party's rights or
deprive such party of the right thereafter to insist upon
strict adherence to that term or any other tern of this
Agreement. Any such waiver must be in writing and signed
by Executive or an authorized officer of the Company, as
the case may be.
(d) Assignment. This Agreement shall not be assignable by
Executive. This Agreement shall be assignable by the
Company only to an acquirer of all or substantially all of
the assets of the Company, provided such acquirer promptly
assumes all of the obligations hereunder of the Company in
a writing delivered to Executive and otherwise complies
with the provisions hereof with regard to such assumption.
(e) Successors; Binding Agreement; Third Party Beneficiaries
This Agreement shall inure to the benefit of and be
binding upon the personal or legal representatives,
executors, administrators, successors, heirs,
distributees, devisees legatees and permitted assignees of
the parties hereto.
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(f) Withholding Taxes. The Company may withhold from any and
all amounts payable under this Agreement such Federal,
state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.
(g) Counterparts This Agreement may be signed in counterparts,
each of which -shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same
instrument.
(h) Heading. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed
to control or affect the meaning or construction of any
provision of this Agreement.
(i) Consequential Damages. EXCEPT WITH RESPECT TO EXECUTIVE'S
OBLIGATIONS SET FORTH IN SECTIONS 8, 9 and 10 OF THIS
AGREEMENT, UNDER NO CIRCUMSTANCES WILL EITHER PARTY TO
THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES,
WHETHER OR NOT SUCH DAMAGES ARE CAUSED BY THE FAULT OR
NEGLIGENCE OF SUCH PARTY AND WHETHER OR NOT SUCH PARTY IS
NOTIFIED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
OCWEN TECHNOLOGY XCHANGE, INC.
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
/s/ XXXX XXXXX
-----------------------------------
Xxxx Xxxxx
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