COMPILED AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.2
COMPILED
AMENDED AND RESTATED
COMPILED
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this Agreement) made as of the 5th
day of June, 2008, amends and restates the Employment Agreement dated the 5th
day of May 1989, as amended and restated through June 7, 2007, by and between
the Federal Agricultural Mortgage Corporation, a federally-chartered
instrumentality of the United States with its principal place of business at
0000 Xxxxxx-Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. (FAMC) and Xxxxx X. Xxxxxxx,
residing at ________________________________ (the Employee).
By this
Agreement, FAMC and the Employee agree as follows:
1. Employment. FAMC
employs the Employee, and the Employee accepts employment by FAMC upon the terms
and conditions set forth in this Agreement.
2. Term. The Term of this
Agreement shall continue until July 1, 2012 or any earlier effective date of
termination pursuant to Paragraph 9 hereof (the “Term”).1
3. Scope of Authority and
Employment.
(a) Scope of
Authority. The Employee shall be employed as an officer of
FAMC, with the title of President and Chief Executive Officer. The
Employee shall report directly to the Board of Directors of FAMC, and there
shall be no other employee of FAMC with equal or senior
authority. The Employee shall have responsibility for the
administrative and operational affairs of FAMC, as set forth in the Bylaws of
FAMC, subject to the general supervision and control of the Board of Directors
of FAMC. In addition, the Employee shall have those rights, duties,
responsibilities and authority normally reserved for officers with similar
positions of similarly situated companies, together with such other rights,
duties, responsibilities and authority as may be set forth in said
Bylaws.
(b) Full Time
Employment. The Employee shall devote his best efforts and
substantially all his time and endeavor to his duties hereunder, and shall not
engage in any other gainful occupation without the prior written consent of the
Board of Directors; provided, however, that this provision
shall not be construed to prevent the Employee from personally, and for his own
account or that of members of his immediate family, investing or trading in real
estate, stocks, bonds, securities, commodities, or other forms of investment, so
long as such investing or trading is not in conflict with the best interests of
FAMC.
(c) Place of
Employment. The Employee shall be employed to perform his
duties under this Agreement at the principal office of FAMC, which shall be
located in the Washington, D.C. metropolitan area. Notwithstanding
this, it is expected that the
Employee
shall be required to travel a reasonable amount of time in the performance of
his duties under this Agreement.
4. Compensation. FAMC will
pay to you the following aggregate compensation for all services rendered by you
under this Agreement:
(a) Base Salary. As of July
1, 2008, you will be paid a base salary (the Base Salary) during the Term of
Five Hundred Seventy Nine Thousand Nine Hundred and Thirty Dollars ($579,930)
per year, payable in arrears on a bi-weekly basis,2 and
(b) Incentive
Compensation. In addition to your Base Salary, you will be
paid an additional payment during the term of this Agreement in respect of work
performed by you during the preceding Planning Year (June 1 through May 31), or
portion thereof as follows: on June 1 of each year through and
including the effective date of termination, an additional payment in an amount
at the sole discretion of the Board of Directors if it determines that you have
performed in an extraordinary manner your duties, pursuant to business plans
proposed by management and approved by the Board of Directors, during the
preceding Planning Year.3
5. Expenses. FAMC
shall reimburse the Employee for his reasonable and necessary expenses incurred
in carrying out his duties under this Agreement, including, without limitation,
expenses for: travel; attending business meetings, conventions and
similar gatherings; home and portable telephone bills; business entertainment
and professional association dues. FAMC shall also reimburse the
Employee for club dues recommended by the Employee and approved by the Board of
Directors of FAMC. Reimbursement shall be made to the Employee within
ten (10) days after presentation to FAMC of an itemized accounting and
documentation of such expenses. The Employee shall use his best
efforts to notify the Board of Directors prior to incurring any such expenses of
an extraordinary or unusual nature.
6. Vacation and Sick
Leave. The Employee shall be entitled to four (4) weeks of
paid vacation per year, to be taken in spans not exceeding two (2) weeks
each. Vacation rights shall vest on June 10th of each year during the
Term, and must be exercised within fourteen (14) months thereafter or
forfeited.4 The Employee shall be entitled to
reasonable and customary amounts of sick leave.
7. Employee
Benefits. FAMC shall provide the Employee with all employee
benefits regularly provided to employees of FAMC, and the following other (or
upgraded) benefits: the best level of personal and family health
insurance provided by Blue Cross-Blue Shield; major medical insurance at the
best level offered by Aetna Insurance; personal and family dental and vision
insurance at the best level offered by Aetna Insurance; an annual
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4 Amended
by Amendment No. 7 dated January 4, 1998 added language modifying how
vacation was accrued; Amendment No. 13 dated August 3, 2004 removed that
amended language and reverted back to the language in the original
agreement.
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medical examination; business travel and personal
accident insurance; life insurance in the amount of one million dollars
($1,000,000); disability benefits at least equal to statutory benefits in the
State of New York; a plan to set aside before-tax income to pay for future
unreimbursed medical, dental, vision, and dependent day care expenses; a savings
plan established under Section 401(k) of the Internal Revenue Code; and an
indoor parking place for one automobile in close proximity to the offices of
FAMC. The providers of any insurance shall be selected by the
Employee and listed in Best’s Insurance Guide. All of the foregoing
is subject to the limitation that the total cost thereof will not exceed
twenty-five percent (25%) of your Base Salary, exclusive of administrative
expense.5 In the event that such cost
limitation would be exceeded in any year, the Employee shall select among the
foregoing a group of benefits within that cost limitation.
8. Relocation
Expenses. It is agreed between the parties that the Employee
will be required to relocate his residence from that stated in the first
paragraph of this Agreement to the Washington, D.C. metropolitan
area. FAMC will assume these expenses as follows:
(a) Moving
Expenses. FAMC will assume the reasonable costs of moving the
Employee’s household goods and personal property. FAMC will pay
directly for packing, crating, in-transit storage, and insurance costs in
connection with the move.
(b) Home Sale. FAMC will
reimburse the Employee for a competitive real estate broker commission
(estimated at seven percent (7%) of the sale price) incurred in selling his
current residence, together with normal and customary selling costs, including
applicable sales taxes and reasonable attorney’s fees.
(c) Home Purchase. FAMC
will reimburse the Employee for normal and customary closing costs of his new
residence: (i) in full, as to fixed costs that do not vary with the
price of the residence; and (ii) in a percentage equal to the sale price of the
Employee’s current residence divided by the purchase price of the Employee’s new
residence, as to costs that vary with the price of the new
residence. These costs shall include, without limitation, applicable
sales taxes, mortgage taxes, document recording fees, engineering inspection,
and reasonable attorney’s fees.
(d) Bridge Loan. In the
event that the Employee closes the sale of his new residence before closing the
sale of his current residence, FAMC on the date of closing of the sale of the
Employee’s new residence will, at its option, either:
(i) provide
an interest-free loan to the Employee; or
(ii) guarantee
and reimburse the Employee for the interest expense on a loan to the Employee by
a lender chosen by the Employee and acceptable to FAMC;
in an
amount equal to eighty percent (80%) of the value of the Employee’s current
residence, as estimated by a real estate broker chosen by the Employee for the
sale of that
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5 Amendment
No. 6 dated August 7, 1997.
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residence
and acceptable to FAMC. The entire amount of this loan shall be
repaid to FAMC or the lender by the Employee simultaneously with the closing of
the sale of his current residence, but in no event later than six (6) months
after the date of drawdown. FAMC or the lender may perfect a security
interest in the Employee’s current residence or the proceeds of its sale, or in
the Employee’s new residence, or both, at its own expense, and the Employee will
cooperate fully therein.
(e) Exploratory
Trips. FAMC will reimburse the Employee for his own and his
spouse’s expenses in making not more than four (4) two-day exploratory trips
from New York to Washington to secure a new residence, including travel, lodging
and meals.
(f) Temporary Living
Expenses. If the Employee precedes his family’s move to
Washington to begin work, FAMC will reimburse him for reasonable travel between
New York and Washington and living expenses for a period not to exceed ninety
(90) days.
(g) Adjustment for
Taxes. To the extent that any of the foregoing relocation
expenses are treated as wages for federal, state or local income tax purposes,
FAMC will “gross up” its reimbursement to the Employee so that the net amount of
reimbursement after tax will equal the actual amount of the reimbursement
required to be paid to the Employee. Likewise, FAMC will pay any
taxes imputed on the bridge loan described in preceding subsection
(d).
Reimbursement
of any of the foregoing Relocation Expenses incurred directly by the Employee
shall be made to the Employee within ten (10) days after presentation to FAMC of
an itemized accounting and documentation of such expenses.
9. Termination.
(a) Events of
Termination. This Agreement shall be terminated and the
employment relationship between the Employee and FAMC shall be severed as set
forth below:
(i) FAMC
may terminate the employment of the Employee effective upon notice to the
Employee if the Employee dies or is incapacitated or disabled by accident,
sickness or otherwise so as to render him (in the opinion of an independent
medical consultant on the full-time faculty of Georgetown University School of
Medicine) mentally or physically incapable of performing the services required
to be performed by him under the terms of this Agreement for a period of at
least ninety (90) consecutive days, or for ninety (90) days (whether consecutive
or not) during any six-month period.
(ii) FAMC
may terminate the employment of Employee effective upon notice to the Employee
at any time for “cause.” For the purposes of this subsection, “cause”
shall mean only: (A) the Employee’s willful misconduct with respect
to the business and affairs of FAMC; or (B) the Employee’s conviction for any
felony or any act involving fraud or moral turpitude in his conduct of the
business of FAMC. For purposes of this subsection, no act, or failure
to act on
your part, shall be
considered “willful” unless done, or omitted to be done, by you not in good
faith and without reasonable belief that your action or omission was in the best
interests of Xxxxxx Mac.6
Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy of
a resolution, duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board of Directors of FAMC at a
meeting of the Board of Directors duly called and held for the purpose (after
thirty (30) days’ prior written notice to the Employee and an opportunity for
him, together with his counsel, to be heard before such meeting of the Board,
finding that in the good faith opinion of the Board of Directors of FAMC the
Employee was guilty of conduct set forth above in clause (A) or (B) of this
Section 9(a)(ii) and specifying the particulars in detail. Such a
resolution shall constitute notice of termination hereunder.
(iii) Xxxxxx
Mac may terminate the employment of the Employee without “cause” at any
time.7 Such termination shall become
effective on the earlier of July 1, 2012 or two years from the date of notice of
such termination8;
(iv) Notwithstanding
the provisions of subsection 9(a)(iii) above, FAMC may terminate the employment
of the Employee at any time after the passage by the Board of Directors of FAMC
of a resolution authorizing the dissolution of FAMC. Such termination
of the Employee’s employment shall become effective on the later of eighteen
(18) months after notice of termination or the date that such dissolution of
FAMC becomes final as a matter of law, provided however, that
neither of the following shall be deemed to be a dissolution for purposes of
this Agreement: (1) dissolution of FAMC which becomes final as a matter of
law more than twelve (12) months after adoption of the resolution of
dissolution; or (2) incorporation, organization or reorganization of a
corporation or other business entity which is substantially similar to FAMC and
which uses substantially the same assets or equity as FAMC, within twelve (12)
months of adoption of the resolution of dissolution. As used herein,
the term “reorganization” shall have the same meaning as in Section 368(a) of
the Internal Revenue Code of 1986.9
(b) Payment of Accrued
Compensation.
(i) Upon
termination of this Agreement pursuant to preceding subsection (a), the Employee
(or his estate or heirs, as the case may be) shall be entitled to receive all
Base Salary, annual Bonuses, expense reimbursements,
vacation
pay, and similar amounts accrued and unpaid as of the date of such
termination. The obligations of FAMC under this subsection (b) shall
survive
any
termination of this Agreement.
(ii) In
the event of the Employee’s voluntary termination of employment hereunder, FAMC
shall not be obligated to make any further compensation payments to Employee
beyond those accrued prior to the effective date of such
termination.
(c) Disability
Pay. Upon termination of this Agreement pursuant to preceding
subsection (a)(i), FAMC, in its discretion, shall either:
(i) continue
to pay the Employee (or his estate or heirs, as the case may be) for the lesser
of twenty-four (24) months or10 the balance of the Term the difference
between the Employee’s current Base Salary and the amount of disability
insurance payments received by the Employee under insurance policies provided by
FAMC in accordance with this Agreement; or
(ii) pay
the Employee (or his estate or heirs, as the case may be) the present value of
the payments described in preceding subsection (c)(i), discounted at a rate
equal to the yield then available for two-year U.S. Treasury Notes, plus 50
basis points (0.50%).
(d) Severance Pay. Upon
termination of this Agreement pursuant to preceding subsection 9(a)(iii), FAMC
shall pay you within thirty (30) days after such termination an aggregate amount
in cash equal to one hundred percent (100%) of all Base Salary scheduled to be
paid and not yet paid to you under this Agreement for the balance of the
Term.
In the
event of severance of FAMC’s employment of you pursuant to preceding subsections
9(a)(i) or (iii), the amount to be paid by FAMC to you hereunder will not be
mitigated by any subsequent earnings by you from any source.11
(e) Constructive
Termination. The Employee may, at his option, deem this
Agreement to have been terminated by FAMC in the event of its breach, including
prospective breach, of any term hereof unremedied for thirty (30) days after
notice thereof to FAMC. Upon notice to FAMC of his exercise of this
option, the Employee shall have the same rights under such a constructive
termination as if FAMC had terminated his employment pursuant to preceding
subsection (a)(iii).
10. Notices. Any notice given
under this Agreement will be sufficient if in writing and either: (a)
mailed postage prepaid by registered or certified mail, return receipt
requested; or (b)
delivered by hand to, in the case of Xxxxxx Mac, 0000 Xxxxxx-Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, attention Vice President – General Counsel or, in the
case of the
Employee,
_________________________________ (or to such other addresses as may be from
time to time designated by notice from the recipient party to the
other). Any such notice will be effective upon actual receipt or
refusal thereof.12
11. Miscellaneous.
(a) Governing Law. This
Agreement shall be governed by, interpreted and enforced in accordance with the
laws of the District of Columbia.
(b) Waiver. The waiver
by any party of a breach of any provision of this Agreement shall not operate as
a waiver of any other breach of any provision of this Agreement by any
party.
(c) Entire
Agreement. This Agreement sets forth the entire understanding
of the parties concerning the subject matter hereof, and may not be changed or
modified except by a written instrument duly executed by or on behalf of the
parties hereto.
(d) Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective, successors, heirs,
personal representatives and assigns. This subsection is not to be
construed to permit the Employee to assign his obligation to perform the duties
of his employment hereunder. This subsection permits FAMC the right
to assign this Agreement to a successor entity.
(e) Severability. If
any term, condition, or provision of this Agreement or the application thereof
to any party or circumstances shall, at any time or to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application of such term,
condition or provision to parties or circumstances other than those to which it
is held invalid or unenforceable, shall not be affected thereby, and each term,
condition and provision of their Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(f) Board of
Directors. Except as expressly provided otherwise in this
Agreement, reference to actions, decisions, determinations or similar
occurrences by FAMC (other than the execution of this Agreement and any
modifications hereto or notices given hereunder) shall mean the action, decision
or determination of the full Board of Directors of FAMC and not a Committee
thereof, notwithstanding any Bylaw provision of FAMC to the
contrary.
12. Agreement Not to Compete with Xxxxxx
Mac. Notwithstanding anything in this Agreement to the
contrary, in the event of the termination of your employment, for a period of
two years thereafter, you shall not, without the prior written consent of Xxxxxx
Mac, directly or indirectly, engage in any business or activity, whether as
principal, agent, officer, director, partner, employee, independent contractor,
consultant, stockholder or otherwise, alone or in association with any other
person, firm, corporation or other business organization, that directly or
indirectly competes with any of the businesses of Xxxxxx Mac in any manner,
including
without
limitation, the acquisition and securitization (for capital market sale) of
agricultural mortgage loans or USDA “guaranteed portions” (hereinafter referred
to as “Xxxxxx Mac Qualified Loans”); provided, however, that such prohibited
activity shall not include the ownership of up to 20% of the common stock in a
public company.13
13. Agreement Not to Use Confidential or
Proprietary Information. Xxxxxx Mac and you both recognize
that you have access to and acquire, and may assist in developing, confidential
and proprietary information relating to the business and operations of Xxxxxx
Mac as a result of your employment or association with Xxxxxx
Mac. You hereby covenant and agree that you will retain all
“Confidential Information” (as defined below) in trust for the sole benefit of
Xxxxxx Mac and its successors and assigns. You hereby covenant
further that, in addition to your fiduciary responsibilities as an officer not
to disclose certain information of or relating to Xxxxxx Mac, you will not, at
any time during or after the term of this Agreement, without the prior written
consent of Xxxxxx Mac, directly or indirectly communicate or divulge any such
Confidential Information to any person, firm, corporation or other business
organization, or use any such Confidential Information for your own account or
for the account of any other person, except as required in connection with the
performance of your services hereunder. The term “Confidential
Information” shall mean any trade secret, data or other confidential or
proprietary information related to the business and activities of Xxxxxx
Mac. Notwithstanding the foregoing, Confidential Information shall
not include any information that is or becomes a part of the public domain or
generally available to the public (unless such availability occurs as a result
of any breach by you of this Section 11), or becomes available to you on a
non-confidential basis from a source (other than Xxxxxx Mac) that is not bound
by a confidentiality agreement and does not breach his or her fiduciary
responsibilities. The provisions of this Section 13 shall survive the
termination of this Agreement and the termination of your employment
hereunder.14
14. Agreement Not to Solicit Xxxxxx Mac
Employees. For a period of two years after the termination of
your employment hereunder, you shall not, directly or indirectly, induce any
employee of Xxxxxx Mac who is a “member of management” (as defined below) or is
directly involved in the acquisition and securitization (for capital market
sale) of Xxxxxx Mac Qualified Loans to engage in any activity in which you are
prohibited from engaging in under this Agreement, or to terminate such person’s
employment with Xxxxxx Mac. You shall not directly or indirectly,
either individually or as owner, agent, employee, consultant or otherwise,
employ, offer employment to, lure, entice away or assist others in recruiting or
hiring any person who is or was employed by Xxxxxx Mac unless such person shall
have ceased to be employed by Xxxxxx Mac for a period of at least six months and
is not subject to any non-compete covenants substantially similar in nature to
those contained in Section 12 hereof. “Member of management” means
the President, any Senior Vice President, Vice President or the Controller of
Xxxxxx Mac.15
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