EXHIBIT 10.2
EMPLOYMENT CONTRACT
This Contract is entered into between United Financial Mortgage Corp., an
Illinois corporation (hereafter called "Company"), and Xxxxx Xxxxxxxx (hereafter
called "Employee") this 1st day of August, 2003 and shall become effective as of
August 1, 2003.
The Company and or its subsidiaries, are engaged in the business of providing
mortgage, banking, brokerage and other financial and administrative services.
Company desires to engage the services of Employee as one of its key executives,
and Employee is willing and able to perform in that capacity.
Accordingly, in consideration of the mutual covenants herein contained, the
parties to this Contract agree as follows:
1. Employment. Company hereby agrees to employ Employee, and Employee
hereby accepts such employment with Company and/or one or more of its
subsidiaries, on the terms and conditions in this Contract.
2. Term of Employment. Subject to the provisions for termination hereafter
provided, the term of Employee's employment under this Contract shall
be for a period of two (2) years beginning on August 1, 2003, provided
that the term of employment shall be automatically renewed for one
additional year on each anniversary date beginning in 2005, unless
either party has given the other written notice of non-renewal at least
thirty (30) days prior to that anniversary date.
3. Duties of Employee. Employee is employed as President and Chief
Executive Officer of the Company. It is understood and agreed that
Employee is subject to the direction and control of Company's Board of
Directors, and shall, if requested by Company's Board of Directors
during the term of this Contract, serve in any other additional
executive capacity with Company or one or more of its subsidiaries,
taking into consideration his experience and performance record to date
with Company. Employee shall devote substantially all of his business
time, attention, efforts, and energy to the business of Company, and
may not, during the term of this Contract, be engaged in any other
business activities which interfere with his ability to carry out his
obligations hereunder. However, such restriction shall not be construed
as preventing Employee from participating in civic and charitable
activities or from making investments in non-competitive business
enterprises so long as Employee will not be required to render personal
services to any such activity or enterprise during Employee's normal
business hours with Company.
4. Compensation.
a. Base Salary. Commencing August 1, 2003, Company shall pay to
Employee an annual base salary of $250,000 (from which federal
withholding and social security taxes will be deducted)
payable monthly or semi-monthly in the same manner as salary
payments are paid to other key executives of Company. Such
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annual base salary may be reset annually by action of the
Board of Directors, but shall not be reduced below $200,000
without the written consent of the Employee.
b. Employee shall be entitled to participate in such incentive
plan or plans as Company may have in effect from time to time.
Any bonus for fiscal year 2003 shall be in accordance with
Exhibit A attached hereto and incorporated herein by
reference. Thereafter, any plan or bonus arrangement shall be
at the established by the Compensation Committee or the Board
of Directors.
5. Fringe Benefits.
a. Business Expenses. Employee shall, during his employment by
Company, be entitled to reimbursement for business and related
expenses subject to compliance with Company's policies
relating to such reimbursements.
b. Medical and other Benefits. Employee shall receive the same
benefits as are given to Company's other key executives as to
medical, dental, disability, retirement and other similar
benefits. In addition, Employee shall be provided with full
family medical and dental coverages with plan terms and equal
to the coverages that are provided to other employees.
c. Paid Vacation. Each fiscal year (or portion thereof) beginning
with fiscal year ending April 30, 2004, Employee may take four
(4) weeks of vacation which time his compensation shall be
paid in full. Unused vacation will not be carried over and
will not be paid unless by prior consent or request of the
Board.
d. Automobile. Company shall provide an automobile selected by
Employee for Employee's use at a cost of up to $1,000.00 per
month, and such automobile shall be replaced at least every 36
months. In the alternative, at Employee's option, Company
shall provide an allowance for the use of a late model vehicle
owned or leased by Employee in the amount of $1,000.00 per
month. Whether Employee is using an automobile owned or leased
by Company or by Employee, (i) Company shall pay or reimburse
Employee for maintenance and repair expenses of the automobile
upon submission of vouchers or itemized lists of such expenses
prepared in compliance with Company's policy, and (ii)
insurance shall be provided for or reimbursed by Company for
such vehicle. Employee shall be named as an additional insured
on any Company provided insurance policy covering such
automobile for public liability, and Company shall be named as
an additional insured on any Employee insurance policy
covering such vehicle for public liability. In the event the
automobile is damaged or destroyed by reason of accident,
theft, vandalism, or otherwise, Employee will not have any
liability to Company for any such loss or damage (including
out-of- pocket deductibles).
e. Life Travel/Accident and D&O Insurance. During the term of
this Contract, Company shall pay for and keep in full force
and effect life insurance policies on the life of, and with
the proceeds payable to, Employee (or his designated
beneficiary), it being understood that the proceeds payable
under such life insurance policies (whether provided by
Company and/or anyone or more of its
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subsidiaries) shall at all times be a minimum of $350,000. If
the insurer that issues such policies permits Employee to
purchase additional insurance, Employee may do so at
Employee's expense.
f. Other Benefits. Company shall provide such other benefits for
its key executives and other employees as it may determine
from time to time. No provision of this Contract shall
preclude Employee from participating in any benefit plan now
in effect or hereafter adopted by Company for its key
executives, but Company shall be under no obligation to
provide for Employee's participation in, or to institute, any
such plan or to make any contribution under any such plan,
unless such opportunities are provided to all Company
employees as a group, or to all of Company's key executives as
a group.
6. Termination of Employment.
a. By Company.
(i) Date of Termination. Company may at any time
terminate Employee's employment, in which event
Employee shall leave the premises on such date (the
"Date of Termination") as is specified by Company in
the notice of termination (which date can be as early
as the date of such notice). If such termination is
not "for cause" (as defined herein) Company shall
provide Employee with written notice of such
termination thirty (30) days prior to the Date of
Termination.
(ii) For Cause. If such termination is "for cause,"
Company will have no obligation to pay Employee any
compensation or fringe benefits (other than benefits
payable as of the Date of Termination pursuant to a
Company life insurance, disability, retirement or
other benefit plan) accrued after the Date of
Termination. For purposes of the preceding sentence,
the phrase "for cause" means:
(a) Employee's death or absence from Company's
offices for physical or mental illness, or
any other reason, for a total period of one
hundred and twenty (120) days in any twelve
month period (except that any vacation
periods, travel on Company business, or
leaves of absence specifically granted by
Company's Board of Directors shall not be
considered as periods of absence from
employment);
(b) Employee's serious misconduct in or habitual
neglect of the performance of his or her
duties or obligations hereunder which in the
commercially reasonable judgment of the
Company's Board of Directors materially
injures the Company;
(c) Employee's conviction for any felony or act
of fraud or breach of trust against Company,
or Employee fails to observe any covenant
referenced in Paragraph 7 below.
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(d) Employee is guilty of an act of moral
turpitude or has a substance abuse problem
that materially affects the performance of
Employee's duties or materially injures the
Company.
(e) The willful or gross misconduct of the
Employee which causes material financial
harm or damage to the Company.
If Company intends to terminate Employee's employment
under any of Subparagraph (ii)(b), (c), (d) or (e)
above and if all of Employee's act or omissions
giving rise to such determination to terminate
Employee's employment are susceptible to cure by
Employee within a period of thirty (30) days, the
written notice given to Employee will state that the
effective date of termination will be thirty (30)
days from the date of such notice, and such notice
will be rescinded if Employee effects a substantially
cure within such thirty (30) day period.
Notwithstanding the foregoing, nothing herein shall
be deemed to waive the rights of Employee and the
obligations of Company under the American with
Disabilities Act.
(iii) Not for Cause. If such termination is other than "for
cause" and occurs within the initial two (2) year
term:
(a) Company shall be obligated to pay to
Employee, in regular payroll period
installments, a sum equal to the amount of
Employee's then annual base salary and most
recent incentive bonus, pro rated for the
remaining unexpired term of this agreement.
Such payments shall commence on the first
regular payroll date unless terminated by
Employee's breach of Section 7. At the
option of the Board of Directors, the
aggregate due hereunder may be paid in a
lump sum, payable within ten (10) days of
termination.
(b) At the option of Employee, Company shall
transfer the title (free and clear of any
liens or other encumbrances) to any
automobile then owned (or leased) for use
by, or otherwise provided to, Employee upon
the payment of the then wholesale value of
the automobile to Company by Employee.
Company shall pay any transfer taxes in
connection with such transfer.
(c) For a period of eighteen (18) months after
the Date of Termination, Employee shall be
eligible under COBRA, at Employees' expense
to continue the medical and dental benefits
referred to in Subparagraph 5.b.
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(iv) In cases of termination other than for death, the
Employee shall be deemed to have resigned effective
as of the Date of Termination from all positions held
in the Company, including without limitation any
position as a director, officer, agent, trustee or
consultant of the Company or any subsidiary of or
other entity under common control with the Company
and hereby irrevocably consents to all Board actions
to effectuate or acknowledge such resignation.
b. By Employee. Employee may terminate his employment at any
time. If termination is by Employee, Company will have no
obligation to pay to Employee any compensation or fringe
benefits (other than benefits payable as of the date of
termination pursuant to a Company life insurance, disability,
retirement or other benefit plan) accrued after the date of
termination.
7. NON-COMPETITION. NON-SOLICITATION AND CONFIDENTIALITY
a. The Employee covenants and agrees with the Company as follows:
Confidential Information. Employee acknowledges that, in and
as a result of his employment by the Company, he will be
making use of, acquiring, and/or adding to confidential
information of a special and unique nature and value relating
to such matters as the Company's proprietary information,
copyrights, trade secrets, systems, procedures, manuals,
confidential reports, and lists of customers and brokers
(which are deemed for all purposes confidential and
proprietary), as well as the nature and type of services
rendered by the Company, the methods used and preferred by the
Company's customers and brokers, and the fees paid by or to
them. As a material inducement to the Company to enter into
this Agreement and to pay to Employee the compensation and
benefits stated in Paragraphs 4 & 5 above, Employee covenants
and agrees that he shall not, at any time during or for two
years following the term of his employment, directly or
indirectly, divulge or disclose for any purpose whatsoever any
confidential information that has been obtained by, or
disclosed to him, as a result of his employment by the
Company.
(i) that he will not (without the prior written consent
of the Company), so long as he is employed by the
Company, and for a period of one (1) year thereafter,
directly or indirectly, in any manner whatsoever,
including, without limitation, either individually or
in partnership or jointly, or in conjunction with any
other person ("person" shall mean an individual,
trust, partnership, body corporate or politic,
association or other incorporated or unincorporated
organization), as principal, agent, shareholder, or
in any other manner whatsoever, carry on or be
engaged in or be concerned with interested in or
permit his name or any part thereof, to be used or
employed by any person that competes directly with
the Company, or any successor or subsidiary of the
Company, in the business of providing mortgage
banking, mortgage brokerage; mortgage servicing
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and any other financial and administrative services
competitive with the business of the Company.
(ii) that he will not, so long as he is employed by the
Company and for a period of one (1) year thereafter,
interfere with, disrupt or attempt to disrupt any
then existing relationship, contractual or otherwise,
between the Company or any successor or subsidiary of
the Company, and any of their suppliers, customers,
clients, executives, employees or other persons with
whom they deal.
b. In the event that any clause or portion of any covenant
contained in this Section 7 shall be unenforceable or declared
invalid for any reason whatsoever, such enforceability or
invalidity shall not affect the enforceability or validity of
the remaining portions of the covenant and such unenforceable
or invalid portion shall be severable from the remainder of
this Agreement.
c. The foregoing covenants are given by the Employee
acknowledging that he is an individual with specific knowledge
of the affairs of the Company and that the Company carries on
business in numerous states. The Employee hereby acknowledges
and agrees that all restrictions contained in this Agreement
are reasonable and valid as to time period and scope and are
reasonably required for the protection of the interests of the
Company and its parent or subsidiary corporations, officers,
directors, shareholders and other employees and were
negotiated by him and his counsel and that the term of this
agreement provides good and sufficient consideration for the
provisions contained herein.
d. It is understood and acknowledged by the parties hereto that
the covenants set out in this section are essential elements
to this Agreement.
8. Injunctive Remedy. In the event of a breach or a threatened breach by
the Employee of the provisions of Paragraph 7 of this Agreement,
Company shall be without adequate remedy at law and, therefore, the
provisions of that Paragraph 7 may be enforced by a preliminary and/or
permanent injunction restraining Employee from commission of such
breach to the full extent hereof, or to such lesser extent as a court
of competent jurisdiction may deem just and proper for the reasonable
protection of the rights, interests and remedies available to it for
such breach or threatened breach, including the recovery of money
damages. In addition, in the event that either party shall be required
to retain counsel to enforce the provisions of this Agreement, it is
understood and agreed that damages shall include, but shall not be
limited to, reasonable attorneys' fees and expenses incurred by the
prevailing party.
9. Definition. For all purposes of this Agreement, the phrase "directly or
indirectly" shall include, inter alia, employment by, ownership of any
direct or indirect interest in, or rendering of any service to any
person, partnership, association, limited liability company or
corporation, whether as an individual employee, partner, shareholder,
director,
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member, officer, principal, manager, agent, trustee, consultant,
investor, single proprietor, or pursuant to any other relationship or
capacity.
10. Arbitration. All disputes, controversies or matters of interpretation
arising out of or in connection with this Agreement, except for any
disputes wherein a request is made for injunctive relief under
Paragraph 8 of this Agreement, shall be submitted by either party for
final and binding arbitration to be conducted in the State of Illinois
in accordance with the Rules of the American Arbitration Association.
The award rendered may be entered as a judgment in any court of
competent jurisdiction in the State of Illinois and shall not be
subject to appeal.
11. Severability. The invalidity or unenforceability of any provision in
the Agreement shall not in any way affect the validity or
enforceability of any other provision and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision
had never been in the Agreement.
12. Notices. All notices allowed or required to be given hereunder must be
in writing and sent by overnight courier to the address of the party
entitled to such notice shown at the end of this Contract. Either party
hereto may change the address to which any such notice is to be
addressed by giving notice in writing to the other party of such
change. Any time limitation provided for in this Contract shall
commence with the date that the party actually receives such written
notice, and the date or postmark of any return receipt or delivery
notice indicating the date of delivery of such notice to the addressee
shall be conclusive evidence of such receipt. In addition to the
parties hereto, copies of all notices should be sent to:
___________________________
___________________________
___________________________
___________________________
and
___________________________
___________________________
___________________________
___________________________
13. Assignment. Neither Employee nor anyone claiming under Employee may
commute, encumber, or dispose of the right to receive benefits
hereunder. Such rights to receive benefits hereunder is expressly
declared to be non-assignable and non-transferable by Employee, and in
the event of any attempted assignment or transfer, Company shall have
no further liability hereunder; provided, however, that the foregoing
shall not apply to assignments by operation of law, such as to a
guardian or to an executor of Employee's estate.
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14. Waiver. No waiver by either party of any breach of any provision hereof
by the other party shall operate or be construed as a waiver of any
subsequent breach by the waiving party.
15. Binding Effect. This Contract shall be binding upon the parties hereto
and their heirs, successors, and assigns.
16. Survival of Provisions. All provisions of this Contract, including all
representations, warranties, covenants, and agreements contained or
referenced herein, will survive the execution and delivery hereof and
any investigation of the parties with respect thereto. The provisions
of Paragraphs 7 will survive the termination or amendment of this
Contract.
17. Validity. If any provision of this Contract is held by a court of law
to be illegal or unenforceable, the remaining provisions of the Contact
will remain in full force and effect. In lieu of such illegal or
unenforceable provision, there shall be added automatically as a part
of this Contract a provision as similar in terms to such illegal or
unenforceable provision as may be possible and be legal and
enforceable.
18. Amendments. This Contract may be amended at any time and from time to
time in whole or in part by an instrument in writing setting forth the
particulars of such amendment and duly executed by Company and
Employee.
19. Duplicate Originals. This Contract may be executed in duplicate
originals, each of which for all purposes is to be deemed an original,
and all of which constitute, collectively, one agreement; but in making
proof of this Contract, it will not be necessary to produce or account
for more than one such duplicate.
20. Captions. The captions or section headings of this Contract are
provided for convenience and shall not limit or affect the
interpretation of this Contract.
21. Governing Law. This Contract has been made in, and its validity,
interpretation, construction, and performance shall be governed by and
be in accordance with, the laws of the State of Illinois, without
reference to its laws governing conflicts of law. Each party hereby
irrevocably agrees that any legal action or proceedings with respect to
this Contract may be brought in the courts of the State of Illinois, or
in any United States District Court of Illinois, and, by its execution
and delivery of this Contract, each party hereby irrevocably submits to
each such jurisdiction and hereby irrevocably waives any and all
objections which it may have as to venue in any of the above courts.
Each party further consents and agrees that any process in connection
with any proceeding relating to this Contract may be served inside or
outside the State of Illinois by registered or certified mail, return
receipt requested, postage prepaid, and be effective as of the receipt
thereof, or in such other manner as may be permissible under the rules
of said Courts.
22. Expenses. Company agrees to pay the reasonable attorneys' fees incurred
by Employee in connection with the review and negotiation of this
Contract up to the lesser of (i) the
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legal fees incurred by Company in the review and negotiation of this
Contract; or (ii) the legal fees incurred by Employee in such review
and negotiation.
23. Complete Understanding. This Contract constitutes the complete
understanding between the parties hereto, except as otherwise expressly
provided or referenced herein, with respect to the employment of
Employee. This Contract supersedes all prior agreements and
understandings between the parties with respect to the subject matter
hereof.
EMPLOYEE EMPLOYER:
Xxxxx Xxxxxxxx United Financial Mortgage Corp.
/s/ Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxx, Director
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EXHIBIT A
Bonus Schedule for Fiscal Year Ended 2004
Return on average Bonus as a %
Shareholder equity of Base Salary
-----------------------------------------
< or = 15% At Board Discretion
16% 10%
17% 20%
18% 30%
19% 40%
20% 50%
21% 60%
22% 70%
23% 80%
24% 90%
25% 100%
26% 110%
27% 120%
28% 130%
29% 140%
30% 150%
31% 160%
32% 170%
33% 180%
34% 190%
35% 200%
36% 210%
37% 220%
38% 230%
39% 240%
40% 250%
>40% At Board Discretion
The Compensation Committee and the Board of Directors retain the right to amend
the incentive compensation schedule as they deem appropriate.
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