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EXHIBIT 10.67
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 28, 1995 by and between LOMAS
FINANCIAL CORPORATION, a Delaware corporation and its wholly-owned subsidiary,
LOMAS MORTGAGE USA, INC., a Connecticut corporation, (jointly, the "Company")
and XXXX X. XXXXXXX ("Executive").
WHEREAS, the Company desires to employ Executive as its Executive Vice
President and Chief Restructuring Officer ("EVP");
WHEREAS, the parties intend that Executive shall also be a Director of
the Company;
WHEREAS, the Company and Executive desire to enter into an agreement
(the "Agreement") embodying the terms of such employment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. TERM OF EMPLOYMENT. Executive's employment by the Company
shall be for a term (the "Employment Term") which shall commence on July 1, 1995
(the "Commencement Date") and shall end on the later of one year from the
Commencement Date and the date on which a plan of reorganization or liquidation
of the Company under the Bankruptcy Code of the United States is confirmed,
unless sooner terminated in accordance with the provisions of this Agreement.
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2. POSITION.
(a) During the Employment Term Executive shall serve as
EVP and shall have such duties and authority as are consistent with such
position. Executive shall report directly to the President of the Company. The
goals and objectives of Executive's employment shall be formulated together
with Xxxx X. Xxxxx, President of the Company, consistent with strategic
direction set by the Board of Directors of the Company. Executive shall, during
the Employment Term, be nominated for election to the Board of Directors at any
election called for the purpose of electing directors. Executive shall serve on
the Board without additional compensation, provided, however, that nothing
herein shall impair any accrued benefits arising from the prior service of
Executive as a Director, which accrued benefits shall be an obligation of the
Company and shall (if not paid sooner) be payable on the termination of
employment under this or any subsequent employment agreement between Executive
and the Company.
(b) During the Employment Term, Executive shall devote
substantially all of his business time and best efforts to the performance of
his duties hereunder and shall not engage in any other business, profession or
occupation for compensation or otherwise, except such business interests and
fiduciary obligations as are consistent with (but are not limited to) those
currently being pursued by Executive to the extent that such interests and
obligations do not materially interfere with Executive's performance of his
duties for the Company.
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(c) Executive shall be permitted to reside in the
location of his choice, but shall spend as much time in Dallas, Texas as he and
the Company reasonably deem necessary to perform his duties hereunder.
3. BASE SALARY. During the Employment Term, the Company shall pay
Executive an annual base salary (the "Base Salary") at the rate of $300,000,
payable in arrears, in accordance with the usual payment practices of the
Company. Executive may also be eligible for bonus compensation at the
discretion of the Company either by approval of the Board of Directors or by
appropriate order of the Bankruptcy Court.
4. EMPLOYEE BENEFITS. During the Employment Term, Executive shall
be provided employee benefits (the "Employee Benefits") as shall be maintained
by the Company from time to time on the same basis as the other senior
executives of the Company. At the option of Executive, he shall receive a cash
payment equal to the amount of health insurance premium the Company would have
paid on his behalf in return for which Executive shall opt out of the Company
health insurance plan. Executive shall be entitled to four weeks of paid
vacation during each 12 month period of this Agreement, or a prorated portion
thereof in the event that this Agreement is terminated prior to the expiration
of such 12 month period, which shall be immediately accrued in full. The
Company shall reimburse Executive for any unused vacation time upon termination
of employment as provided hereunder. As a senior executive, Executive shall be
expected to remain in communication with the Company during periods of
vacation.
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5. BUSINESS EXPENSES AND PERQUISITES. The Company shall reimburse
such of Executive's travel, entertainment and other business expenses as are
reasonably and necessary incurred by Executive during the Employment Term in
the performance of his duties hereunder, in accordance with the Company's
policies as in effect from time to time applicable to the reimbursement of such
expenses incurred by senior executives. Subject to the reasonable approval of
the CEO, Executive may have use of a furnished office in the New York City area
commensurate with the Executive's needs, taking into account the proportion of
his business time spent in such location.. To the extent any expenditure under
this paragraph 5 is reportable by Executive and the Company as "wages" or other
compensation received by and/or paid to Executive, Executive shall be entitled
to receive additional compensation appropriately "grossed up" to cover
Executive's tax liability resulting from such reporting and from the receipt of
any such additional compensation.
6. TERMINATION. Except as provided in this Section 6, upon a
termination of employment Executive shall be entitled to no other payment or
benefit under this Agreement or any other plan or program of the Company, and
the entitlements described in this Section 6 shall be his exclusive
entitlements in the event of termination of employment.
(a) FOR CAUSE BY THE COMPANY.
(i) Subject to the notification and cure
provisions of subparagraph (ii) of this Section 6(a), Executive's
employment hereunder may be terminated by the Company for "Cause." For
purposes of this Agreement, "Cause" shall mean (A) Executive's willful
and continued failure substantially to perform his duties
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hereunder, including duties directed by the Board consistent with the
provisions of Section 2(a) (other than as a result of total or partial
incapacity due to physical or mental illness), (B) material dishonesty
in the performance of Executive's duties hereunder, (C) an act or acts
on Executive's part constituting a felony under the laws of the United
States or any state thereof, excluding acts imputed to Executive by
reason of his position as EVP of the Company, or (D) any other willful
act or omission which is materially injurious to the Company and its
subsidiaries and affiliates, taken as a whole, financially or
otherwise (including but not limited to breach of the non-competition
and confidentiality covenants set forth in Sections 7 and 8 hereof).
For purposes of clause (D) of this Section 6(a)(1), an act or failure
to act, on the part of Executive, shall be deemed "willful" if done,
or omitted to be done, by Executive not in good faith and without
reasonable belief that the act or omission was in or not opposed to
the best interests of the Company.
(ii) If the Company proposes to terminate
Executive's employment hereunder for Cause pursuant to clause (A) of
Section 6(a)(i), the Company shall give Executive written notice. Such
notice shall be given with sufficient particularity that Executive
will have an opportunity to correct the situation to the reasonable
satisfaction of the Company within 60 days. If such correction is not
so made, the Company may, within 60 days after the expiration of the
time within which Executive had the opportunity to correct such
situation, give written notice to Executive that it is terminating his
employment for Cause effective forthwith with the effect stated in
this Section 6(a).
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(iii) If Executive is terminated for Cause, he
shall be entitled to receive his Base Salary through the date of
termination. All other benefits due Executive following Executive's
termination of employment pursuant to this Subsection 6(a) shall be
determined in accordance with the plans, policies and practices of the
Company.
(b) DISABILITY OR DEATH. Unless terminated sooner
pursuant to the provisions of this Agreement, Executive's employment hereunder
shall terminate upon (i) his death or (ii) at the Company's election if
Executive becomes physically or mentally incapacitated and is therefore unable
for a period of 3 consecutive months to perform his duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to
the Company and Executive shall be final and conclusive for all purposes of the
Agreement.
Upon termination of Executive's employment hereunder by reason of
death, Executive's estate shall receive continued payment of his Base Salary at
the rate in effect at the time of Executive's death through the end of the
month in which his death occurs. Upon termination of Executive's employment
hereunder by reason of Disability, Executive shall receive continued payment of
his Base Salary through the date on which Executive
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is first eligible to receive payment of disability benefits in lieu of Base
Salary to the maximum extent permitted under the Company's employee benefit
plans as then in effect. All other benefits due Executive following Executive's
termination by reason of Disability or death shall be determined in accordance
with the plans, policies and practices of the Company.
(c) WITHOUT CAUSE BY THE COMPANY. Executive's employment
may not be terminated by the Company without "Cause" (other than by reason of
death or Disability) except upon six (6) months prior written notice, which
notice may be given only as of the end of a fiscal quarter and, in any event,
shall not be effective prior to the first anniversary of the Commencement Date.
Executive shall receive continued payment of Base Salary through the Balance of
the Employment Term (in the same amounts and at the same times as if there had
been no such termination of employment) together with any bonus payment which
may have been authorized by the Company and to which he would have been
entitled payable on the date it otherwise would have been paid but for the
termination without cause. Executive shall continue to receive health and
welfare benefits, and all other Employee Benefits, through the balance of the
Employment Term (as if there had been no such termination of employment). All
other benefits due Executive following Executive's termination of employment by
the Company without Cause shall be determined in accordance with the plans,
policies and practices of the Company.
(d) TERMINATION BY EXECUTIVE. Subject to the notification
and cure provisions of this Section 6(d), Executive may terminate his
employment for Good Reason
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pursuant to this Section 6(d) and thereupon shall be entitled to the same
payments and benefits as described in Section 6(c) above. For purposes of this
Section 6(d), "Good Reason" shall mean the occurrence of any of the following
events without the prior written consent of Executive: (i) removal of Executive
from his position as EVP other than for Cause, death or Disability, (ii) a
failure by the Company to pay Executive any amounts due, or to provide
Executive with any of the benefits granted to Executive hereunder or (iii) a
material reduction or change inconsistent with the provisions of Section 2(a)
in Executive's duties and responsibilities.
If Executive proposes to terminate his employment for Good Reason
pursuant to this Section 6(d), he shall give the Company written notice. Such
notice shall be given with sufficient particularity that the Company will have
an opportunity to correct the situation to the reasonable satisfaction of
Executive within 60 days. If such correction is not so made, Executive may,
within 60 days after the expiration of the time within which the Company had
the opportunity to correct such situation, give written notice to the Company
that he is terminating his employment for Good Reason effective forthwith with
the effect stated in this Section 6(d).
If Executive terminates his employment hereunder other than for Good
Reasons as defined in this Section 6(d), he shall be entitled to receive the
payments and benefits to which he would be entitled in the event of a
termination of employment by the Company for Cause.
7. TERMINATION AS A RESULT OF NON-RENEWAL OF THE
EMPLOYMENT TERM. If Executive's employment with the Company terminates by
reason of the
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expiration or non-renewal of the Employment Term, Executive shall be entitled
to receive Base Salary through the end of the Employment Term. All other
benefits due Executive following Executive's termination of employment shall be
determined in accordance with the plans, policies and practices of the Company.
8. NOTICE OF TERMINATION. Any purported termination of
employment by the Company or by Executive shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of employment under the provision so indicated.
9. NON-COMPETITION. Executive acknowledges and
recognizes the highly competitive nature of the businesses of the Company and
accordingly agrees that:
(a). During the Employment Term, Executive shall not enter
into any competitive endeavors with and shall not undertake any commercial
activity which is contrary to the best interests of the Company, including
becoming an employee, owner (except for passive investments of not more than 1%
of the outstanding shares of, or any other equity interest in, any company or
entity listed or traded on a national securities exchange or in an
over-the-counter securities market), officer, agent or director of any firm or
person in any geographic area in which the Company or any of its affiliates
conducted any such competing line of business.
(b). During the Employment Term and for a period of one
year after termination of Executive's employment, Executive shall not directly
or indirectly knowingly,
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or under circumstances in which he reasonably should have known, induce any
employee of the Company to engage in any activity in which Executive is
prohibited from engaging by this Section 9 above or to terminate his employment
with the Company and shall not directly or indirectly knowingly, or under
circumstances in which he reasonably should have known, employ or offer
employment to any such person unless such person shall have ceased to be
employed by the Company and such cessation of employment shall have occurred at
least three months prior thereto, except that Executive may employ or offer
employment to any person whose employment was terminated by the Company (other
than at the direction of Executive).
11. CONFIDENTIALITY. Executive shall not, during the
Employment Term or thereafter, without the prior written consent of the Board,
use, divulge, disclose or make accessible to any other person, firm,
partnership or corporation any Confidential Information, as hereinafter
defined, except (i) while employed by the Company in the business of and for
the benefit of the Company or (ii) when required to do so by a court of law, by
any governmental agency having supervisory authority over the business of the
Company or by any administrative body or legislative body, including a
committee thereof, with jurisdiction to order him to divulge, disclose or make
accessible such Information; provided, that in the case of any such requirement
or purported requirement if, and to the extent permitted by law, Executive
shall provide written notice to the Company prior to producing such
Information, which notice shall be given at least 10 days prior to the
producing of such Information, if practicable, so that the Company may seek a
protective order or other appropriate remedy. For purposes of this Agreement,
"Confidential
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Information" shall mean all non-public information concerning the business of
the Company, including, without limitation, information relating to its
financial products, product development, customer lists, relationships with
customers, other information about or provided by customers, financial
information, business and marketing plans and strategies, operating policies
and manuals, securities positions, and current or prospective transactions,
except for specific items which become publicly available information other
than through a breach by Executive of his fiduciary duty or any confidentiality
agreement, including without limitation this Section 11. Executive agrees that
upon termination of his employment hereunder for any reason, he shall return to
the Company immediately all memoranda, books, papers, plans, information,
letters and other data, and all copies thereof or therefrom, in any way
relating to the business of the Company, except that he may retain personal
notes, notebooks and diaries. Executive further agrees that he shall not retain
or use for his account at any time any trade name, trademark, service xxxx or
other proprietary business designation used or owned in connection with the
business of the Company.
12. SPECIFIC PERFORMANCE AND OTHER REMEDIES. Executive
acknowledges and agrees that the Company has no adequate remedy at law for a
breach or threatened breach of Sections 9 or 10 of this Agreement, and, in
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company (i)
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then
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be available and (ii) shall have no further obligation to make any payments to
Executive. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies at law or in equity that it may have
or any other rights that it may have under any other agreement.
13. INDEMNIFICATION. The Company shall indemnify
Executive against liabilities incurred as a result of or in connection with any
actions taken or omitted to be taken in the performance of his duties hereunder
to the fullest extent permitted by Delaware law. Executive acknowledges that
the Company's Certificate of Incorporation currently provides such
indemnification to its officers and directors.
14. MISCELLANEOUS.
(a). GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS.
(b). ENTIRE AGREEMENT/AMENDMENTS. This Agreement contains
the entire understanding of the parties with respect to the employment of
Executive by the Company. 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
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to that term or any other term 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). SEVERABILITY. It is expressly understood and agreed
that although Executive and the Company consider the restrictions contained in
Sections 9 and 10 to be reasonable, if a final judicial determination is made
by a court of competent jurisdiction that such restrictions are unenforceable
restriction against Executive, such provision shall not be rendered void but
shall be deemed amended to apply to the maximum extent enforceable.
Alternatively, if any court of competent jurisdiction finds that any
restriction contained in Section 9 or 10 is unenforceable, and such restriction
cannot be amended so as to make it enforceable, such finding shall not affect
the enforceability of any of the other restrictions contained herein. In the
event that any one or more of the other provisions of this Agreement shall be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be affected thereby.
(e). ASSIGNMENT. This Agreement shall not be assignable by
Executive and shall be assignable by the Company only with the consent of
Executive.
(f). SUCCESSORS; BINDING aGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees of the parties hereto.
(g) COMMUNICATIONS. For the purpose of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing and shall be
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deemed to have been duly given when faxed or delivered or two business days
after being mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth on the execution page of this Agreement or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt;
provided that all notices to the Company shall be directed to the attention of
the General Counsel with a copy to the Secretary of the Company.
(h). 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.
(i). SURVIVORSHIP. The respective rights and obligations
of the parties hereunder shall survive any termination of Executive's
employment to the extent necessary to the agreed preservation of such rights
and obligations.
(j). COUNTERPARTS. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effective as
if the signatures thereto and hereto were upon the same instrument.
(k). HEADINGS. 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.
(l). LIABILITY OF THE COMPANY. Lomas Financial, Inc. and
Lomas Mortgage USA, together with their respective affiliates, shall be jointly
and severally liable to Executive for the performance of all obligations
required of "the Company", as that term
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is used in this Agreement. Executive may seek damages for breach of this
Agreement from Lomas Financial Corporation or Lomas Mortgage USA, Inc. or any
affiliate of either of those entities.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EXECUTIVE:
/s/ XXXX X. XXXXXXX
-----------------------------
Xxxx X. Xxxxxxx
Address
COMPANY:
LOMAS FINANCIAL CORPORATION
By: /s/ XXXX X. XXXXX
--------------------------
Its: CEO
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Lomas Financial Corporation
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
LOMAS MORTGAGE USA, INC.
By: /s/ XXXX X. XXXXX
--------------------------
Its: CEO
-------------------------
Lomas Mortgage USA, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
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