EXECUTIVE EMPLOYMENT CONTRACT
Exhibit 10.3
THIS AGREEMENT made as of June 25, 2007 by and between PMC Commercial Trust, a Texas Real
Estate Investment Trust with its principal places of business in Dallas, Collin County, Texas,
hereinafter referred to as the “COMPANY”, and Xxx X. Xxxxx, hereinafter referred to as “EXECUTIVE”.
WITNESSETH THAT:
In consideration of the promises herein contained, the parties hereto mutually agree as
follows:
1. Employment: The Company hereby employs the Executive as its Executive Vice
President and Chief Investment Officer with such powers and duties as may be specified by the Board
of Trust Managers (the “Board”). The Executive hereby accepts employment upon the terms and
conditions as hereinafter set forth.
2. Term: Subject to the provisions for termination as hereinafter provided, the term
of this Agreement shall begin immediately and shall terminate on the earlier of (i) the Executive’s
seventieth (70th) birthday or (ii) June 30, 2010 or such later date as determined by the
Board (the “Term”). The Term of this Executive Employment Contract may be extended annually by the
Board.
3. Compensation: For all services rendered by the Executive under this contract, the
Executive shall be paid an annual salary at a minimum at the annual rate for the Executive
effective as of July 1, 2007 (the “Minimum Rate”). The Minimum Rate may be increased by the Board
at its discretion. The annual salary is payable pursuant to the normal payroll practices of the
Company.
The Board may consider bonus compensation for the Executive if the performance of the Company
and the Executive justifies such bonus compensation.
4. Authorized Expenses: The Executive is authorized to incur reasonable expenses for
the promotion of the business of the Company. The Company will reimburse the Executive for all
such reasonable expenses upon the presentation by the Executive, from time to time, of an itemized
account of such expenditures.
The Executive shall be entitled to such additional and other fringe benefits as the Board
shall from time to time authorize, including but not limited to: A) health insurance coverage for
the Executive, his wife and dependent children; B) a monthly automotive allowance of $550, which
the Executive is to use to obtain an automobile to be available for company needs. All operating
expenses such as maintenance, insurance and fuel (excluding fuel for company travel) will be the
responsibility and expense of the Executive.
5. Extent of Services: The Executive shall devote a substantial portion of business
time, attention and energies to the business of the Company, and shall not, during the term of this Agreement,
engage in any other business activities, whether or not such activities are pursued for gain,
profit or other pecuniary advantage. This provision is not meant to prevent him from A) devoting
reasonable time to civic or philanthropic activities or B) investing his assets in such form or
manner providing that it does not require any substantial services on the part of the Executive
that will interfere with the Executive’s employment pursuant to this Agreement. Executive’s
employment is considered as full-time.
6. Working Facilities: The Executive shall be furnished with such facilities and
services suitable to his position and adequate for the performance of his duties.
7. Duties: The Executive is employed in an executive and supervisory capacity and
shall perform such duties consistent herewith as the Board of the Company shall from time to time
specify. Subject to the provisions of Section 14 hereof, the precise services of the Executive may
be extended or curtailed, from time to time, at the discretion of the Board of the Company.
8. Disclosure of Information: The Executive recognizes and acknowledges that the
Company’s operating procedures or service techniques are valuable, special and unique assets of the
Company’s business. The Executive will not, during or after the term of his employment, disclose
the list of the Company’s customer base or service techniques to any person, firm, Company,
association or other entity for any reason or purpose whatsoever. In the event of breach or
threatened breach by the Executive of the provisions of this paragraph, the Company shall be
entitled to an injunction restraining any such breach. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to the Company for such breach
or threatened breach, including the recovery of damages from the Executive.
9. Vacations: The Executive shall be entitled each year to a vacation in accordance
with the vacation contract addendum dated effective July 1, 1999.
10. Disability: If the Executive is unable to perform his services by reason of
illness or total incapacity, based on standards similar to those utilized by the U.S. Social
Security Administration, he shall receive his full salary for one (1) year of said total incapacity
through coordination of benefits with any existing disability insurance program provided by the
Company (a reduction in salary by that amount paid by any Company provided insurance). Should said
Executive be totally incapacitated beyond a one-year period, so that he is not able to devote full
time to his employment with said Company, then this Agreement shall terminate.
11. Death During Employment: If the Executive dies during the term of employment and
has not attained the age of seventy years, the Company and/or any third party insurance provided by
the Company, through a coordination of benefits, shall pay the estate of the Executive a death
benefit equal to two times the Executive’s annual salary. In the event the Executive receives
death benefits payable under any group life insurance policy issued to the Company, the Company’s
liability under this clause will be reduced by the amount of the death benefit paid under such
policy. The Company shall pay any remaining death benefits to the estate of the Executive over the
course of twelve (12) months in the same manner and under the same terms as the Executive would
have been paid if he had still been working for the Company. No later than one (1) month from the
date of death, the estate of the Executive will also be paid any accumulated vacation pay. Such
payments pursuant to this paragraph shall constitute the full compensation of said Executive and he
and his estate shall have no further claim for compensation by reason of his employment by the
Company.
12. Assignment: The acts and obligations of the Company under this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the Company.
13. Invalidity: If any paragraph or part of this Agreement is invalid, it shall not
affect the remainder of this Agreement but the remainder shall be binding and effective against all
parties.
14. Additional Compensation: If during the Term, this Agreement is terminated by the
Company (other than pursuant to the provisions of Section 15 hereof) or by the Executive due to
“Constructive Discharge” then the Executive shall receive termination pay in an amount equal to
2.99 times the average of the last three years compensation. For purposes of this Agreement,
“Constructive Discharge” shall mean:
| • | Any reduction in salary below the Minimum Rate; | ||
| • | A material change diminishing the Executive’s job function, authority, duties or responsibilities, or a similar change deteriorating Executive’s working conditions that would not be in accordance with the spirit of this Agreement; | ||
| • | A required relocation of Executive of more than 100 miles from Executive’s current job location; or requires Executive to travel away from Executive’s office in the course of discharging Executive’s responsibilities in excess of that typically required of executives in similar positions. | ||
| • | Any breach of any of the terms of this Agreement by the Company, which is not cured within 14 days following written notice thereof by Executive to the Company. |
The amount payable by the Company pursuant to this Section 14 shall be made in one lump sum cash
payment payable to the Executive no later than 30 days following termination of this Agreement.
15. Termination: The Company cannot terminate this agreement except for: 1) the
intentional, unapproved material misuse of corporate funds, 2a) professional incompetence (i.e. the
intentional refusal to perform or the inability to perform the duties associated with Executive’s
position with the Company in a competent manner, which is not cured within 15 days following
written notice to Executive) or 2b) willful neglect of duties or responsibilities in either case
not otherwise related to or triggered by the occurrence of any event or events described in or
prescribed by Section 14 hereof.
16. Indemnification: The Company hereby agrees to indemnify and hold the Executive
harmless from any loss for any company undertaking, as contemplated in Section 7 hereof, whereby a
claim, allegation or cause of action shall be made against the Executive in the performance of his
contractual duties except for willful illegal misconduct. Said indemnification shall include but
not be limited to reasonable cost incurred in defending the Executive in his faithful performance
of contractual duties.
17. Entire Agreement: This contract may not be changed except in writing and embodies
the whole Agreement between the parties hereto and there are no inducements, promises, terms,
conditions or obligations made or entered into by the Company or the Executive other than contained
herein. This Executive Employment Contract supercedes and replaces that certain Executive
Employment Contract dated June 12, 2006 between the Company and the Executive.
IN WITNESS WHEREOF, the parties here hereunto signed and sealed this Agreement the date first
above written.
| Signed, Sealed and Delivered | “COMPANY” | |||
| In the presence of: | PMC Commercial Trust | |||
| /s/ Xxxxxx X. Xxxxxxxx | /s/ Xxxxx X. Xxxxxxxx | |||
| By: | Xxxxx X. Xxxxxxxx | |||
| President | ||||
| “EXECUTIVE” | ||||
| /s/ Xxxxx X. Xxxxxx | /s/ Xxx X. Xxxxx | |||
| By: | Xxx X. Xxxxx, | |||
| Executive Vice President and Chief Investment Officer | ||||
(CORPORATE SEAL) |
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