EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT ("AGREEMENT") is entered into
effective as of JANUARY 15, 2007 (the "EFFECTIVE DATE") by and between
CharterMac Capital LLC (the "COMPANY"), and XXXXXXXX X. X. XXXXXXX
("Executive"). Certain capitalized terms used in this Agreement are used with
the definitions ascribed to them on the attached EXHIBIT A, which is
incorporated into this Agreement by this reference.
WHEREAS, the parties desire to enter into an employment relationship on
the terms and conditions set forth below:
THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. EMPLOYMENT. The Company will employ Executive, and Executive will be employed
by the Company, during the Employment Period (as defined below) on and subject
to the terms and conditions contained in this Agreement. Unless terminated
earlier pursuant to SECTION 4 hereof, the Employment Period shall begin upon the
date hereof ("Effective Date") and shall continue for a period of three (3)
years from such date, until December 31, 2009, ("INITIAL PERIOD"); provided that
such period shall automatically be extended for additional periods of one year
commencing on the third anniversary of the Effective Date, and each anniversary
thereof (such additional period the "ADDITIONAL PERIOD") unless either party has
given written notice to the other that such party does not want to extend the
term of this Agreement, such notice to be given at least sixty (60) days prior
to the end of the Initial Period or the Additional Period(s), as applicable (the
Initial Period and the Additional Period(s), if applicable, collectively, the
"EMPLOYMENT PERIOD").
2. DUTIES. During the Employment Period, Executive will serve as Executive
Managing Director, Head of the Credit Risk Products Division of CharterMac and
will report to Xxxx Xxxxxxxxx, or his successor as the Chief Executive Officer
of CharterMac (the "CEO"). In addition to this position, as part of his duties
he will be the Chief Executive Officer of Centerbrook Holdings LLC ("CENTERBROOK
HOLDINGS"). During the Employment Period, Executive shall perform the duties and
functions that are set forth on EXHIBIT B and such other duties and functions
consistent with Executive's role as a member of senior management of the Company
as shall be assigned to Executive from time to time by the CEO. Executive will
perform such related and other duties as shall be reasonably assigned to
Executive from time to time by the CEO. Executive will devote substantially all
of his business time, best efforts and ability to the business of the Company
and its affiliates, will faithfully and diligently perform Executive's duties
pursuant to this Agreement, will comply with the overall policies established by
the Company and/or CharterMac and will do all things reasonably in Executive's
power to promote, develop and extend the Company's business. Executive shall be
based in the Company's New York City office. Upon request, the Executive shall
also serve as an officer, director or trustee of any entity controlled by,
controlling or under common control (within the meaning of Rule 12b-2
promulgated under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")) with, the Company (an "AFFILIATE") for no additional compensation. Any
compensation paid to the Executive by any Affiliate shall reduce the Company's
obligations hereunder by the amount of such compensation (but shall be deemed to
have been paid by the Company for purposes of calculating any benefit or
severance obligations to the Executive under this Agreement).
3. COMPENSATION AND BENEFITS. During the Employment Period, the Company will pay
and provide Executive as compensation for Executive's services pursuant to this
Agreement the consideration specified and determined in accordance with this
SECTION 3, in each case subject to all withholdings required by applicable law.
a. SALARY. As compensation for services hereunder, during the
Employment Period the Company shall pay the Executive a base
salary, payable in equal installments in accordance with the
Company's procedures, at an annual rate of $390,000, less such
deductions or amounts to be withheld as required by applicable
law and regulations and deductions authorized by the Executive in
writing (the "SALARY). Executive's Salary shall be subject to
increase in the sole and absolute discretion of the Chief
Executive Officer of CharterMac.
b. DISCRETIONARY BONUS. For each fiscal year of service to the
Company, Executive shall be eligible to receive a discretionary
cash bonus ("DISCRETIONARY BONUS") of such amount (if any) as the
CEO may determine in his sole and absolute discretion.
Executive's target Discretionary Bonus shall be 300% of his
Salary, which may be adjusted up or down depending on Executive's
performance as determined in the sole and absolute discretion of
the CEO. Such Discretionary Bonus, if any, will be payable at the
end of February of the year following the year for which the
bonus is awarded. If Executive is awarded a Discretionary Bonus
that is equal to or less than 200% of his then Salary, the
Discretionary Bonus will be paid in cash. If Executive is awarded
a Discretionary Bonus that is greater than 200% of his then
Salary, it shall be paid as follows: (i) the Discretionary Bonus
up to 200% of Executive's Salary shall be paid in cash, and (ii)
for the amount of the Discretionary Bonus greater than 200% of
the Salary, 50% will be paid in cash and 50% will be paid in
restricted stock, which shall vest ratably (and thus become
non-forfeitable) in equal increments of ?, ? and ? on the first,
second and third anniversaries of the date that the Discretionary
Bonus is granted provided, except to the extent otherwise
provided in this Agreement, that Executive is still employed by
the Company on such vesting date.
c. SHARE GRANT. Executive will be granted, effective as of the
Effective Date, restricted common shares of CharterMac valued (as
of the Effective Date) at $750,000 (collectively, the "SHARE
GRANT") under and subject to the terms of the CharterMac Amended
and Restated Incentive Share Plan (the "INCENTIVE PLAN"). The
Share Grant shall vest and become exercisable over the course of
three years in three equal installments on each of the first
three anniversaries of the Effective Date, provided, except to
the extent otherwise provided in this Agreement, that Executive
is continuously employed by the Company on each such vesting
date. Once vested, the Share Grant shall be non-forfeitable.
Except to the extent otherwise provided in this Agreement, the
Share Grant shall be subject to the terms of the applicable award
agreement(s) from CharterMac evidencing the Share Grant.
Notwithstanding anything to the contrary contained herein or in
the documents governing the Share Grant, upon (x) a Change of
Control (as defined EXHIBIT A) or (y) Executive's termination of
employment with the Company and its affiliates, any unvested
portion of the Share Grant (and, in the case of a Change of
Control, any unvested restricted stock issued to the Executive
under Section 3.b.) shall immediately vest in full, unless such
termination is by the Company or any of its affiliates for Cause
or by Executive without Good Reason, in which event any unvested
portion of the Share Grant shall be forfeited. The award
agreement(s) will be in the form generally used for similarly
situated employees.
d. VACATION. Executive shall be entitled to four weeks vacation per
year for each year this Agreement is in effect. All vacation
shall be taken at such times as shall be agreed upon by the CEO.
Executive shall have the right to carry over up to ten (10)
vacation days from one calendar year to the next. In addition to
the twenty (20) vacation days, Executive shall be entitled to
take additional vacation days for religious observances and
Company holidays.
e. BENEFITS. Executive will be entitled to participate in any fringe
benefit and other employee benefit plans and programs generally
available to similarly situated executives of the Company as in
effect from time to time, including medical, dental, life and
disability insurance, to the extent that Executive may be
eligible to do so under the applicable provisions of the plans
and programs providing such benefits.
f. EXPENSES. Executive shall be entitled to reimbursement of amounts
incurred by him in connection with the performance by him of his
duties and obligations hereunder in accordance with the Company's
expense reimbursement policy applicable generally to similarly
situated executives of the Company ("REIMBURSABLE AMOUNTS").
Executive shall apply for all reimbursements for a particular
calendar year not later than forty-five (45) days after it ends,
and payment shall occur not later than two and one-half months
after the end of the calendar year to which the Reimbursable
Amounts relate.
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g. OTHER COMPENSATION. Executive also will be entitled to
participate in bonus and other incentive plans or programs and
co-investment programs established by CharterMac or its
affiliates from time to time, with the amount of such
participation determined in the sole discretion of the CEO.
Executive also will receive a Centerbrook incentive award in the
form attached hereto as EXHIBIT C.
4. TERMINATION; SEVERANCE BENEFITS. The Employment Period and Executive's
employment with the Company will terminate upon the first to occur of the
following and the Company shall make the following payments and no other
payments upon the occurrence of such event, subject in all cases to the terms
and conditions of SECTION 10(E) hereof:
a. DEATH. If Executive dies during the Employment Period, the
Termination Date will be the date of Executive's death. In such
event, the Company shall pay Executive's estate within thirty
(30) days of the date of Executive's death, a death benefit equal
to: (i) Executive's earned but unpaid Salary, any Reimbursement
Amounts for the period prior to termination, any accrued but
unused vacation, and any declared but unpaid Discretionary Bonus
(collectively "Entitlements"); (ii) any rights to which Executive
is entitled in accordance with plan provisions under any employee
benefit plan, fringe benefit or incentive plan ("BENEFIT
Rights"); (iii) additional benefits (if any) in accordance with
the applicable terms of applicable Company plans, programs and
arrangements ("COMPANY ARRANGEMENTS"); and (iv) severance
compensation equal to twelve (12) months of Executive's then
current Salary and 75% of the amount of the Executive's most
recently declared and paid Discretionary Bonus ("SEVERANCE PAY").
In addition, any unvested options awarded to the Executive under
the Incentive Plan and other unvested equity shall fully vest
upon the Termination Date of the Executive. Further, all of
Executive's vested options shall remain exercisable for the
balance of the maximum stated term.
b. TOTAL DISABILITY. If Executive incurs a Total Disability (as
defined below), the Termination Date will be the date Executive
(or Executive's beneficiary or representative) is determined to
have incurred a Total Disability (the "DISABILITY PAYMENT DATE").
In such event the Company shall pay Executive (or Executive's
beneficiary or representative) within thirty (30) days of the
Disability Payment Date, a disability benefit equal to: (i) the
Entitlements; (ii) Benefit Rights; (iii) Company Arrangements;
and (iv) Severance Pay. In addition, any unvested options awarded
to the Executive under the Incentive Plan and other unvested
equity shall fully vest upon the Termination Date of the
Executive, and all of Executive's vested options shall remain
exercisable for the balance of the maximum stated term. For these
purposes, a "TOTAL Disability" shall be deemed to have occurred
if in the judgment of the a physician jointly selected by the
Company and the Executive, the Executive shall become physically
or mentally disabled, whether totally or partially, such that the
Executive is unable to perform the Executive's principal services
hereunder for (A) a period of six consecutive months or (B) for
shorter periods aggregating six months during any twelve-month
period.
c. TERMINATION FOR CAUSE; RESIGNATION WITHOUT GOOD REASON.
Executive's employment may be terminated by the Company for Cause
at any time upon written notice from the Company to Executive.
The Company's notice must set forth the facts or circumstances
constituting Cause and specify the Termination Date. Executive
may resign without the existence of Good Reason at any time upon
not less than thirty (30) days written notice to the Company. The
Company may accept Executive's resignation effective as of the
date specified by Executive in his notice to the Company or it
may accelerate Executive's resignation date to be effective as of
any earlier date following receipt of such notice. Upon the
occurrence of either such event, the Company shall only be
obligated: (i) to pay Executive the Entitlements; and (ii) to
provide Executive with the Benefits Rights and the Company
Arrangements. All of Executive's vested options shall remain
exercisable to the extent required by the terms of the Incentive
Plan and/or other applicable plans. All of Executive's unvested
options shall be forfeited.
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d. TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON.
Executive may be terminated by the Company without Cause upon not
less than thirty (30) days' written notice to Executive. The
Company's notice must specify the Termination Date. Executive may
resign if Good Reason exists upon not less than ten (10) days'
written notice to the Company. Executive's notice must set forth
the facts and circumstances constituting Good Reason and specify
the Termination Date.
If Executive's employment is terminated by the Company without
Cause or Executive terminates his employment with the Company for
Good Reason, Executive shall have no further rights or claims
hereunder or with regard hereto except that, subject to his
execution (within 30 days after delivery to Executive) of a
release running to the Company and its related entities and their
respective partners, shareholders, officers, directors and
employees of all claims relating to his employment and
termination substantially in the form of EXHIBIT D (with only
such reasonable changes therein as may be deemed by counsel to
the Company to be required to comply with applicable law at the
time of delivery of such release) (the "RELEASE"): (i) the
Company will pay Executive a separation payment equal to the
Entitlements and Severance Pay; and (ii) Executive will be
entitled to the Benefits Rights and the Company Arrangements. If
Executive elects not to sign and deliver the Release, then the
Company shall have no obligation to pay Executive the monies and
benefits described in the prior sentence. Further, any unvested
options awarded to the Executive under the Incentive Plan and
other unvested equity shall fully vest upon the Termination Date
of the Executive, and all of Executive's vested options shall
remain exercisable for the balance of the maximum stated term.
e. EXPIRATION OF THE EMPLOYMENT PERIOD. In the event that the
Company does not-renew this Agreement and as a result Executive's
employment terminates, Executive shall have no further rights or
claims hereunder or with regard hereto except that, subject to
his execution (within 30 days after delivery to Executive) of the
Release: (i) the Company will pay Executive a separation payment
equal to the Entitlements and Severance Pay; (ii) Executive will
be entitled to the Benefits Rights and the Company Arrangements;
and (iii) any of Executive's vested options shall remain
exercisable for the balance of the maximum stated term. If
Executive elects not to sign and deliver the Release, then the
Company shall have no obligation to pay Executive the monies and
benefits described in the prior sentence. Further, if the
Executive executes the Release, the vesting of any unvested
options awarded to the Executive under the Incentive Plan and
other unvested equity shall be accelerated by two years.
f. CHANGE IN CONTROL. If, during the Employment Term, the
Executive's employment is terminated by the Company in
anticipation of, or within one year after a Change in Control
(other than as a result of Cause, death or Disability), or by the
Executive for Good Reason within one year after a Change in
Control, the Company shall have no liability or further
obligation to the Executive and the Executive shall have no
further rights or claims hereunder or with regard hereto except
that, subject to his execution (within 30 days after delivery to
Executive) of the Release: (i) the Company will pay Executive the
Entitlements and a separation payment equal to twenty-four months
of Executive's then current Salary and 150% of the amount of the
Executive's most recently declared and paid Discretionary Bonus;
and (ii) Executive will be entitled to the Benefits Rights and
the Company Arrangements; If Executive elects not to sign and
deliver the Release, then the Company shall have no obligation to
pay Executive the monies and benefits described in the prior
sentence. Further, any unvested options awarded to the Executive
under the Incentive Plan and other unvested equity shall fully
vest upon the Termination Date of the Executive, and all of
Executive's vested options shall remain exercisable for the
balance of the maximum stated term. For purposes of this SECTION
4(F), the Termination Date shall be Executive's last day of
employment with the Company.
g. IMMEDIATE CESSATION OF EMPLOYMENT. If the Company gives notice to
Executive pursuant to SUBSECTION (C) above, or Executive gives
notice to the Company pursuant to SUBSECTION (C) above, the
Company may further direct Executive to immediately cease
Executive's activities on behalf of the Company, to remove
Executive's personal belongings from the premises of the Company
and/or to discontinue using any of the Company's facilities.
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h. COOPERATION. The Executive agrees to cooperate with the Company,
during the Employment Period and thereafter (including following
the Executive's termination of employment for any reason), by
making himself reasonably available to testify on behalf of the
Company or any of its Affiliates in any action, suit, or
proceeding, whether civil, criminal, administrative, or
investigative, and to assist the Company, or any Affiliate, in
any such action, suit, or proceeding, by providing information
and meeting and consulting with: (i) the Board or its
representatives or counsel, (ii) representatives or counsel to
the Company, and/or (iii) any Affiliate as reasonably requested..
The Company agrees to reimburse the Executive, for all reasonable
expenses actually incurred in connection with his provision of
testimony or assistance.
5. NON-COMPETITION AGREEMENT.
a. Executive absolutely and unconditionally covenants and agrees
with the Company that, during his employment with the Company or
its Affiliates and for a period of twelve (12) months following
Executive's termination for any reason whatsoever (the
"NONCOMPETE PERIOD") and provided the Company has not waived any
material breach of his post-termination obligations, Executive
will not, either directly or indirectly, solely or jointly with
any other person or persons, as an employee, consultant, or
advisor (whether or not engaged in business for profit), or as an
individual proprietor, partner, shareholder, director, officer,
joint venturer, investor, lender, or in any other capacity,
engage in a Competitive Business (as defined in EXHIBIT A) (i) as
conducted as of the date of execution of this Agreement; (ii) as
conducted during the term of this Agreement; or (iii) as proposed
to be conducted by the Company Group as of the Termination Date
(collectively, "COMPETITION"). Notwithstanding the foregoing,
Executive may return to work for IXIS Capital Markets North
America, Inc. or its successors without complying with the
Noncompete Period.
b. If a court or arbitration panel concludes through appropriate
proceedings that the Executive has breached the covenant set
forth in this SECTION 5, the term of the covenant shall be
extended for a term equal to the period for which the Executive
is determined to have breached the covenant.
6. COVENANT NOT TO DISCLOSE. Executive agrees that, by virtue of the performance
of the normal duties of his position with the Company and by virtue of the
relationship of trust and confidence between the Executive and the Company, he
possesses certain data and knowledge of operations of the Company Group which
are proprietary in nature and confidential. The Executive covenants and agrees
that he will not, at any time, whether during the term of this Agreement or
otherwise, reveal, divulge or make known to any person (other than the Company
Group) or use for his own account, any confidential or proprietary record, data,
model, trade secret, pricing policy, bid amount, bid strategy, rate structure,
personnel policy, method or practice of obtaining or doing business by the
Company Group, or any other confidential or proprietary information whatsoever
(the "CONFIDENTIAL Information"), whether or not obtained with the knowledge and
permission of the Company and whether or not developed, devised or otherwise
created in whole or in part by the efforts of the Executive. The Executive
further covenants and agrees that he shall retain all such knowledge and
information which he shall acquire or develop respecting such Confidential
Information in trust for the sole benefit of the Company and its successors and
assigns. Executive shall not, without the prior written consent of the Company,
unless compelled pursuant to the order of a court or other governmental or legal
body having jurisdiction over such matter, communicate or divulge any such
Confidential Information to anyone other than the Company and those designated
by it. In the event Executive is compelled by order of a court or other
governmental or legal body to communicate or divulge any Confidential
Information to anyone other than the Company and those designated by it,
Executive shall promptly notify the Company of any such order and shall
cooperate fully with the Company (and the owner of such Confidential
Information) in protecting such information to the extent possible under
applicable law. Nothing in this SECTION 6 is intended to, or shall, prohibit
Executive from discuss any matters with his attorney for the purposes of seeking
legal advice, provided that Executive notifies his attorney of Executive's
obligations under this section.
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7. NON-INTERFERENCE COVENANT. Executive covenants and agrees that he will not,
at any time, whether during the Employment Period and the Noncompete Period,
directly or indirectly, for whatever reason, whether for his own account or for
the account of any other person, firm, company or other organization: (i)
solicit for employment, employ, or otherwise deal with in a manner which
interferes with the Company Group's relationship with any person or entity who
is an employee, officer, director or independent contractor of the Company Group
at any time or who constitutes a bona fide prospective employee, officer,
trustee, director or independent contractor of the Company Group, unless such
person or entity shall no longer be actively employed, or engaged by the Company
Group and shall no longer constitute a bona fide prospective employee, officer,
director or independent contractor of the Company Group; provided, however,
Executive will not be deemed to be in violation of this clause (i) if an
employee of the Company Group is hired by Executive's future employer provided
that Executive did not otherwise violate this provision; (ii) interfere in any
manner with any of the Company Group's contracts or relationships with any
investor, customer, client or supplier (of services or tangible or intangible
property) of the Company Group, or any person or entity who is a bona fide
prospective, investor customer, client or supplier of the Company Group; (iii)
solicit or otherwise interfere with any existing or proposed contract or
relationship between the Company Group and any other party or (iv) speak or
write in any manner which is disparaging of the Company Group, its business
practices, employees, officers, trustees or directors.
8. BUSINESS MATERIALS AND PROPERTY DISCLOSURE. All written materials, records
and documents made by the Executive or coming into his possession concerning the
business or affairs of the Company Group shall be the sole property of the
Company Group and, upon termination of his employment with the Company, the
Executive shall deliver the same to the Company and shall retain no copies. The
Executive shall also return to the Company all other property in his possession
owned by the Company upon termination of his employment.
9. BREACH BY EXECUTIVE. It is expressly understood, acknowledged and agreed by
the Executive that (i) the restrictions contained in SECTIONS 5, 6, 7 and 8 of
this Agreement represent a reasonable and necessary protection of the legitimate
interests of the Company and that his failure to observe and comply with his
covenants and agreements in those Sections will cause irreparable harm to the
Company; (ii) it is and will continue to be difficult to ascertain the nature,
scope and extent of the harm; and (iii) a remedy at law for such failure by
Executive will be inadequate. Accordingly, it is the intention of the parties
that, in addition to any other rights and remedies which the Company may have in
the event of any breach of said Sections, the Company shall be entitled, and is
expressly and irrevocably authorized by Executive, to demand and obtain specific
performance, including without limitation temporary and permanent injunctive
relief, and all other appropriate equitable relief against Executive in order to
enforce against Executive, or in order to prevent any breach or any threatened
breach by Executive, of the covenants and agreements contained in those Sections
in any court of competent jurisdiction without the need to post any bond or
undertaking. If any restriction with regard to competition is found by any court
of competent jurisdiction, or an arbitrator, to be unenforceable because it
extends for too long a period of time or over too great a range of activities,
or in too broad a geographic area, it shall be interpreted to extend over the
maximum period of time, range of activities or geographic area to which it may
be enforceable and the Company shall have no further obligations hereunder.
10. GENERAL PROVISIONS.
a. Except insofar as Executive may be subject to general policies
adopted by the Company from time to time, this Agreement contains
the entire agreement between the parties with respect to its
subject matter, and all prior other representations, warranties,
conditions or agreements relating to the subject matter of this
Agreement, whether or not reduced to writing in whole or part,
are hereby revoked, terminated and declared to be null and void.
There shall be no contractual or similar restrictions on
Executive's right to terminate his employment with the Company or
its affiliates, or on his post-employment activities, other than
restrictions expressly set forth in this Agreement.
b. The waiver by any party of any breach or default of any provision
of this Agreement will not operate or be construed as a waiver of
any subsequent breach or default of the same or any other
provision of this Agreement. This Agreement may not be changed
orally, but only by an instrument in writing duly executed on
behalf of the party against which enforcement of any waiver,
change, modification, consent or discharge is sought.
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c. This Agreement is binding upon and will inure to the benefit of
the Company, Executive and their respective successors, assigns,
heirs and legal representatives. Insofar as Executive is
concerned, this Agreement is personal and Executive's duties
under it may not be assigned or delegated. The Company may assign
or delegate its rights or obligations under this Agreement to any
successor owner of the Company's business, and, if ownership of
the Company's business is transferred or the Company is merged
with or consolidated into another entity, the Company will cause
the successor to assume all of the Company's obligations under
this Agreement.
d. The existence, terms, and conditions of this Agreement are and
shall be deemed to be fully confidential and shall not be
disclosed by Executive or the Company to any person or entity,
except: (i) as may be required by law; (ii) by Executive to his
accountant to the extent necessary to prepare his tax returns;
(iii) by Executive to his family and attorney; (iv) by the
Company or any Affiliate of the Company to their attorneys and
human resources personnel or to any entity which shall have
executed a confidentiality agreement with the Company or any
Affiliate of the Company; (v) by Executive to any lender,
condominium or cooperative board, or other entity or person that
may require employment or other financial information for bona
fide reasons that are not competitive with the Company, provided
that the financial terms of this Agreement may not be disclosed
to any potential employer that is a competitor of the Company,
and that Executive gives each such person to whom disclosure is
made notice of the confidentiality provisions of this Agreement.
Notwithstanding the foregoing Executive shall not be prohibited
from disclosing the general terms of his compensation to
prospective Employers.
e. The Company may withhold from any and all amounts payable to
Executive hereunder pursuant to such federal, state and local
taxes as may be required to be withheld pursuant to any
applicable laws or regulation. The Executive is solely
responsible for the payment of any tax liability (including any
taxes and penalties arising under Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code")) that Executive
incurs as a result of any payments or benefits that the Executive
receives pursuant to this Agreement. The Company shall not have
any obligation to pay the Executive for any such tax liabilities.
Nevertheless, if the Company reasonably determines that any
payments or benefits pursuant to SECTION 4 above would cause the
Executive to incur liability for additional tax and/or penalties
under Section 409A of the Code, then the Company (of its own
initiative or upon request of the Executive) may suspend such
payments or benefits until the end of the six-month period
immediately following termination of the Executive's employment
(the "409A Suspension Period"). As soon as reasonably practical
after the end of the 409A Suspension Period, the Company will
make a lump-sum payment to the Executive, in cash, in an amount
equal to any payments and benefits that the Company does not make
on account of the 409A Suspension Period. At the close of the
409A Suspension Period, the Executive will receive any remaining
payments and benefits due pursuant to Section 4 in accordance
with the terms of that Section (as if there had not been any
suspension beforehand). Notwithstanding the foregoing, in the
event that this Agreement or any payment or benefit paid to the
Executive hereunder is deemed to be subject to Section 409A of
the Code in a manner that imposes additional tax and/or penalties
thereunder, Executive and the Company agree to negotiate in good
faith to adopt such amendments that are necessary to comply with
Section 409A of the Code in a manner that would not impose
additional tax and/or penalties thereunder or to exempt such
payments or benefits from Section 409A of the Code.
f. In the event of any dispute between the Company and Executive,
including with regard to this Agreement or Executive's employment
with or termination from the Company, other than an action for
injunctive relief pursuant to SECTIONS 5, 6, 7 AND 8 hereof, such
dispute shall be resolved pursuant to the employment arbitration
rules of the American Arbitration Association ("AAA") by
arbitration conducted in New York City, New York. The decision of
the arbitrator or arbitrators shall be final and binding on the
parties hereto and may be entered in any court having
jurisdiction. Each party shall bear its own costs of arbitration,
including without limitation, attorneys' fees and witness
expenses. All other costs of the arbitration, including the fees
of the arbitrator, the cost of any record or transcript of the
arbitration, administrative fees and other fees and costs shall
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be paid one half by the Company and one half by the Executive.
Notwithstanding the foregoing, the arbitrator may, in his or her
discretion, award reasonable attorneys' fees (in addition to any
other damages, expenses or relief awarded) to the prevailing
party.
g. All notices hereunder shall be given in writing and shall be
either delivered personally, or sent by certified or registered
mail, return receipt requested, addressed to the other party at
such party's address on the books of the Company or at the
Company's executive offices (to the attention of the General
Counsel), as the case may be. Notices shall be deemed given when
received, or two (2) business days after mailing, whichever is
earlier.
h. The parties have entered into this Agreement in the belief that
its provisions are valid, reasonable and enforceable. If any one
or more of the provisions shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision in this
Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been
contained therein.
i. Executive acknowledges that the prohibitions and restrictions set
forth in this Agreement are reasonable and necessary for the
protection of the business of the Company, that the restrictions
and prohibitions here will not prevent him from earning a
livelihood after the termination of Executive's employment and
that part of the compensation paid and benefits provided to
Executive are in consideration for entering into this Agreement.
j. This Agreement is governed by, and is to be construed in
accordance with, the law of the State of New York without
reference to the conflicts of laws principles thereof. This
Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
k. The Executive shall perform all services in accordance with the
applicable policies, procedures and rules established by the
Company or CharterMac. In addition, the Executive, shall comply
with all laws, rules and regulations that are generally
applicable to the Company, its Affiliates and their employees,
trustees, directors and officers. To the extent that the terms of
this Agreement conflict with any rule, policy, procedure
established by the Company, the terms of this Agreement will
control.
l. The section headings contained in this Agreement are solely for
the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or
interpretation of this Agreement. All references in this
Agreement to Sections are to sections of this Agreement, unless
otherwise indicated. Further, the parties hereto have
participated jointly in the negotiation and drafting of this
Agreement. If any ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if
drafted jointly by the parties and no presumptions or burden of
proof will arise favoring or disfavoring any party by virtue of
authorship of any provisions of this Agreement.
m. The provisions of SECTIONS 4(H), 5, 6, 7, 9, 10(F) AND 11 of this
Agreement shall survive and shall continue to be binding upon the
Executive and the Company notwithstanding the termination of this
Agreement for any reason whatsoever.
n. The parties warrant and represent that each has the legal
capacity and authority to enter into this Agreement.
11. INDEMNIFICATION AND D&O INSURANCE. The Company shall indemnify the Executive
and provide Executive with the advancement of expenses to the fullest extent
provided for like senior executives providing services for the Company. During
the Employment Period and for a period of six years thereafter, the Company
shall maintain directors' and officers' insurance coverage for Executive.
8
12. LEGAL FEES. The Company shall reimburse the Executive for the Executive's
reasonable legal expenses incurred in negotiating the terms of this Agreement in
an amount not to exceed $5,000.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the Effective Date.
EXECUTIVE: CHARTERMAC CAPITAL LLC
__________________________________ By__________________________________
Name: XXXXXXXX X.X. XXXXXXX Name: XXXX X. XXXXXXXXX
Title: CHIEF EXECUTIVE OFFICER
9
EXHIBIT A
DEFINITIONS
When used in the Executive Employment Agreement to which this EXHIBIT A is
appended (the "AGREEMENT"), the following terms have the following meanings. Any
capitalized terms used below which are defined in the Agreement are used with
the meanings ascribed to them in the Agreement.
"CAUSE" means: (A) the Executive's conviction of, plea of NOLO CONTENDERE to,
plea of guilty to, or written admission of the commission of, a felony; (B) any
breach by the Executive of any material provision of this Agreement; (C) any act
by the Executive involving dishonesty, moral turpitude, fraud or
misrepresentation with respect to his duties for the Company or its Affiliates,
which has caused material harm to the Company; (D) Executive's failure to follow
reasonable directions from the CEO, the board of directors of the Company, or
the board of directors of CharterMac; (E) any violation of a provision of the
written Code of Conduct of the Company or other similar written policies of the
Company (or failure to agree to observe the code of conduct) as in effect from
time to time, which violation has a material adverse effect on the Company or
its Affiliates; or (F) gross negligence or willful misconduct on the part of the
Executive in the performance of his duties, responsibilities or obligations as
set forth in this Agreement; provided, that in the case of a breach set forth in
clause (B) above, such breach shall continue for a period of thirty (30) days
following written notice thereof by the Company to the Executive.
"CHANGE OF CONTROL" as used herein shall be deemed to have occurred if: (i) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), which is not
an Affiliate of CharterMac is or becomes the "beneficial owner" (as defined in
Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of
securities of CharterMac representing 50.1% or more of the combined voting power
of CharterMac's then outstanding securities; (ii) any consolidation or merger of
CharterMac with or into any other corporation or other entity or person (other
than an Affiliate of CharterMac) in which the shareholders of CharterMac prior
to such consolidation or merger own or owns less than 50.1% of CharterMac's
voting power immediately after such consolidation or merger (excluding any
consolidation or merger effected exclusively to change the domicile of
CharterMac); (iii) a sale of all or substantially all of the assets of
CharterMac or (iv) a liquidation or dissolution of CharterMac; provided, that no
Change of Control shall be deemed to occur with respect to any of the
above-referenced events if after such event Executive continues to be an
employee of a company that is an Affiliate of CharterMac and continues to have
duties and functions and compensation consistent with those referenced herein
(unless Executive refuses or terminates such employment without Good Reason).
"COMPANY GROUP" means CharterMac or its Affiliates, including, without
limitation, American Mortgage Acceptance Company, Charter Mac Corporation,
CharterMac Capital Company LLC, CharterMac Capital LLC, CharterMac Mortgage
Capital Corporation, CharterMac Mortgage Partners Corp., Centerbrook Holdings
LLC, ARCap Investors, L.L.C. and ARCap REIT, Inc.
"COMPETITIVE BUSINESS" means any of the businesses of the Company Group,
including, without limitation:
(A) engaging, participating, or being involved directly or indirectly
in any respect in the business of analyzing, structuring, marketing, investing
in or assisting any person or entity in the analysis, structuring, marketing or
investing in (i) real estate related asset-backed securities, including, but not
limited to, collateralized debt obligation vehicles, or (ii) real estate
investments relating to the allocation of benefits under the Community
Reinvestment Act.
(B) engaging, participating, or being involved directly or indirectly
in any respect in the business of analyzing, investing in, purchasing or
assisting any person or entity in the analysis, investment in or purchase of
non-investment grade Commercial Mortgage Backed Securities (including servicing
loans or originating loans) other than for Executive's own account or by way of
investment by Executive in less than five percent (5%) of the outstanding stock
or other securities or a publicly traded entity;
10
(C) arranging for or providing, directly or indirectly, debt and/or
equity financing products or services to developers or owners of real property
other than for Executive's own account or by way of investment by Executive in
less than five percent (5%) of the outstanding stock or other securities or a
publicly traded entity;
(D) engaging, participating, or being involved directly or indirectly
in any respect in the business of the syndication and sale of housing tax
credits, historic rehabilitation tax credits, new markets tax credits or home
ownership tax credits other than for Executive's own account or by way of
investment by Executive in less than five percent (5%) of the outstanding stock
or other securities or a publicly traded entity; or
(E) providing credit intermediation relating to debt or equity
interests in real property other than for Executive's own account or by way of
investment by Executive in less than five percent (5%) of the outstanding stock
or other securities or a publicly traded entity.
"FISCAL YEAR" means the fiscal year of the Company which is the period
commencing January 1 and ending December 31 of each calendar year.
"GOOD REASON" shall mean the occurrence of the following events without the
Executive's prior written consent, provided that such occurrence is not cured
within thirty (30) days of the Executive giving the Company written notice
thereof: (A) assignment of the Executive to duties materially inconsistent with
the Executive's positions as described in Section 1 hereof, or any significant
diminution in the Executive's duties or responsibilities, other than in
connection with the termination of the Executive's employment for Cause or Total
Disability or by the Executive other than for Good Reason; (B) any material
breach by the Company of its obligations under this Agreement which continues
for a period of thirty (30) days after notice to the Company; (C) a change in
the location of the Executive's principal place of employment to a location
outside of the general New York metropolitan area; (D) there is a reduction in
the Executive's Base Salary or a material reduction in the aggregate package of
benefits provided to the Executive under this Agreement; (E) the Company's
delivery to the Executive of the Company's notice not to extend the term of this
Agreement; or (F) any failure of the Company to obtain the assumption in writing
of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company within 15 days after any merger,
consolidation, sale or similar transaction.
"TERMINATION DATE" means the effective date of termination of the Employment
Period and Executive's employment with the Company, regardless of the cause of
such termination.
11
EXHIBIT B
Job Description
Titles:
o Executive Managing Director of CharterMac, Head of Credit Risk Products
Division (CRP)
o CEO of Centerbrook Holdings LLC
Duties:
o Develop and direct the execution of the annual and five-year business plans
for the CRP division, that will include, but not be limited to, (i)
attainment of the entity's original goals with respect to affordable
housing products and (ii) growth and diversification into other product
lines
o Serve as a member of CharterMac's Strategic Planning Group
o Serve as a board member of Centerbrook Holdings LLC
o Cooperate with and assist other executives of CharterMac to further the
company's success in its various divisions and business lines
12
EXHIBIT C
[Form to be attached following this divider page]
13
EXHIBIT D
FORM OF GENERAL RELEASE
It hereby is agreed, by and among CharterMac Capital LLC ("EMPLOYER"),
and _________________ ("Employee"), as follows:
1. [The Employee submits, and the Employer accepts, his
permanent resignation from employment effective ___________][The Employer
requests and the Employee submits to his termination from employment effective
___________]. Employee hereby waives any and all rights or claims to
reinstatement or reemployment by the Employer. Reference is made to that certain
agreement dated as of ___________, 2007 between the Employer and the Employee
(the "Employment Agreement").
2. In consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged by the
Employee, Employee, for himself, his heirs, executors, administrators,
successors and assigns, hereby releases and forever discharges the Employer,
including any and all of Employer's subsidiaries, affiliates or related business
entities (including, without limitation, American Mortgage Acceptance Company,
CharterMac, Charter Mac Corporation, CharterMac Capital Company LLC, CharterMac
Mortgage Capital Corporation, CharterMac Mortgage Partners Corp., Centerbrook
Holdings LLC and ARCap Investors, L.L.C.), its or their past, present and future
owners, partners, directors, officers, agents, representatives, and employees or
any of its or their subsidiaries, affiliates, parents, or related business
entities, and its or their respective heirs, executors, administrators,
successors and assigns, of, from and/or for all manner of actions, proceedings,
causes of action, suits, debts, sums of money, accounts, contracts,
controversies, agreements, promises, damages, judgments, claims, and demands
whatsoever, known or unknown, whether arising in law or equity, out of any
federal, state or city constitution, statute, ordinance, bylaw or regulation, or
under the Employment Agreement, arising out of or relating to Employee's
employment by the Employer, including but not limited to the termination of such
employment, all claims of discrimination on the basis of age, alienage,
citizenship, creed, disability, gender, handicap, marital status, national
origin, race, religion sex or sexual orientation, and, without limitation, any
claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Equal Pay Act, the Rehabilitation Act, the
Americans With Disabilities Act, the New York State Human Rights Law, the New
York City Human Rights Law, and any other federal, state or local statute,
ordinance, rule, regulation or order (collectively, "Claims" or "Damages"),
which Employee ever had, now has, or which he, or his heirs, executors,
administrators, successors or assigns can or may have for, or by reason of, any
matter, cause, event, act, omission, transaction or occurrence up to and
including the date of the execution of this Release, arising out of or relating
to Employee's employment by the Employer, including but not limited to the
termination of such employment.
3. The Employer, for itself, its successors, assigns and legal
representatives, hereby releases and forever discharges the Employee, and the
Employee's heirs, executors, administrators, legal representatives and assigns,
from and against any and all Claims or Damages which the Employer ever had, now
has for, or by reason of, any matter, cause, event, act, omission, transaction
or occurrence up to and including the date of the execution of this Release,
arising out of or relating to Employee's employment by the Employer; provided,
however, that the Employer is not releasing any claims ("Retained Claims") with
respect to any act or failure to act by the Employee that constitutes Employee's
bad faith, gross negligence or willful misconduct or any fraudulent,
intentionally improper, unauthorized or unlawful acts by the Employee, with the
understanding that the Employer is not currently aware of any such acts; and
provided further that any Retained Claims that are not brought in a legal
proceeding against the Employee within eighteen (18) months following the date
of this Release shall be deemed released and forever discharged from and after
the date which is eighteen (18) months following the date of this Release.
4. (a) Except with respect to continuing obligations under and
amounts owed pursuant to the Employment Agreement and any vested benefits under
the Employer's employee benefit plans or those of its subsidiaries or
affiliates, Employee covenants not to in any way cause to be commenced or
prosecuted, or to commence, maintain or prosecute any action, charge, complaint
14
or proceeding of any kind, on his own behalf or as a member of any alleged class
of persons, in any court or before any administrative or investigative body or
agency (whether public, quasi-public or private), against the Employer, or any
of its subsidiaries, parents, affiliates, related business entities, or their
respective successors or assigns, or any individual now or previously employed
by the Employer, or by any of its subsidiaries, parents, affiliates, or related
business entities and their successors and assigns, with respect to any act,
omission, transaction or occurrence up to and including the date of this
Agreement.
(b) Employee further represents that he has not
commenced, maintained, prosecuted or participated in any action, charge,
complaint or proceeding of any kind (on his own behalf and/or on behalf of any
other person and/or on behalf of or as a member of any alleged class of persons)
that is presently pending in any court, or before any administrative or
investigative body or agency (whether public, quasi-public, or private), against
or involving the Employer, or any of the Employer's subsidiaries, parents,
affiliates, or related business entities, or their successors or assigns or any
individual now or previously employed by the Employer, or by any of its
subsidiaries, parents, affiliates, or related business entities or their
successors and assigns.
(c) The Employer covenants not to in any way cause to
be commenced or prosecuted, or to commence, maintain or prosecute any action,
charge, complaint or proceeding of any kind in any court or before any
administrative or investigative body or agency (whether public, quasi-public or
private), against the Employee with respect to any act, omission, transaction or
occurrence up to an including the date of this Release relating to the
Employer's employment of the Employee or the termination of his employment;
provided, however, that the Employer is not waiving and shall not waive such
right with respect to any act or failure to act by the Employee that constitutes
Employee's bad faith, gross negligence or willful misconduct or any fraudulent,
intentionally improper, unauthorized or unlawful acts by the Employee. [As of
the date of this Release, the Employer is not aware of any act or failure to act
by the Employee that would give rise to any action, charge, complaint or
proceeding of any kind in any court or before any administrative or
investigative body or agency (whether public, quasi-public or private), against
the Employee.] 1
(d) The Employer represents that it has not commenced,
maintained, prosecuted or participated in any action, charge, complaint or
proceeding of any kind that is presently pending in any court, or before any
administrative or investigative body or agency (whether public, quasi-public, or
private), against or involving the Employee or relating to the Employee's
employment with the Employer or the termination of his employment.
5. Employee acknowledges that he has been fully and fairly
represented by counsel in connection with the execution and delivery of this
Release, the terms of which have been explained to him.
6. Employee acknowledges that he has considered fully the
terms of this Agreement before signing; that he has read this Agreement in its
entirety and understands its terms; that he agrees to all terms and conditions
contained herein; that he is signing this Agreement knowingly and voluntarily;
and, that he intends to abide by its terms in all respects.
7. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York without regard to New York's
choice of law provisions. Any action to enforce this Agreement shall be brought
in the New York State Supreme Court, County of New York. The parties hereby
consent to such jurisdiction.
8. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(1) This bracketed sentence will be included in the Release if at the time of
the execution of the Release, the Employer is able to make such statement. If at
that time the Employer is not able to make such statement, the Release must be
executed without such sentence.
15
------------------------ ------------------------------
Date [Employee]
Signed before me this
____ day of _____, [Year]
--------------------------
Notary Public
CHARTERMAC CAPITAL LLC
________________________ By:______________________________
Date Name:
Title:
Signed before me this
____ day of _____, [Year]
--------------------------
Notary Public
[If at time of execution the Employee is 40 years of age or older, this General
Release is to be modified to comply with the provisions of the Older Workers
Benefit Protection Act or similar legislation]
LEGAL_US_E # 71823988.7
