AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 2004
AMENDMENT NO. 6
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NEW YORK MORTGAGE TRUST, INC.
(Exact Name of Registrant as Specified in its Governing Instruments)
1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 634-9400
(Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices)
STEVEN B. SCHNALL
DAVID A. AKRE
CO-CHIEF EXECUTIVE OFFICERS
NEW YORK MORTGAGE TRUST, INC.
1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 634-9400
(212) 655-6269 (TELECOPY) (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
COPIES TO:
DANIEL M. LEBEY, ESQ. KAREN A. DEWIS, ESQ.
HUNTON & WILLIAMS LLP CHRISTOPHER E. BROWN, ESQ.
RIVERFRONT PLAZA, EAST TOWER MCDERMOTT WILL & EMERY LLP
951 E. BYRD STREET 600 13TH STREET, N.W.
RICHMOND, VIRGINIA 23219-4074 WASHINGTON, D.C. 20005-3096
(804) 788-8200 (202) 756-8000
(804) 788-8218 (TELECOPY) (202) 756-8087 (TELECOPY)
|
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 36. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Exhibits
The following exhibits, as noted, are filed herewith or previously have been filed.
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
1.01 Form of Underwriting Agreement.******
3.01 Articles of Amendment and Restatement of New York Mortgage
Trust, Inc.******
3.02 Bylaws of New York Mortgage Trust, Inc.******
4.01 Form of Common Stock Certificate.******
5.01 Opinion of Venable LLP.******
8.01 Opinion of Hunton & Williams LLP with respect to certain tax
matters.******
10.01 Promissory Note, issued by The New York Mortgage Company,
LLC on August 31, 2003, as amended and restated, on December
23, 2003, in the principal amount of $2,574,352.00, payable
to Joseph V. Fierro.*
10.02 Promissory Note, issued by The New York Mortgage Company,
LLC on August 31, 2003, as amended and restated, on December
23, 2003, in the principal amount of $12,132,550.00 payable
to Steven B. Schnall.*
10.03 Master Repurchase Agreement between Credit Suisse First
Boston Mortgage Capital LLC, The New York Mortgage Company,
LLC, Steven B. Schnall and Joseph V. Fierro, dated October
2, 2002.*
10.04 Amendment No. 1 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated December 4, 2002.*
10.05 Amendment No. 2 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated February 20, 2003.*
10.06 Amendment No. 3 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated April 22, 2003.*
10.07 Amendment No. 4 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated July 1, 2003.*
10.08 Amendment No. 5 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated July 7, 2003.*
10.09 Amendment No. 6 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated July 31, 2003.*
10.10 Amendment No. 7 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated August 4, 2003.*
10.11 Amendment No. 8 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated August 9, 2003.*
|
II-1
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.12 Amendment No. 9 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated August 28, 2003.*
10.13 Amendment No. 10 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated September 17, 2003.*
10.14 Amendment No. 11 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated October 1, 2003.*
10.15 Amendment No. 12 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated October 31, 2003.*
10.16 Amendment No. 13 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated December 19, 2003.*
10.17 Credit Note between HSBC Bank USA and The New York Mortgage
Company LLC, dated as of March 30, 2001.*
10.18 Credit and Security Agreement between HSBC Bank USA and The
New York Mortgage Company LLC, dated as of March 30, 2001.*
10.19 First Amended Credit Note, dated as of May 24, 2001, between
HSBC Bank USA and The New York Mortgage Company LLC, dated
as of March 30, 2001.*
10.20 First Amended Credit and Security Agreement, dated as of May
24, 2001, between HSBC Bank USA and The New York Mortgage
Company LLC, dated as of March 30, 2001.*
10.21 Second Amended Credit Note, dated as of June 18, 2001,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.22 Second Amended Credit and Security Agreement, dated June 18,
2001, between HSBC Bank USA and The New York Mortgage
Company LLC, dated as of March 30, 2001.*
10.23 Third Amended Credit Note, dated as of November 13, 2001,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.24 Third Amended Credit and Security Agreement, dated as of
November 13, 2001, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.*
10.25 Fourth Amended Credit Note, dated as of January 16, 2002,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.26 Fourth Amended Credit and Security Agreement, dated as of
January 16, 2002, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.*
10.27 Fifth Amended Credit Note, dated as of April 29, 2002,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.28 Fifth Amended Credit and Security Agreement, dated as of
April 29, 2002, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.*
10.29 Extension Letter, dated August 26, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.30 Extension Letter, dated September 11, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.31 Extension Letter, dated October 28, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.32 Extension Letter, dated November 27, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
|
II-2
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.33 Extension Letter, dated April 15, 2003, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.34 Extension Letter, dated June 24, 2003, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.35 Guaranty between HSBC Bank USA, The New York Mortgage
Company LLC and Steven Schnall, dated as of March 30,
2001.**
10.36 Guaranty between HSBC Bank USA, The New York Mortgage
Company LLC and Joseph V. Fierro, dated as of March 30,
2001.**
10.37 First Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of May 24,
2001.*
10.38 First Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of May
24, 2001.*
10.39 Warehousing Credit Agreement, among The New York Mortgage
Company LLC, Steven B. Schnall, Joseph V. Fierro and
National City Bank of Kentucky, dated January 25, 2002.*
10.40 First Amendment, dated April 2002, to Warehousing Credit
Agreement, among The New York Mortgage Company LLC, Steven
B. Schnall, Joseph V. Fierro and National City Bank of
Kentucky, dated January 25, 2002.*
10.41 Second Amendment, dated June 3, 2002, to Warehousing Credit
Agreement, among The New York Mortgage Company LLC, Steven
B. Schnall, Joseph V. Fierro and National City Bank of
Kentucky, dated January 25, 2002.*
10.42 Third Amendment, dated November , 2002, to Warehousing
Credit Agreement, among The New York Mortgage Company LLC,
Steven B. Schnall, Joseph V. Fierro and National City Bank
of Kentucky, dated January 25, 2002.*
10.43 Fourth Amendment, dated June 15, 2003, to Warehousing Credit
Agreement, among The New York Mortgage Company LLC, Steven
B. Schnall, Joseph V. Fierro and National City Bank of
Kentucky, dated January 25, 2002.*
10.44 Warehouse Promissory Note, between The New York Mortgage
Company, LLC and National City Bank of Kentucky, dated
January 25, 2002.*
10.45 Amended and Restated Warehouse Promissory Note, between The
New York Mortgage Company, LLC and National City Bank of
Kentucky, dated June 3, 2002.*
10.46 Warehousing Credit Agreement, between New York Mortgage
Company, LLC, Steven B. Schnall, Joseph V. Fierro and
National City Bank of Kentucky, dated as of January 25,
2002.*
10.47 Pledge and Security Agreement, between The New York Mortgage
Company, LLC and National City Bank of Kentucky, dated as of
January 25, 2002.*
10.48 Unconditional and Continuing Guaranty of Payment by Steven
B. Schnall to National City Bank of Kentucky, dated January
25, 2002.*
10.49 Unconditional and Continuing Guaranty of Payment by Joseph
V. Fierro to National City Bank of Kentucky, dated January
25, 2002.*
10.50 Amended and Restated Unconditional and Continuing Guaranty
of Payment by Steven B. Schnall to National City Bank of
Kentucky, dated June 15, 2003.*
10.51 Amended and Restated Unconditional and Continuing Guaranty
of Payment by Joseph V. Fierro to National City Bank of
Kentucky, dated June 15, 2003.*
10.52 Inter-Creditor Agreement, between National City Bank of
Kentucky and HSBC Bank USA, dated January 25, 2002.*
10.53 Whole Loan Purchase and Sale Agreement/Mortgage Loan
Purchase and Sale Agreement between The New York Mortgage
Company, LLC and Greenwich Capital Financial Products, Inc.,
dated as of September 1, 2003.*
10.54 Whole Loan Custodial Agreement/Custodial Agreement between
Greenwich Capital Financial Products, Inc., The New York
Mortgage Company, LLC and LaSalle Bank National Association,
dated as of September 1, 2003.*
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II-3
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.55 Form of New York Mortgage Trust, Inc. 2004 Stock Incentive
Plan.***
10.56 Contribution Agreement by and among Steven B. Schnall and
Joseph V. Fierro and New York Mortgage Trust, Inc., dated
December 22, 2003.**
10.57 Agreement by and among New York Mortgage Trust, Inc., The
New York Mortgage Company, LLC, Steven B. Schnall and Joseph
V. Fierro, dated December 23, 2003.**
10.58 Sixth Amended Credit and Security Agreement, dated as of
August 11, 2003, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.**
10.59 Temporary Overadvance Note, dated as of August 11, 2003,
between HSBC Bank USA and The New York Mortgage Company
LLC.**
10.60 Second Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of June
18, 2001.**
10.61 Second Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of June
18, 2001.**
10.62 Third Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of
November 13, 2001.**
10.63 Third Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of
November 13, 2001.**
10.64 Fourth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of January
16, 2002.**
10.65 Fourth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of
January 16, 2002.**
10.66 Fifth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of April
29, 2002.**
10.67 Fifth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of April
29, 2002.**
10.68 Sixth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of August
11, 2003.**
10.69 Sixth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of
August 11, 2003.**
10.70 Credit and Security Agreement by and among HSBC Bank USA,
National City Bank of Kentucky and The New York Mortgage
Company LLC, dated as of December 15, 2003.**
10.71 Guaranty between HSBC Bank USA, National City Bank of
Kentucky, The New York Mortgage Company LLC and Steven B.
Schnall, dated as of December 15, 2003.**
10.72 Guaranty between HSBC Bank USA, National City Bank of
Kentucky, The New York Mortgage Company LLC and Joseph V.
Fierro, dated as of December 15, 2003.**
10.73 Credit Note by and between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of December 15, 2003.**
10.74 Credit Note by and between National City Bank of Kentucky
and The New York Mortgage Company LLC, dated as of December
15, 2003.**
10.75 Swingline Note by and between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of December 15, 2003.**
10.76 Custodial Agreement by and among Greenwich Capital Financial
Products, Inc., The New York Mortgage Corporation LLC and
Deutsche Bank Trust Company Americas, dated as of August 1,
2003.**
10.77 Master Mortgage Loan Purchase and Interim Servicing
Agreement by and between The New York Mortgage Company
L.L.C. and Greenwich Capital Financial Products, Inc., dated
as of August 1, 2003.**
10.78 Subordination and Pledge Agreement by and between HSBC Bank
USA and Steven B. Schnall, dated as of December 15, 2003.**
|
II-4
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.79 Subordination and Pledge Agreement by and between HSBC Bank
USA and Joseph V. Fierro, dated as of December 15, 2003.**
10.80 Second Amended and Restated Promissory Note, issued by The
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated, on December 23, 2003 and
February 26, 2004, in the principal amount of $11,432,550
payable to Steven B. Schnall.***
10.81 Second Amended and Restated Promissory Note, issued by The
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated, on December 23, 2003 and
February 26, 2004, in the principal amount of $2,274,352,
payable to Joseph V. Fierro.***
10.82 Promissory Note, issued by New York Mortgage Funding, LLC on
January 9, 2004 in the principal amount of $100,000,000.00,
payable to Greenwich Capital Financial Products, Inc.***
10.83 Guaranty between the New York Mortgage Company, LLC and
Greenwich Capital Financial Products, Inc., dated as of
January 9, 2004.***
10.84 Master Loan and Security Agreement between New York Mortgage
Funding, LLC and Greenwich Capital Financial Products, Inc.,
dated as of January 9, 2004.***
10.85 Custodial Agreement between New York Mortgage Funding, LLC,
Deutche Bank Trust Company Americas and Greenwich Capital
Financial Products, Inc., dated as of January 9, 2004.
10.86 Amendment Number One, dated November 24, 2003, to the Master
Mortgage Loan Purchase and Interim Servicing Agreement,
dated as of August 1, 2003.***
10.87 Amended and Restated Contribution Agreement, by and among
Steven B. Schnall, Steven B. Schnall Annuity Trust U/A
3/25/04, Joseph V. Fierro, 2004 Joseph V. Fierro Grantor
Retained Annuity Trust and New York Mortgage Trust, Inc.,
dated March 25, 2004.***
10.88 Second Amended and Restated Contribution Agreement, by and
among Steven B. Schnall, Steven B. Schnall Annuity Trust U/A
3/25/04, Joseph V. Fierro, 2004 Joseph V. Fierro Grantor
Retained Annuity Trust and New York Mortgage Trust, Inc.,
dated April 29, 2004.****
10.89 Amended and Restated Agreement by and among New York
Mortgage Trust, Inc., The New York Mortgage Company, LLC,
Steven B. Schnall and Joseph V. Fierro, dated April 29,
2004.****
10.90 Third Amended and Restated Promissory Note, issued by The
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated on December 23, 2003, February
26, 2004 and May 26, 2004, in the principal amount of
$11,432,550 payable to Steven B. Schnall.*****
10.91 Third Amended and Restated Promissory Note, issued by the
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated, on December 23, 2003, February
26, 2004 and May 26, 2004, in the principal amount of
$2,274,352 payable to Joseph V. Fierro. *****
10.92 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Steven B. Schnall.******
10.93 Form of Employment Agreement between New York Mortgage
Trust, Inc. and David A. Akre.******
10.94 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Raymond A. Redlingshafer, Jr.******
10.95 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Michael I. Wirth.******
10.96 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Joseph V. Fierro.******
10.97 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Steven R. Mumma.******
21.01 List of Subsidiaries of the Registrant.**
23.01 Consent of Deloitte & Touche LLP.*****
23.02 Consent of Venable LLP (included in Exhibit 5.01).******
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II-5
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
23.03 Consent of Hunton & Williams LLP (included in Exhibit
8.01).******
24.01 Power of Attorney (included on signature page of the
Registration Statement filed with the Securities and
Exchange Commission on December 31, 2003).
99.01 Consent of David R. Bock to being named as a director.***
99.02 Consent of Alan L. Hainey to being named as a director.***
99.03 Consent of Steven G. Norcutt to being named as a
director.***
99.04 Consent of Mary Dwyer Pembroke to being named as a
director.***
99.05 Consent of Jerome F. Sherman to being named as a
director.***
99.06 Consent of Thomas W. White to being named as a director.***
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* Previously filed as an exhibit to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
** Previously filed as an exhibit to Amendment No. 1 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
*** Previously filed as an exhibit to Amendment No. 2 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
**** Previously filed as an exhibit to Amendment No. 4 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
***** Previously filed as an exhibit to Amendment No. 5 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
****** Filed herewith.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-11 and has duly caused this Amendment No. 6 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York on June 18, 2004.
NEW YORK MORTGAGE TRUST, INC.
(Registrant)
By: /s/ STEVEN B. SCHNALL
------------------------------------
Name: Steven B. Schnall
Title: Co-Chief Executive Officer
|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 6 to the registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ STEVEN B. SCHNALL Chairman of the Board and June 18, 2004
------------------------------ Co-Chief Executive Officer
Steven B. Schnall (Principal Executive Officer)
/s/ DAVID A. AKRE Director and Co-Chief Executive June 18, 2004
------------------------------ Officer
David A. Akre
/s/ MICHAEL I. WIRTH Chief Financial Officer, June 18, 2004
------------------------------ Vice President,
Michael I. Wirth Secretary and Treasurer
(Principal Financial and
Accounting Officer)
/s/ RAYMOND A. REDLINGSHAFER, Director, President and Chief June 18, 2004
JR. Investment Officer
------------------------------
Raymond A. Redlingshafer, Jr.
|
II-7
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
1.01 Form of Underwriting Agreement.******
3.01 Articles of Amendment and Restatement of New York Mortgage
Trust, Inc.******
3.02 Bylaws of New York Mortgage Trust, Inc.******
4.01 Form of Common Stock Certificate.******
5.01 Opinion of Venable LLP.******
8.01 Opinion of Hunton & Williams LLP with respect to certain tax
matters.******
10.01 Promissory Note, issued by The New York Mortgage Company,
LLC on August 31, 2003, as amended and restated, on December
23, 2003, in the principal amount of $2,574,352.00, payable
to Joseph V. Fierro.*
10.02 Promissory Note, issued by The New York Mortgage Company,
LLC on August 31, 2003, as amended and restated, on December
23, 2003, in the principal amount of $12,132,550.00 payable
to Steven B. Schnall.*
10.03 Master Repurchase Agreement between Credit Suisse First
Boston Mortgage Capital LLC, The New York Mortgage Company,
LLC, Steven B. Schnall and Joseph V. Fierro, dated October
2, 2002.*
10.04 Amendment No. 1 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated December 4, 2002.*
10.05 Amendment No. 2 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated February 20, 2003.*
10.06 Amendment No. 3 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated April 22, 2003.*
10.07 Amendment No. 4 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated July 1, 2003.*
10.08 Amendment No. 5 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated July 7, 2003.*
10.09 Amendment No. 6 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated July 31, 2003.*
10.10 Amendment No. 7 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated August 4, 2003.*
10.11 Amendment No. 8 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated August 9, 2003.*
10.12 Amendment No. 9 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated August 28, 2003.*
10.13 Amendment No. 10 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated September 17, 2003.*
10.14 Amendment No. 11 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated October 1, 2003.*
|
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.15 Amendment No. 12 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated October 31, 2003.*
10.16 Amendment No. 13 to Master Repurchase Agreement between
Credit Suisse First Boston Mortgage Capital LLC, The New
York Mortgage Company, LLC, Steven B. Schnall and Joseph V.
Fierro, dated December 19, 2003.*
10.17 Credit Note between HSBC Bank USA and The New York Mortgage
Company LLC, dated as of March 30, 2001.*
10.18 Credit and Security Agreement between HSBC Bank USA and The
New York Mortgage Company LLC, dated as of March 30, 2001.*
10.19 First Amended Credit Note, dated as of May 24, 2001, between
HSBC Bank USA and The New York Mortgage Company LLC, dated
as of March 30, 2001.*
10.20 First Amended Credit and Security Agreement, dated as of May
24, 2001, between HSBC Bank USA and The New York Mortgage
Company LLC, dated as of March 30, 2001.*
10.21 Second Amended Credit Note, dated as of June 18, 2001,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.22 Second Amended Credit and Security Agreement, dated June 18,
2001, between HSBC Bank USA and The New York Mortgage
Company LLC, dated as of March 30, 2001.*
10.23 Third Amended Credit Note, dated as of November 13, 2001,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.24 Third Amended Credit and Security Agreement, dated as of
November 13, 2001, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.*
10.25 Fourth Amended Credit Note, dated as of January 16, 2002,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.26 Fourth Amended Credit and Security Agreement, dated as of
January 16, 2002, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.*
10.27 Fifth Amended Credit Note, dated as of April 29, 2002,
between HSBC Bank USA and The New York Mortgage Company LLC,
dated as of March 30, 2001.*
10.28 Fifth Amended Credit and Security Agreement, dated as of
April 29, 2002, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.*
10.29 Extension Letter, dated August 26, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.30 Extension Letter, dated September 11, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.31 Extension Letter, dated October 28, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.32 Extension Letter, dated November 27, 2002, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.33 Extension Letter, dated April 15, 2003, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.34 Extension Letter, dated June 24, 2003, to Credit and
Security Agreement between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001, as
amended.*
10.35 Guaranty between HSBC Bank USA, The New York Mortgage
Company LLC and Steven Schnall, dated as of March 30,
2001.**
10.36 Guaranty between HSBC Bank USA, The New York Mortgage
Company LLC and Joseph V. Fierro, dated as of March 30,
2001.**
10.37 First Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of May 24,
2001.*
|
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.38 First Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of May
24, 2001.*
10.39 Warehousing Credit Agreement, among The New York Mortgage
Company LLC, Steven B. Schnall, Joseph V. Fierro and
National City Bank of Kentucky, dated January 25, 2002.*
10.40 First Amendment, dated April 2002, to Warehousing Credit
Agreement, among The New York Mortgage Company LLC, Steven
B. Schnall, Joseph V. Fierro and National City Bank of
Kentucky, dated January 25, 2002.*
10.41 Second Amendment, dated June 3, 2002, to Warehousing Credit
Agreement, among The New York Mortgage Company LLC, Steven
B. Schnall, Joseph V. Fierro and National City Bank of
Kentucky, dated January 25, 2002.*
10.42 Third Amendment, dated November , 2002, to Warehousing
Credit Agreement, among The New York Mortgage Company LLC,
Steven B. Schnall, Joseph V. Fierro and National City Bank
of Kentucky, dated January 25, 2002.*
10.43 Fourth Amendment, dated June 15, 2003, to Warehousing Credit
Agreement, among The New York Mortgage Company LLC, Steven
B. Schnall, Joseph V. Fierro and National City Bank of
Kentucky, dated January 25, 2002.*
10.44 Warehouse Promissory Note, between The New York Mortgage
Company, LLC and National City Bank of Kentucky, dated
January 25, 2002.*
10.45 Amended and Restated Warehouse Promissory Note, between The
New York Mortgage Company, LLC and National City Bank of
Kentucky, dated June 3, 2002.*
10.46 Warehousing Credit Agreement, between New York Mortgage
Company, LLC, Steven B. Schnall, Joseph V. Fierro and
National City Bank of Kentucky, dated as of January 25,
2002.*
10.47 Pledge and Security Agreement, between The New York Mortgage
Company, LLC and National City Bank of Kentucky, dated as of
January 25, 2002.*
10.48 Unconditional and Continuing Guaranty of Payment by Steven
B. Schnall to National City Bank of Kentucky, dated January
25, 2002.*
10.49 Unconditional and Continuing Guaranty of Payment by Joseph
V. Fierro to National City Bank of Kentucky, dated January
25, 2002.*
10.50 Amended and Restated Unconditional and Continuing Guaranty
of Payment by Steven B. Schnall to National City Bank of
Kentucky, dated June 15, 2003.*
10.51 Amended and Restated Unconditional and Continuing Guaranty
of Payment by Joseph V. Fierro to National City Bank of
Kentucky, dated June 15, 2003.*
10.52 Inter-Creditor Agreement, between National City Bank of
Kentucky and HSBC Bank USA, dated January 25, 2002.*
10.53 Whole Loan Purchase and Sale Agreement/Mortgage Loan
Purchase and Sale Agreement between The New York Mortgage
Company, LLC and Greenwich Capital Financial Products, Inc.,
dated as of September 1, 2003.*
10.54 Whole Loan Custodial Agreement/Custodial Agreement between
Greenwich Capital Financial Products, Inc., The New York
Mortgage Company, LLC and LaSalle Bank National Association,
dated as of September 1, 2003.*
10.55 Form of New York Mortgage Trust, Inc. 2004 Stock Incentive
Plan.***
10.56 Contribution Agreement by and among Steven B. Schnall and
Joseph V. Fierro and New York Mortgage Trust, Inc., dated
December 22, 2003.**
10.57 Agreement by and among New York Mortgage Trust, Inc., The
New York Mortgage Company, LLC, Steven B. Schnall and Joseph
V. Fierro, dated December 23, 2003.**
10.58 Sixth Amended Credit and Security Agreement, dated as of
August 11, 2003, between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of March 30, 2001.**
10.59 Temporary Overadvance Note, dated as of August 11, 2003,
between HSBC Bank USA and The New York Mortgage Company
LLC.**
10.60 Second Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of June
18, 2001.**
|
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.61 Second Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of June
18, 2001.**
10.62 Third Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of
November 13, 2001.**
10.63 Third Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of
November 13, 2001.**
10.64 Fourth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of January
16, 2002.**
10.65 Fourth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of
January 16, 2002.**
10.66 Fifth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of April
29, 2002.**
10.67 Fifth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of April
29, 2002.**
10.68 Sixth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Steven Schnall, dated as of August
11, 2003.**
10.69 Sixth Amended Guaranty between HSBC Bank USA, The New York
Mortgage Company LLC and Joseph V. Fierro, dated as of
August 11, 2003.**
10.70 Credit and Security Agreement by and among HSBC Bank USA,
National City Bank of Kentucky and The New York Mortgage
Company LLC, dated as of December 15, 2003.**
10.71 Guaranty between HSBC Bank USA, National City Bank of
Kentucky, The New York Mortgage Company LLC and Steven B.
Schnall, dated as of December 15, 2003.**
10.72 Guaranty between HSBC Bank USA, National City Bank of
Kentucky, The New York Mortgage Company LLC and Joseph V.
Fierro, dated as of December 15, 2003.**
10.73 Credit Note by and between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of December 15, 2003.**
10.74 Credit Note by and between National City Bank of Kentucky
and The New York Mortgage Company LLC, dated as of December
15, 2003.**
10.75 Swingline Note by and between HSBC Bank USA and The New York
Mortgage Company LLC, dated as of December 15, 2003.**
10.76 Custodial Agreement by and among Greenwich Capital Financial
Products, Inc., The New York Mortgage Corporation LLC and
Deutsche Bank Trust Company Americas, dated as of August 1,
2003.**
10.77 Master Mortgage Loan Purchase and Interim Servicing
Agreement by and between The New York Mortgage Company
L.L.C. and Greenwich Capital Financial Products, Inc., dated
as of August 1, 2003.**
10.78 Subordination and Pledge Agreement by and between HSBC Bank
USA and Steven B. Schnall, dated as of December 15, 2003.**
10.79 Subordination and Pledge Agreement by and between HSBC Bank
USA and Joseph V. Fierro, dated as of December 15, 2003.**
10.80 Second Amended and Restated Promissory Note, issued by The
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated, on December 23, 2003 and
February 26, 2004, in the principal amount of $11,432,550
payable to Steven B. Schnall.***
10.81 Second Amended and Restated Promissory Note, issued by The
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated, on December 23, 2003 and
February 26, 2004, in the principal amount of $2,274,352,
payable to Joseph V. Fierro.***
10.82 Promissory Note, issued by New York Mortgage Funding, LLC on
January 9, 2004 in the principal amount of $100,000,000.00,
payable to Greenwich Capital Financial Products, Inc.***
10.83 Guaranty between the New York Mortgage Company, LLC and
Greenwich Capital Financial Products, Inc., dated as of
January 9, 2004.***
|
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
10.84 Master Loan and Security Agreement between New York Mortgage
Funding, LLC and Greenwich Capital Financial Products, Inc.,
dated as of January 9, 2004.***
10.85 Custodial Agreement between New York Mortgage Funding, LLC,
Deutche Bank Trust Company Americas and Greenwich Capital
Financial Products, Inc., dated as of January 9, 2004.***
10.86 Amendment Number One, dated November 24, 2003, to the Master
Mortgage Loan Purchase and Interim Servicing Agreement,
dated as of August 1, 2003.***
10.87 Amended and Restated Contribution Agreement, by and among
Steven B. Schnall, Steven B. Schnall Annuity Trust U/A
3/25/04, Joseph V. Fierro, 2004 Joseph V. Fierro Grantor
Retained Annuity Trust and New York Mortgage Trust, Inc.,
dated March 25, 2004.***
10.88 Second Amended and Restated Contribution Agreement, by and
among Steven B. Schnall, Steven B. Schnall Annuity Trust U/A
3/25/04, Joseph V. Fierro, 2004 Joseph V. Fierro Grantor
Retained Annuity Trust and New York Mortgage Trust, Inc.,
dated April 29, 2004.****
10.89 Amended and Restated Agreement by and among New York
Mortgage Trust, Inc., The New York Mortgage Company, LLC,
Steven B. Schnall and Joseph V. Fierro, dated April 29,
2004.****
10.90 Third Amended and Restated Promissory Note, issued by The
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated on December 23, 2003, February
26, 2004 and May 26, 2004, in the principal amount of
$11,432,550 payable to Steven B. Schnall.*****
10.91 Third Amended and Restated Promissory Note, issued by the
New York Mortgage Company, LLC on August 31, 2003, as
further amended and restated, on December 23, 2003, February
26, 2004 and May 26, 2004, in the principal amount of
$2,274,352 payable to Joseph V. Fierro. *****
10.92 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Steven B. Schnall.******
10.93 Form of Employment Agreement between New York Mortgage
Trust, Inc. and David A. Akre.******
10.94 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Raymond A. Redlingshafer, Jr.******
10.95 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Michael I. Wirth.******
10.96 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Joseph V. Fierro.******
10.97 Form of Employment Agreement between New York Mortgage
Trust, Inc. and Steven R. Mumma.******
21.01 List of Subsidiaries of the Registrant.**
23.01 Consent of Deloitte & Touche LLP.*****
23.02 Consent of Venable LLP (included in Exhibit 5.01).******
23.03 Consent of Hunton & Williams LLP (included in Exhibit
8.01).******
24.01 Power of Attorney (included on signature page of the
Registration Statement filed with the Securities and
Exchange Commission on December 31, 2003).
99.01 Consent of David R. Bock to being named as a director.***
99.02 Consent of Alan L. Hainey to being named as a director.***
99.03 Consent of Steven G. Norcutt to being named as a
director.***
99.04 Consent of Mary Dwyer Pembroke to being named as a
director.***
99.05 Consent of Jerome F. Sherman to being named as a
director.***
99.06 Consent of Thomas W. White to being named as a director.***
|
* Previously filed as an exhibit to the Company's Registration Statement on Form S-11 Registration No. 333-111668, and incorporated by reference herein.
** Previously filed as an exhibit to Amendment No. 1 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
*** Previously filed as an exhibit to Amendment No. 2 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
**** Previously filed as an exhibit to Amendment No. 4 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
***** Previously filed as an exhibit to Amendment No. 5 to the Company's Registration Statement on Form S-11, Registration No. 333-111668, and incorporated by reference herein.
****** Filed herewith.
Exhibit 1.01
NEW YORK MORTGAGE TRUST, INC.
SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
________________, 2004
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
as Representative of the several Underwriters
1001 19th Street North
Arlington, Virginia 22209
Dear Sirs:
Each of New York Mortgage Trust, Inc. a Maryland corporation (the
"Company") and The New York Mortgage Company, LLC, a Delaware limited liability
company ("NYMC"), and, with respect only to Sections 3 and 4(b) hereof, Steven
B. Schnall ("Schnall") and Joseph V. Fierro ("Fierro" and, together with
Schnall, the "Founding Members") confirms its agreement with each of the
Underwriters listed on Schedule I hereto (collectively, the "Underwriters"), for
whom Friedman, Billings, Ramsey & Co., Inc. is acting as representative (in such
capacity, the "Representative"), with respect to (i) the sale by the Company of
_____________ shares (the "Initial Shares") of common stock, par value $0.01 per
share, of the Company ("Common Stock"), and the purchase by the Underwriters,
acting severally and not jointly, of the respective number of shares of Common
Stock set forth opposite the names of the Underwriters in Schedule I hereto and
(ii) the grant of the option described in Section 1(b) hereof to purchase all or
any part of ____________ additional shares of Common Stock (the "Option Shares")
to cover over-allotments, if any, from the Company, to the Underwriters, acting
severally and not jointly, in the respective numbers of shares of Common Stock
set forth opposite the names of the Underwriters in Schedule I hereto. The
__________ shares of Common Stock to be purchased by the Underwriters described
in Section 1(a) and all or any part of the ___________ shares of Common Stock
subject to the option described in Section l(b) hereof are hereinafter called,
collectively, the "Shares."
The Company has filed with the Securities and Exchange Commission (the Commission"), a registration statement on Form S-11 (No. 333-111668) for the registration of the Shares under the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations thereunder (the "Securities Act Regulations") which contains a form of prospectus to be used in connection with the public offering and sale of Shares. The Company has prepared and filed such amendments thereto, if any, and such amended preliminary prospectuses, if any, as may have been required to the date hereof, and will file such additional amendments thereto and such amended prospectuses as may hereafter be required under the Securities Act and Securities Act Regulations. The registration statement has been declared effective under the Securities Act by the Commission. The registration statement as amended at the time it became effective (including all information deemed (whether by incorporation by reference or otherwise) to be a part of the registration statement at the time it became effective pursuant to Rule 430A(b) of the Securities Act Regulations) is hereinafter called the "Registration Statement," except that, if the
Company files a post-effective amendment to such registration statement which becomes effective prior to the Closing Time (as defined below), "Registration Statement" shall refer to such registration statement as so amended. Any registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter called the "Rule 462(b) Registration Statement," and after such filing the term "Registration Statement" shall include the 462(b) Registration Statement. Each prospectus included in the Registration Statement, including amendments thereof or supplements thereto, before the Registration Statement became effective under the Securities Act which was filed with the Commission by the Company with the consent of the Underwriters pursuant to Rule 424(a) of the Securities Act Regulations and distributed to prospective investors in connection with the offering of the Shares is hereinafter called the "Preliminary Prospectus." The term "`Prospectus" means the final prospectus, as first filed with the Commission pursuant to Rule 424(b) of the Securities Act Regulations, and any amendments thereof or supplements thereto. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations and other terms and conditions herein set forth, at the purchase price per share of $________, the Company agrees to sell to the Underwriters the number of Initial Shares set forth in Schedule I opposite their names, and each Underwriter agrees, severally and not jointly, to purchase from the Company the number of Initial Shares set forth in Schedule I opposite such Underwriter's name, plus any additional number of Initial Shares which such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof, subject in each case, to such adjustments among the Underwriters as the Representative in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and representations and other terms and conditions herein set forth, the Company hereby grants an option to the Underwriters, acting severally and not jointly, to purchase from the Company, all or any part of the Option Shares at the purchase price per share set forth in paragraph (a), plus any additional number of Option Shares which such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time (but in no event in more than two installments) only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial Shares upon written notice by the Representative to the Company setting forth the number of Option Shares as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Shares. Any such time and date of delivery (a "Date of Delivery") shall be determined by the Representative, but shall not be later than three full business days (or earlier, without the consent of the Company, than two full business days) after the exercise of such option, nor in any event prior to the Closing Time, as hereinafter defined.
If the option is exercised as to all or any portion of the Option Shares, the Company will sell such Option Shares to the Underwriters, and each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Shares then being purchased which the number of Initial Shares set forth in Schedule I opposite the name of such Underwriter bears to the total number of Initial Shares, subject in each case to such adjustments among the Underwriters as the Representative in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
2. Payment and Delivery
(a) Initial Shares. The Shares to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as the Representative may request upon at least forty-eight hours' prior written notice to the Company, shall be delivered by or on behalf of the Company to the Representative, including, at the option of the Representative, through the facilities of The Depository Trust Company ("DTC") for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified to the Representative by the Company upon at least forty-eight hours' prior written notice. To the extent the Representative requests that the Initial Shares be delivered in certificated form and not in book-entry form through the facilities of DTC, the Company will cause the certificates representing the Initial Shares to be made available for checking and packaging at least twenty-four hours prior to the Closing Time (as defined below) with respect thereto at the office of the Representative, 1001 19th Street North, Arlington, Virginia 22209, or at the office of DTC or its designated custodian, as the case may be (the "Designated Office"). The time and date of delivery of and payment for the Initial Shares shall be 9:30 a.m., New York City time, on the third (fourth, if pricing occurs after 4:30 p.m., New York City time) business day after the date hereof (unless another time and date shall be agreed to by the Representative and the Company). The time at which such payment and delivery are actually made is hereinafter sometimes called the "Closing Time" and the date of delivery of both Initial Shares and Option Shares is hereinafter sometimes called the "Date of Delivery." Delivery of and payment for the Initial Shares shall occur at the Richmond, Virginia offices of Hunton & Williams LLP.
(b) Option Shares. Any Option Shares to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as the Representative may request upon at least forty-eight hours' prior written notice to the Company shall be delivered by or on behalf of the Company to the Representative, including, at the option of the Representative, through the facilities of DTC for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified to the Representative by the Company upon at least forty-eight hours' prior written notice. To the extent the Representative requests that the Option Shares be delivered in certificated form and not in book-entry form through the facilities of DTC, the Company will cause the certificates representing the Option Shares to be made available for checking and packaging at least twenty-four hours prior to the Date of
Delivery with respect thereto at the Designated Office. The time and date of delivery of and payment for such Option Shares shall be 9:30 a.m., New York City time, on the date specified by the Representative in the notice given by the Representative to the Company of the Underwriters' election to purchase such Option Shares or on such other time and date as the Company and the Representative may agree upon in writing. Delivery of and payment for the Option Shares shall occur at the Richmond, Virginia offices of Hunton & Williams LLP.
(c) Directed Shares. It is understood that approximately __________ shares of the Initial Shares ("Directed Shares") initially will be reserved by the Underwriters for offer and sale to officers, employees, directors and related persons ("Directed Share Participants") upon the terms and conditions set forth in the Prospectus and in accordance with the rules and regulations of the National Association of Securities Dealers, Inc. (the "NASD" and such program for such offer and sale, the "Directed Share Program"). Under no circumstances will the Representative or any Underwriter be liable to the Company or to any Directed Share Participant for any action taken or omitted to be taken in good faith in connection with such Directed Share Program. To the extent that any Directed Shares are not affirmatively reconfirmed for purchase by any Directed Share Participant on or immediately after the date of this Agreement, such Directed Shares may be offered to the public as part of the public offering contemplated herein.
3. Representations and Warranties of the Company:
The Company, NYMC and each of the Founding Members, jointly and severally, represent and warrant to the Underwriters that:
(a) The outstanding shares of capital stock or membership interests, as applicable, of the Company, NYMC and New York Mortgage Funding, LLC, a Delaware limited liability company ("NYMF") have been duly and validly authorized and issued and are fully paid and non-assessable, and all of the outstanding membership interests of NYMF are and, following payment of the consideration for the Company's acquisition of NYMC described in the Prospectus, all of the outstanding membership interests of NYMC will be, directly or indirectly owned of record and beneficially by the Company free and clear of any security interest, mortgage, pledge, lien, claim, restriction or encumbrance; except as disclosed in the Prospectus, there are no outstanding (i) securities or obligations of the Company, NYMC or NYMF convertible into or exchangeable for any capital stock or membership interests of the Company, NYMC or NYMF, (ii) warrants, rights or options to subscribe for or purchase from the Company, NYMC or NYMF any such capital stock or membership interests or any such convertible or exchangeable securities or obligations, or (iii) obligations of the Company, NYMC or NYMF to issue any shares of capital stock or membership interests, any such convertible or exchangeable securities or obligation, or any such warrants, rights or options; except as disclosed in the prospectus and named in Exhibit 21 to the Registration Statement, neither the Company, nor NYMC nor NYMF has any subsidiaries or owns, directly or indirectly, any capital stock or other equity securities of any other corporation or any ownership interest in any partnership, joint venture or other entity.
(b) The authorized capital stock, and the number of issued and outstanding shares of Common Stock, of the Company, on an actual basis, on a pro forma basis after giving effect to the NYMC acquisition, and on a pro forma as adjusted basis after giving effect to the NYMC acquisition and the offering, are as set forth in the Prospectus. The Common Stock (including the Shares) conforms in all material respects to the description thereof contained in the Prospectus. None of the outstanding shares of capital stock or membership interests, as applicable, of the Company, NYMC or NYMF were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company, NYMC or NYMF. The descriptions of the Company's 2004 Incentive Plan, and of the options or other awards granted thereunder, set forth in the Prospectus fairly and accurately present the information required to be shown with respect to such plan, options or other awards. Except as described in the Prospectus, the Company has not sold or issued any shares of Common Stock nor have NYMC or NYMF sold or issued any membership interests during the six-month period preceding the date of the Prospectus.
(c) Each of the Company, NYMC and NYMF has been duly incorporated or formed and is validly existing as a corporation or limited liability company, as applicable, in good standing under the laws of its respective jurisdiction of incorporation or formation with full corporate power and authority to own its respective properties and to conduct its respective businesses as described in the Prospectus; each of the Company and NYMC has full corporate or limited liability company, as applicable, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated herein and the Company has full corporate power and authority to execute and deliver the Contribution Agreement and to consummate the transactions contemplated therein;
(d) Each of the Company, NYMC and NYMF is duly qualified and is in good standing as a foreign corporation or limited liability company, as the case may be, in each jurisdiction in which it is required to be so qualified, except where the failure to be so qualified would not reasonably be likely, individually or in the aggregate, to have a material adverse effect on the assets, business, operations, earnings, prospects, properties or condition (financial or otherwise), of the Company and its subsidiaries taken as a whole, (any such effect or change, where the context so requires, is hereinafter called a "Material Adverse Effect" or "Material Adverse Change"); except as disclosed in the Prospectus, NYMF is not and NYMC will not, following the consummation of the transactions contemplated by the Contribution Agreement, be prohibited or restricted, directly or indirectly, from making distributions to the Company with respect to such entity's membership interests, or from repaying to the Company any amounts which may from time to time become due under any loans or advances to such entity from the Company or from transferring any of NYMF's or NYMC's property or assets to the Company;
(e) Each of the Company, NYMC and NYMF is in compliance in all material respects with all laws, rules, regulations, orders, decrees and judgments applicable to it,
including those relating to transactions with affiliates, and has not received any notice of any material actual or proposed changes in existing federal, state, local or foreign laws, rules or regulations or any orders, decrees or judgments applicable to it;
(f) Neither the Company, nor NYMC nor NYMF is in breach of or in default under (nor has any event occurred which with notice, lapse of time, or both, would constitute a breach of, or default under), its respective organizational documents, or in the performance or observance of any material obligation, agreement, covenant or condition contained in any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which the Company, NYMC or NYMF is a party or by which any of them or their respective properties or assets may be bound or affected;
(g) The execution, delivery and performance of this Agreement, and
consummation by the Company and NYMC of the transactions contemplated
herein, do not and will not (A) conflict with, or result in any breach of,
or constitute a default under (nor constitute any event which with notice,
lapse of time, or both, would constitute a breach of, or default under),
(i) any provision of the organizational documents of the Company, NYMC or
NYMF, or (ii) any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which
the Company, NYMC or NYMF is a party or by which any of them or their
respective properties or assets may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company, NYMC or NYMF; or (B) result
in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company, NYMC or NYMF;
(h) This Agreement has been duly authorized, executed and delivered by the Company and NYMC and constitutes the legal, valid and binding agreement of the Company and NYMC enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally, and by general equitable principles, and except to the extent that the indemnification and contribution provisions of Section 9 hereof may be limited by federal or state securities laws and public policy considerations in respect thereof;
(i) no approval, authorization, consent or order of or registration or filing with any federal, state or local court, governmental or regulatory commission, board, body, authority or agency is required in connection with the Company's or NYMC's execution, delivery and performance of this Agreement or the Company's execution, delivery and performance of the Contribution Agreement, the consummation of the transactions contemplated herein or therein, or the sale and delivery of the Shares, other than (A) such as have been obtained, or will have been obtained at the Closing Time or the relevant Date of Delivery, as the case may be, under the Securities Act and the Securities Exchange Act of 1934 (the "Exchange Act"), (B) such approvals as have been obtained in connection with the approval of the listing of the Shares on the New York Stock Exchange and (C) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered by the Underwriters;
(j) Each of the Company, NYMC and NYMF has obtained all material licenses, authorizations, consents, accreditations, certifications and approvals and has made all material filings required under any federal, state or local law, regulation or rule, which authorizations, consents, accreditations, certifications, approvals and filings are required in order to conduct its business as currently conducted or as proposed to be conducted as described in the Prospectus; neither the Company, nor NYMC, nor NYMF is in violation of, in default under, or has received any notice regarding a possible violation, default or revocation of, or proceeding relating to, any such material license, authorization, consent, accreditation, certification or approval applicable to the Company, NYMC or NYMF; and no such license, authorization, consent, accreditation, certification or approval contains a materially burdensome restriction that is not adequately disclosed in the Prospectus;
(k) Each of the Registration Statement and any Rule 462(b) Registration Statement has been declared effective by the SEC under the Securities Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are threatened by the Commission, and, to the knowledge of the Company, the Company has complied to the Commission's satisfaction with all requests on the part of the Commission for additional information;
(l) Each Preliminary Prospectus, the Prospectus and all amendments or supplements thereto, complied when filed, and comply as of the date hereof, with the requirements of the Securities Act and the Securities Act Regulations in all material respects; each of the Registration Statement (including any Rule 462(b) Registration Statement) and any post-effective amendment thereto, complied at the time it became effective and complies as of the date hereof with the requirements of the Securities Act and the Securities Act regulations in all material respects; the Registration Statement did not, and any amendment thereto will not, in each case as of the applicable effective date, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Prospectus or any amendment or supplement thereto did not, as of the applicable filing date and will not, at the Closing Time and on each Date of Delivery, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in the Registration Statement or the Prospectus in reliance upon and in conformity with the information concerning the Underwriters and furnished in writing by or on behalf of the Underwriters through the Representative to the Company expressly for use in the Registration Statement or the Prospectus (that information being limited to that described in the penultimate sentence of the first paragraph of Section 9(b) hereof);
(m) The Prospectus will be identical to the version of the Prospectus created to be transmitted to the Commission for filing via the Electronic Data Gathering Analysis and Retrieval System ("EDGAR"), except to the extent permitted by Regulation S-T;
(n) There are no material actions, suits, proceedings, inquiries or investigations pending or, to the knowledge of the Company or NYMC, threatened against or affecting the Company, NYMC or NYMF or any of their respective officers and directors or to which the properties, assets or rights of any such entity are subject, at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority, arbitral panel or agency;
(o) The financial statements, including the notes thereto, included in the Registration Statement and the Prospectus present fairly and accurately in all material respects the consolidated financial position of the entities to which such financial statements relate (the "Covered Entities") as of the dates indicated and the consolidated results of operations and changes in financial position and cash flows of the Covered Entities for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles as applied in the United States and on a consistent basis throughout the periods involved and in accordance with Regulation S-X promulgated by the Commission; the financial statement schedules included in the Registration Statement and the amounts in the Prospectus under the captions "Summary - Selected Historical and Pro Forma Financial Data of Our Company and NYMC", "Capitalization" and "Selected Historical and Pro Forma Financial Data of Our Company and NYMC" present the information purported to be shown therein fairly and accurately in all material respects and have been compiled on a basis consistent with the financial statements included in the Registration Statement and the Prospectus; no other financial statements or supporting schedules are required to be included in the Registration Statement; the amounts in the Prospectus under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" are accurately computed, fairly present the information purported to be shown therein and have been determined on a basis consistent with the financial statements included in the Registration Statement and the Prospectus; the unaudited pro forma financial information (including the related notes) included in the Prospectus present fairly and accurately in all material respects the information purported to be contained therein, complies in all material respects with the applicable accounting requirements of the Securities Act and the Securities Act Regulations, and management of the Company believes that the assumptions underlying the pro forma adjustments are reasonable and that the adjustments applied therein are appropriate to give effect to the transactions and circumstances referred to therein; such pro forma adjustments have been properly applied to the historical amounts in the compilation of the information and such information fairly presents with respect to the Company, NYMC and NYMF, the financial position, results of operations and other information purported to be shown therein at the respective dates and for the respective periods specified; no other financial statements or pro forma financial information is required under applicable law or the rules and regulations of the SEC to be included in the Registration Statement or the Prospectus;
(p) Deloitte & Touche LLP, whose reports on the consolidated financial statements of the Company, NYMC and NYMF are filed with the Commission as part of the Registration Statement and Prospectus are, and were during the periods covered by their reports, independent public accountants with respect to each of the Company, NYMC and NYMF as required by the Securities Act, the Securities Act Regulations and the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations of the Commission thereunder (together, the "Sarbanes-Oxley Act");
(q) Subsequent to the respective dates as of which information is given in the most recent Preliminary Prospectus, and except as may be otherwise stated in such Preliminary Prospectus, there has not been (A) any Material Adverse Change or any event or development including, but not limited to any loss or damage (whether or not insured) to the property of the Company, NYMC or NYMF, that could reasonably be expected to have a Material Adverse Effect, whether or not arising in the ordinary course of business, (B) any transaction that is material to the Company, NYMC and NYMF taken as a whole, entered into by the Company, NYMC or NYMF, (C) any liability or obligation, contingent or otherwise, directly or indirectly incurred by the Company, NYMC or NYMF that is material to the Company and its subsidiaries taken as a whole, (D) any dividend or distribution of any kind declared, paid or made by the Company or NYMC on any class of its capital stock or membership interests or any repurchase or redemption by the Company or NYMC of any class of capital stock or other equity interests, or (E) any change in the capital stock or membership interests, as applicable, or long-term debt or short-term borrowings of the Company, NYMC or NYMF;
(r) There are no persons with registration or other similar rights to have any equity or debt securities, including securities which are convertible into or exchangeable for equity securities, registered pursuant to the Registration Statement or otherwise registered by the Company, NYMC or NYMF under the Securities Act;
(s) The Shares have been duly authorized and, when issued and duly delivered against payment therefor as contemplated by this Agreement, will be validly issued, fully paid and non-assessable, free and clear of any security interest, mortgage, pledge, lien, claim, restriction or encumbrance, and the issuance and sale of the Shares by the Company is not subject to preemptive or other similar rights arising by operation of law, under the organizational documents of the Company or under any agreement to which the Company, NYMC or NYMF is a party or otherwise;
(t) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and the Shares have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance;
(u) The Company has not taken, and will not take, directly or indirectly, any action which is designed to or which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares;
(v) Neither the Company nor any of its affiliates (i) is required to register as a "broker" or "dealer" in accordance with the provisions of the Exchange Act, or the rules and regulations thereunder (the "Exchange Act Regulations"), or (ii) directly, or indirectly through one or more intermediaries, controls or has any other association with (within the meaning of Article I of the By-laws of the NASD) any member firm of the NASD;
(w) The Company has not relied upon the Representative or legal counsel for the Representative for any legal, tax or accounting advice in connection with the offering and sale of the Shares, other than with respect to applicable state securities or "blue sky" laws and foreign securities laws;
(x) Any certificate signed by any officer of the Company, NYMC or NYMF delivered to the Representative or to counsel for the Underwriters pursuant to or in connection with this Agreement shall be deemed a representation and warranty by the Company, NYMC and each of the Founding Members jointly and severally, to each Underwriter as to the matters covered thereby;
(y) The form of certificate used to evidence the Common Stock, as filed with the Commission as Exhibit 4.1 to the Registration Statement, complies in all material respects with all applicable statutory requirements, with any applicable requirements of the organizational documents of the Company and the requirements of the New York Stock Exchange;
(z) Neither the Company, nor NYMC nor NYMF owns or has previously owned any real property other than real property owned by NYMC as a result of foreclosures in the ordinary course of business; each of the Company, NYMC and NYMF have good title to all personal property owned by them, in each case free and clear of all liens, security interests, pledges, charges, encumbrances, mortgages and defects, except such as are disclosed in the Prospectus or such as do not materially and adversely affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company, NYMC or NYMF, as the case may be; and any real property and buildings held under lease by the Company, NYMC or NYMF are held under valid, existing and enforceable leases, with such exceptions as are disclosed in the Prospectus or are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Company, NYMC or NYMF;
(aa) The descriptions in the Registration Statement and the Prospectus of legal or governmental proceedings, contracts, agreements and other legal documents present fairly in all material respects the information required to be shown therein, and there are no legal or governmental proceedings, contracts, agreements, or other documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required; all agreements between the Company, NYMC or NYMF and third parties expressly referenced in the Prospectus are legal, valid and binding obligations of the Company, NYMC or NYMF, enforceable in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally and by general equitable principles; to the knowledge of the Company, NYMC and NYMF, no other party to any such agreement is in material breach or default thereof or thereunder;
(bb) Each of the Company, NYMC and NYMF owns or possesses adequate licenses or other rights to use all material patents, trademarks, service marks, trade names, copyrights, software and design licenses, trade secrets, other intangible property rights and know-how (collectively "Intangibles") necessary to entitle it to conduct its business as described in the Prospectus, and neither the Company, nor NYMC nor NYMF has received notice of infringement of or conflict with (and neither the Company, nor NYMC, nor any Founding Member knows of any such infringement of or conflict with) asserted rights of others with respect to any such Intangibles;
(cc) The Company, NYMC and NYMF have implemented controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and is accumulated and communicated to the Company's management, including its chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure; the Company makes and keeps books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, NYMC and NYMF; and the Company, NYMC and NYMF maintain a system of internal accounting controls and procedures sufficient to provide reasonable assurance that (i) transactions involving the Company, NYMC or NYMF are executed in accordance with management's general or specific authorizations; (ii) transactions involving the Company, NYMC or NYMF are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences;
(dd) Each of the Company, NYMC and NYMF has filed on a timely basis all necessary federal, state, local and foreign income and franchise tax returns required to be filed by it through the date hereof and has paid all taxes shown as due thereon and any related assessments, fines or penalties; no material tax deficiency has been asserted against any such entity nor any Founding Member with respect to the Company, NYMC or NYMF, nor does any such entity or any Founding Member know of any such material tax deficiency which is likely to be asserted against any such entity or any Founding Member; all tax liabilities are adequately provided for in the financial statements contained in the Prospectus;
(ee) Each of the Company, NYMC and NYMF maintains insurance (issued by insurers of recognized financial responsibility) of the types and in the amounts generally
deemed adequate for their respective businesses and consistent with insurance coverage maintained by similar companies in similar businesses, including, but not limited to, insurance covering real and personal property owned or leased by the Company, NYMC and NYMF against theft, damage, destruction, acts of vandalism and all other risks customarily insured against, all of which insurance is in full force and effect;
(ff) Neither the Company, NYMC nor NYMF is in violation in any material respect, or has received notice of any material violation with respect to, any applicable environmental, safety or similar law applicable to the business of the Company, NYMC or NYMF; neither the Company nor NYMC, nor NYMF nor any Founding Member has received any notice of, or has any knowledge of any occurrence or circumstance which, with notice or passage of time, or both, would give rise to a material claim against the Company, NYMC or NYMF under or pursuant to any Environmental Law with respect to any properties currently or previously owned, leased or operated by the Company, NYMC or NYMF or the assets of the Company, NYMC or NYMF or arising out of the conduct of the business of the Company, NYMC or NYMF; the Company, NYMC and NYMF have received all material permits, licenses or other approvals required of them under applicable federal and state occupational safety and health and environmental laws and regulations to conduct their respective businesses, and each of the Company, NYMC and NYMF is in compliance in all material respects with all terms and conditions of any such permit, license or approval applicable to it; for purposes of this Agreement, the term "Environmental Law" shall mean any federal, state or local environmental law, statute, ordinance, rule or regulation, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections 5101-5127, the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901-6992k, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections 7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C. Sections 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. Sections 651-678, and any analogous state laws, as any of the above may be amended from time to time and the regulations promulgated pursuant to each of the foregoing.
(gg) Neither the Company, nor NYMC nor NYMF is in violation in any material respect of any federal or state law relating to discrimination in the hiring, promotion or pay of employees, nor any applicable federal or state wages and hours law, nor any state law precluding the denial of credit due to the neighborhood in which a property is situated, and neither the Company nor NYMC nor NYMF has received notice of any such violation;
(hh) The Company, NYMC and NYMF and each "employee benefit plan" as defined under the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA") established
or maintained by the Company, NYMC or NYMF or their ERISA Affiliates (as defined below) are in compliance in all material respects with all presently applicable provisions of ERISA; no "reportable event" (as defined in ERISA) has occurred or is reasonably expected to occur with respect to any such employee benefit plan; neither the Company nor NYMC nor NYMF has incurred or expects to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "employee benefit plan" or (ii) Section 412, 4971, 4975 or 4980(B) of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder ("Code"); each "employee benefit plan" established or maintained by the Company, NYMC or NYMF or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, which would reasonably be expected to cause the loss of such qualification; and no "employee benefit plan" established or maintained by the Company, NYMC or NYMF or any of their ERISA Affiliates, if such "employee benefit plan" were terminated, would have any material "amount of unfunded benefit liabilities" (as defined under ERISA); for purposes of this Agreement, the term "ERISA Affiliate" means, with respect to the Company, NYMC or NYMF, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Code of which the Company, NYMC or NYMF is a member;
(ii) Neither the Company, nor NYMC, nor NYMF, nor any officer,
director, manager, employee or agent purporting to act on behalf of the
Company, NYMC or NYMF has at any time (i) made any contributions or other
payment to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law or of a character required to
be disclosed in the Prospectus which is not so disclosed, (ii) made any
payment to any state, federal, local or foreign governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law, (iii)
made any payment outside the ordinary course of business to any investment
officer or loan broker or person charged with similar duties of any entity
to which the Company, NYMC or NYMF sells or from which the Company, NYMC
or NYMF buys loans or servicing arrangements for the purpose of
influencing such agent, officer, broker or person to buy loans or
servicing arrangements from or sell loans to the Company, NYMC or NYMF, or
(iv) engaged in any transactions, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which
have been and are reflected in the normally maintained books and records
of the Company, NYMC and NYMF; the Company has not offered, or caused the
Representative to offer, Shares to any person pursuant to the Directed
Share Program (as defined above) with the specific intent to unlawfully
influence (i) a customer or supplier of the Company, NYMC or NYMF to alter
the customer's or supplier's level or type of business with the Company,
NYMC or NYMF or (ii) a trade journalist or publication to write or publish
favorable information about the Company, NYMC or NYMF;
(jj) Except as disclosed in the Prospectus, there are no outstanding loans or advances or guarantees of indebtedness by the Company, NYMC or NYMF to or for the
benefit of any of the officers, directors or managers of the Company, NYMC or NYMF or any of the members of the families of any of them;
(kk) Neither the Company, nor NYMC, nor NYMF, nor to the knowledge of the Company, NYMC or any Founding Member, any employee or agent of the Company, NYMC or NYMF, has made any payment of funds of the Company, NYMC or NYMF or received or retained any funds in violation of any law, rule or regulation or of a character required to be disclosed in the Prospectus and not so disclosed;
(ll) All securities issued by the Company, NYMC and NYMF have been issued and sold in compliance with all applicable federal and state securities laws.
(mm) In connection with this offering, the Company has not offered and will not offer its Common Stock or any other securities convertible into or exchangeable or exercisable for Common Stock in a manner in violation of the Securities Act. The Company has not distributed and will not distribute any offering material in connection with the offer and sale of the Shares, other than a Preliminary Prospectus, the Prospectus or the Registration Statement;
(nn) Each of the Company, NYMC and NYMF has complied and will comply with all the provisions of Florida Statutes, Section 517.075 (Chapter 92-198, Laws of Florida) and the rules and regulations thereunder; and neither the Company, nor NYMC, nor NYMF, nor any of their respective affiliates, does business with the government of Cuba or with any person or affiliate located in Cuba;
(oo) Neither the Company, nor NYMC nor NYMF has incurred any liability for any finder's fees or similar payments in connection with the transactions herein contemplated;
(pp) No relationship, direct or indirect, exists between or among the Company, NYMC or NYMF on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company, NYMC or NYMF on the other hand, which is required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement or the Prospectus and which is not so described;
(qq) Each of the director nominees of the Company which is designated as an "Independent Director" in Prospectus satisfies the requirements for independence under the Sarbanes-Oxley Act and the rules of the New York Stock Exchange.
(rr) Neither the Company, nor NYMC, nor NYMF is, or after giving effect to the offering and sale of the Shares and the receipt of proceeds therefrom will be, an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); the Company will continue to conduct its business in a manner such that it will not be subject to registration as an "investment company" under the Investment Company Act;
(ss) The Company has retained Deloitte & Touche LLP as its qualified independent accountants;
(tt) There are no existing or, to the knowledge of the Company, NYMC or any Founding Member, threatened labor disputes with the employees of the Company, NYMC or NYMF;
(uu) The execution and delivery of that certain Second Amended and
Restated Contribution Agreement, dated as of April 29, 2004, by and among
the Company, Schnall, Steven B. Schnall Annuity Trust U/A 3/25/04, Fierro
and 2004 Joseph V. Fierro Grantor Retained Annuity Trust with respect to
the Company's acquisition of NYMC (the "Contribution Agreement") and each
of the documents, agreements and instruments executed and delivered in
connection therewith, and the consummation of the transactions
contemplated by the foregoing, have been duly authorized by all necessary
corporate or, as applicable, limited liability company action, including,
but not limited to, any vote of the stockholders of the Company or the
members of NYMC that may be required by applicable state law; the
Contribution Agreement is a legal, valid and binding agreement of the
Company and the other parties thereto enforceable in accordance with its
terms and is in full force and effect on the date hereof, and neither the
Company nor any of the other parties thereto is in breach or default of
its obligations thereunder (nor has any event occurred which with notice,
lapse of time, or both, would constitute a breach thereof, or default
thereunder); the execution, delivery and performance of the Contribution
Agreement and consummation of the transactions contemplated therein did
not and will not (A) conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice,
lapse of time, or both, would constitute a breach of, or default under),
(i) any provision of the organizational documents of the Company, NYMC or
NYMF, or (ii) any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which
the Company, NYMC or NYMF is a party or by which any of them or their
respective properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company, NYMC or NYMF; or (B) result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company, NYMC or NYMF; and
(vv) The Company is organized in conformity with the requirements for qualification as a real estate investment trust (a "REIT") under the Code; the contemplated method of operation of the Company, NYMC and NYMF (as described in the Prospectus) will enable the Company to meet the requirements for taxation as a REIT under the Code for its short taxable year commencing on the business day preceding the Closing Time and ending December 31, 2004 and in subsequent years; no transaction or other event has occurred which would cause the Company to not be able to qualify as a REIT for its short taxable year described above or any subsequent years and the Company intends to qualify as a REIT for such taxable year and all subsequent years.
(ww) Each Founding Member represents and warrants to the Underwriters that:
(i) Such Founding Member has full power and authority to enter
into this Agreement and the Contribution Agreement. All
authorizations and consents necessary for the execution, delivery
and performance of this Agreement and the Contribution Agreement by
such Founding Member have been obtained. This Agreement and the
Contribution Agreement have been duly authorized, executed and
delivered by or on behalf of such Founding Member and constitute the
valid and binding agreement of such Founding Member enforceable
against such Founding Member in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally, and by general equitable principles, and except to
the extent that the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws
and public policy considerations in respect thereof;
(ii) The performance of this Agreement and the Contribution Agreement and the consummation of the transactions contemplated herein and therein will not conflict with, or result in any breach of, or constitute a default under (nor constitute any event which with notice, lapse of time, or both, would constitute a breach of, or default under), any provision of any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which such Founding Member is a party or by which he or his properties may be bound or affected, or under any federal, state, local or foreign law, regulation or rule or any decree, judgment or order applicable to such Founding Member, or result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of such Founding Member;
(iii) no approval, authorization, consent or order of or filing with any federal, state or local governmental or regulatory commission, board, body, authority or agency is required in connection with such Founding Member's execution, delivery and performance of this Agreement or the Contribution Agreement or the consummation of the transactions contemplated herein or therein;
(iv) such Founding Member (i) has carefully reviewed the
representations and warranties of the Company, NYMC and the Founding
Members contained in this Agreement and has no reason to believe
that such representations and warranties are untrue or incorrect and
(ii) is familiar with the Registration Statement and the Prospectus
and has no knowledge of any fact, condition or information required
to be disclosed in the Registration Statement or the Prospectus
which is not so disclosed;
(v) all information with respect to such Founding Member contained in the Registration Statement and the Prospectus (as amended or supplemented, if the Company shall have filed with the Commission any amendment or supplement thereto) was complete and accurate in all material respects on the
effective date of the Registration Statement, on the date of the Prospectus, at the Closing Time and on each Date of Delivery;
(vi) such Founding Member does not have any registration or other similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as are described in the Prospectus under "Shares Eligible for Future Sale;"
(vii) such Founding Member does not have, or has waived prior to the date hereof, any preemptive right, co-sale right or right of first refusal or other similar right to purchase any of the Shares that are to be sold by the Company to the Underwriters pursuant to this Agreement; and such Founding Member does not own any warrants, options or similar rights to acquire, and does not have any right or arrangement to acquire, any capital stock, right, warrants, options or other securities from the Company, NYMC or NYMF other than those described in the Registration Statement and the Prospectus; and
(viii) except as otherwise disclosed to the Underwriters in writing, such Founding Member is not a member of or an affiliate of or associated with any member of the NASD.
4. Certain Covenants:
(a) The Company hereby agrees with each Underwriter:
(i) to furnish such information as may be required and otherwise to cooperate in qualifying the Shares for offering and sale under the securities or blue sky laws of such jurisdictions (both domestic and foreign) as the Representative may designate and to maintain such qualifications in effect as long as reasonably requested by the Representative for the distribution of the Shares, provided that the Company shall not be required to qualify as a foreign corporation or to consent to the service of process under the laws of any such state (except service of process with respect to the offering and sale of the Shares);
(ii) if, at the time this Agreement is executed and delivered, it is necessary for a post-effective amendment to the Registration Statement to be declared effective before the offering of the Shares may commence, the Company will endeavor to cause such post-effective amendment to become effective as soon as reasonably possible and will advise the Representative promptly and, if requested by the Representative, will confirm such advice in writing, when such post-effective amendment has become effective;
(iii) to prepare the Prospectus in a form approved by the Underwriters and file such Prospectus with the Commission pursuant to Rule 424(b) under the Securities Act not later than 4:30 p.m. (New York City time) on the day following the execution and delivery of this Agreement or on such other day as the parties may mutually agree, and to furnish promptly, and with respect to the initial delivery of such Prospectus, not later than 4:30 p.m. (New York City time) on the day following
the execution and delivery of this Agreement, or on such other day as the parties may mutually agree, to the Underwriters copies of the Prospectus (or of the Prospectus as amended or supplemented if the Company shall have made any amendments or supplements thereto after the effective date of the Registration Statement) in such quantities and at such locations as the Underwriters may reasonably request for the purposes contemplated by the Securities Act Regulations, which Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the version created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T;
(iv) to advise the Representative promptly and (if requested by the Representative) to confirm such advice in writing, when the Registration Statement has become effective and when any post-effective amendment thereto becomes effective under the Securities Act Regulations;
(v) to advise the Representative immediately, confirming such advice in writing, of (i) the receipt of any comments from, or any request by, the Commission for amendments or supplements to the Registration Statement or Prospectus or for additional information with respect thereto, or (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes and, if the Commission or any other government agency or authority should issue any such order, to make every reasonable effort to obtain the lifting or removal of such order as soon as possible; to advise the Representative promptly of any proposal to amend or supplement the Registration Statement or Prospectus and to file no such amendment or supplement to which the Representative shall reasonably object in writing;
(vi) for a period of three years from the date of this Agreement, to furnish to the Underwriters as soon as practicable after the filing thereof, copies of all reports, if any, filed by the Company with the NASD;
(vii) to advise the Underwriters promptly of the happening of any event known to the Company within the time during which a Prospectus relating to the Shares is required to be delivered under the Securities Act Regulations which would require the making of any change in the Prospectus then being used so that the Prospectus would not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend or supplement the Prospectus to comply with any law and, during such time, to promptly prepare and furnish to the Underwriters copies of the proposed amendment or supplement before filing any such amendment or supplement with the Commission and thereafter promptly furnish at the Company's own expense to the Underwriters, copies in such quantities and at such locations as the Representative may reasonably request of an appropriate amendment to the Registration Statement or supplement to the Prospectus so that the Prospectus as so amended or supplemented will not, in the light of the circumstances when it is so delivered, be misleading, and so that the Prospectus will comply with the law;
(viii) to file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may be required by the Securities Act or requested by the Commission;
(ix) prior to filing with the Commission any amendment to the Registration Statement or supplement to the Prospectus or any Prospectus pursuant to Rule 424 under the Securities Act, to furnish a copy thereof to the Representative and counsel for the Underwriters and obtain the consent of the Representative to the filing, which consent shall not be unreasonably withheld, delayed or conditioned;
(x) to furnish promptly to the Representative a signed copy of the Registration Statement, as initially filed with the Commission, and of all amendments or supplements to the Registration Statement, as filed with the Commission after the date hereof (including all exhibits filed therewith or incorporated by reference therein) and such number of conformed copies of the foregoing as the Representative may reasonably request;
(xi) During the period referred to in paragraph (vi) above to file all documents required to be filed with the Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act in the manner and within the time periods required by the Exchange Act and the Exchange Act Regulations;
(xii) to apply the net proceeds from the sale of the Shares in accordance with its statements under the caption "Use of Proceeds" in the Prospectus;
(xiii) to make generally available to its security holders and the Representative not later than the end of the fiscal quarter first occurring after the first anniversary of the effective date of the Registration Statement an earnings statement complying with the provisions of Section 11(a) of the Securities Act (in form, at the option of the Company, complying with the provisions of Rule 158 of the Securities Act Regulations,) covering a period of 12 months beginning after the effective date of the Registration Statement;
(xiv) to use its commercially reasonable efforts to maintain the listing of the Shares on the New York Stock Exchange and to file with the New York Stock Exchange all documents and notices required by the New York Stock Exchange of companies that have securities that are traded on the New York Stock Exchange;
(xv) to engage and maintain, at its expense, a registrar and transfer agent for the Shares;
(xvi) to refrain during a period of 180 days from the date of the Prospectus, without the prior written consent of the Representative, from, directly or indirectly, (i) offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option for the sale of, or otherwise disposing of or transferring, (or entering into any transaction or device which is designed to, or could be expected to, result in the disposition by any person at any time in the future of), any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or filing any registration statement under the Securities Act with respect to any of the foregoing, or (ii) entering into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold hereunder, or (B) any shares of Common Stock issued by the Company upon the exercise of an option outstanding on the date hereof and referred to in the Prospectus (C) Shares of Common Stock issued pursuant to the Company's 2004 Stock Incentive Plan upon completion of the transactions contemplated herein as disclosed in the Prospectus or upon approval of the compensation committee of the Company's Board of Directors or (D) shares of Common Stock issued by the Company in connection with any merger, acquisition, share exchange or other business combination transaction approved by the Company's Board of Directors, as long as such shares are restricted as to resale for at least the 180 day period referred to above;
(xvii) Prior to termination of the underwriting syndicate
contemplated by this Agreement, not to itself, and to use its best
efforts to cause its officers, directors and affiliates not to, (i)
take, directly or indirectly, any action designed to stabilize or
manipulate the price of any security of the Company, or which may
cause or result in, or which might in the future reasonably be
expected to cause or result in the stabilization or manipulation of
the price of any security of the Company, to facilitate the sale or
resale of any of the Shares, (ii) sell, bid for, purchase or pay
anyone any compensation for soliciting purchases of the Shares or
(iii) pay or agree to pay to any person any compensation for
soliciting any order to purchase any other securities of the
Company;
(xviii) to cause each 1% or greater stockholder, if any, and each executive officer and director (and each director nominee named in the Prospectus) of the Company, each of whom are listed on Schedule D-1 to Exhibit D attached hereto, to furnish to the Representative, prior to the first Date of Delivery, a lock-up letter agreement substantially in the form of Exhibit D hereto.
(xix) that the Company shall obtain or maintain, as appropriate, Directors and Officers liability insurance in the minimum amount of $12 million which shall apply to the offering contemplated herein;
(xx) if at any time during the 90-day period after the Registration Statement becomes effective, any rumor, publication or event relating to or affecting the Company shall occur as a result of which, in the reasonable opinion of the Representative, the market price of the Common Stock has been or is likely to be materially affected (regardless of whether such rumor, publication or event necessitates a supplement to or amendment of the Prospectus) and after written notice from the Representative advising the Company to the effect set forth above, to consult with the Representative concerning whether a press release or other public statement responding to or commenting on such rumor, publication or event is appropriate and to consult with the Representative concerning the substance of any such press release or public statement, provided, however, that, as long as the Company has satisfied its obligations under this subparagraph (xx), the final decisions regarding whether to disseminate any such press release or other public statement, and the content of any such press release or public statement, shall rest with the Company;
(xxi) that the Company will comply with all of the provisions of any undertakings in the Registration Statement; and
(xxii) that the Company will continue to use its best efforts to meet the requirements to qualify as a REIT under the Code; and
(xxiii) that the Company will use its best efforts to consummate its acquisition of NYMC pursuant to the Contribution Agreement at the Closing Time with respect to the sale of the Initial Shares pursuant to this Agreement.
(xxiv) that the Company (i) will comply with all securities and other applicable laws, rules and regulations, including without limitation, the rules and regulations of the NASD that are applicable to the Company, in each jurisdiction in which the Directed Shares are offered in connection with the Directed Share Program and (ii) will pay all reasonable fees and disbursements of counsel incurred by the Underwriters in connection with the Directed Share Program and any stamp duties, similar taxes or duties or other taxes, if any, incurred by the Underwriters in connection with the Directed Share Program.
(xxv) that one of the members of the Audit Committee of the Board of Directors of the Company will satisfy the requirements of the Sarbanes-Oxley Act applicable to the Company's "audit committee financial expert" as defined therein.
(b) The Founding Members hereby agree with each Underwriter to use their best efforts to cause the consummation of the Company's acquisition of NYMC pursuant to the Contribution Agreement at the Closing Time with respect to the sale of the Initial Shares pursuant to this Agreement.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and all amendments or supplements thereto, and
the printing and furnishing of copies of each thereof to the Underwriters
and to dealers (including costs of mailing and shipment), (ii) the
issuance and delivery of the Shares to the Underwriters, including payment
of any stock or other transfer taxes or duties payable upon the sale of
the Shares (and preparation of certificates therefor, if applicable) to
the Underwriters, (iii) the qualification of the Shares for offering and
sale under state laws that the Representative has determined are
appropriate (including related filing fees and related fees and
disbursements of counsel for the Underwriters), (iv) filing for review of
the public offering of the Shares by the NASD (including the legal fees
and filing fees and other disbursements of counsel for the Underwriters
relating thereto), (v) the fees and expenses of any transfer agent or
registrar for the Shares and miscellaneous expenses referred to in the
Registration Statement, (vi) the fees and expenses incurred in connection
with the inclusion of the Shares in the New York Stock Exchange, (vii)
making road show presentations with respect to the offering of the Shares,
(viii) preparing and distributing bound volumes of transaction documents
for the Representative and its legal counsel and (ix) the performance of
the Company's other obligations hereunder. Upon the request of the
Representative, the Company will provide funds in advance for filing fees.
(b) The Company agrees to reimburse the Representative for its reasonable out-of-pocket expenses in connection with the performance of its activities under this Agreement, including, but not limited to, costs such as background investigations, printing, facsimile, courier service, direct computer expenses, roadshow, accommodations, travel and the fees and disbursements of counsel for the Underwriters, subject to a maximum of $400,000, of which $25,000 has been previously paid to the Representative as a deposit; provided, that the maximum such reimbursement shall be $200,000 if this Agreement is terminated by the Underwriters for any reason other than as set forth in Section 5(c) below, of which $25,000 has been previously paid to the Representative as a deposit.
(c) Notwithstanding the foregoing, if this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company, NYMC or the Founding Members to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company, NYMC or the Founding Members shall be unable to perform its or their obligations under this Agreement, the Company and NYMC, jointly and severally, will reimburse, without any maximum limitation, the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including but not limited to costs for background investigations, printing, facsimile, courier service, direct computer expenses, roadshow, accommodations, travel and the fees and disbursements of Underwriters' counsel) and any other advisors, accountants, appraisers, etc. reasonably incurred by such Underwriters in connection with this Agreement or the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations.
The obligations of the Underwriters hereunder to purchase Shares at the Closing Time or on each Date of Delivery, as applicable, are subject to the accuracy of the representations and warranties on the part of the Company, NYMC and the Founding Members hereunder on the date hereof and at the Closing Time and on each Date of Delivery, as applicable, the performance by the Company, NYMC and the Founding Members of their respective obligations hereunder and to the satisfaction of the following further conditions at the Closing Time or on each Date of Delivery, as applicable:
(a) The Company shall furnish to the Underwriters at the Closing Time and on each Date of Delivery two opinions of Hunton & Williams LLP (each of which may rely on the opinion of Venable LLP to the extent that any opinion contained therein pertains to Maryland law), counsel for the Company, NYMC and NYMF, addressed to the Underwriters and dated the Closing Time and each Date of Delivery and in form and substance reasonably satisfactory to McDermott, Will & Emery, counsel for the Underwriters, with respect to the matters set forth on Exhibit A-1 and Exhibit A-2 hereto.
(b) The Company shall furnish to the Underwriters at the Closing Time and on each Date of Delivery an opinion of Venable LLP, special Maryland counsel for the Company, addressed to the Underwriters and dated the Closing Time and each Date of Delivery and in form and substance reasonably satisfactory to McDermott, Will & Emery, counsel for the Underwriters, with respect to the matters set forth on Exhibit B hereto.
(c) The Company shall furnish to the Underwriters at the Closing Time and on each Date of Delivery an opinion of Wiener Brodsky, Sidman & Kider, P.C., special regulatory counsel for the Company, addressed to the Underwriters and dated the Closing Time and each Date of Delivery and in form and substance reasonably satisfactory to McDermott, Will & Emery, counsel for the Underwriters, with respect to the matters set forth on Exhibit C hereto.
(d) The Representative shall have received from Deloitte & Touche LLP, letters dated, respectively, as of the date of this Agreement, the Closing Time and each Date of Delivery, as the case may be, addressed to the Representative, in form and substance reasonably satisfactory to the Representative, relating to the financial statements, including any pro forma financial statements, of the Company and NYMC, data with respect to NYMC's historical operations, and such other financial matters included within any Preliminary Prospectus and the Prospectus as are customarily covered by comfort letters issued in connection with registered public offerings involving similar companies.
In the event that the letters referred to above set forth any changes in indebtedness, decreases in total assets or earnings, increases in borrowings, or changes in NYMC's historical operating data from the related information set forth in any Preliminary Prospectus or the Prospectus it shall be a further condition to the obligations of the Underwriters that (A) such letters shall be accompanied by a written explanation of the Company as to the significance thereof, unless the Representative deems such explanation unnecessary, and (B) such changes, decreases or increases do not, in the sole judgment of the Representative, make it impractical or inadvisable to proceed with the purchase and delivery of the Shares as contemplated by the Registration Statement.
(e) No amendment or supplement to the Registration Statement or Prospectus shall have been filed to which the Underwriters shall have objected in writing.
(f) Prior to the Closing Time and each Date of Delivery (i) no stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of any Preliminary Prospectus or Prospectus shall have been issued, and no proceedings for such purpose shall have been initiated or threatened by the Commission, and no suspension of the qualification of the Shares for offering or sale in any jurisdiction, or the initiation or threatening of any proceedings for any of such purposes, shall have occurred; (ii) all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of the Representative; and (iii) the Registration Statement and the Prospectus shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) All filings with the Commission required by Rule 424 under the Securities Act to have been filed by the Closing Time shall have been made within the applicable time period prescribed for such filing by such Rule and in accordance with this Agreement.
(h) Between the date of this Agreement and the Closing Time or the relevant Date of Delivery: (i) there shall not have been a Material Adverse Change or any event or development that could reasonably be expected to have a Material Adverse Effect and (ii) no transaction which is material and unfavorable to the Company shall have been entered into by the Company or any of its subsidiaries, in each case, which in the Representative's
sole judgment, makes it impracticable or inadvisable to proceed with the public offering of the Shares as contemplated by the Registration Statement.
(i) The Shares shall have been approved for listing on the New York Stock Exchange, subject to official notice of issuance.
(j) The NASD shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
(k) The Representative shall have received lock-up letter agreements from each executive officer and director of the Company (and each director nominee named in the Prospectus) and each 1% or greater stockholder of the Company, if any, substantially in the form of Exhibit D, and such letter agreements shall be in full force and effect. The persons from whom the Representative expects to receive such lock-up letter agreements are listed on Schedule D-1 to Exhibit D.
(l) The Company will, at the Closing Time and on each Date of Delivery, deliver to the Underwriters a certificate of its Chairman of the Board, Chief Executive Officer, President, Chief Operating Officer or Vice President and Chief Accounting Officer or Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company and NYMC in this Agreement are, if qualified as to materiality, true and correct in all respects and, if not so qualified, true and correct in all material respects, as if made on and as of the date hereof, and the Company has complied in all material respects with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the date hereof;
(ii) no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the Securities Act;
(iii) each Preliminary Prospectus and, when the Registration Statement became effective and at all times subsequent thereto up to the date hereof, the Registration Statement and the Prospectus, and any amendments or supplements thereto, contained all material information required to be included therein by the Securities Act or the Exchange Act and the applicable rules and regulations of the Commission thereunder and in all material respects conformed to the requirements of the Securities Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder; the Registration Statement and the Prospectus, and any amendments or supplements thereto, did not and do not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and, since the effective date of the Registration Statement, there has occurred no event
required to be set forth in an amendment or supplement to the Prospectus which has not been so set forth; and
(iv) subsequent to the respective dates as of which information is given in the Registration Statement, each Preliminary Prospectus and the Prospectus, and except as may be otherwise stated in such Registration Statement, Preliminary Prospectus or Prospectus, there has not been (A) a Material Adverse Change or any event or development including, but not limited to any loss or damage (whether or not insured) to the property of the Company, NYMC or NYMF, that could reasonably be expected to have Material Adverse Effect, whether or not arising in the ordinary course of business, (B) any transaction that is material to the Company, NYMC and NYMF taken as a whole, entered into by the Company, NYMC or NYMF, (C) any liability or obligation, contingent or otherwise, directly or indirectly incurred by the Company, NYMC or NYMF that is material to the Company and its subsidiaries taken as a whole, (D) any dividend or distribution of any kind declared, paid or made by the Company or NYMC on any class of its capital stock or membership interests or any repurchase or redemption by the Company or NYMC of any class of capital stock or other equity interests, or (E) any change in the capital stock or membership interests, as applicable, or long-term debt or short-term borrowings of the Company, NYMC or NYMF;
(m) Each of the Founding Members will, at the Closing Time and on each Date of Delivery, deliver to the Underwriters a certificate signed by such Founding Member to the effect set forth in subsections 6(k)(i) through (k)(iv) above.
(n) NYMC will, at the Closing Time and on each Delivery Date, deliver to the Underwriters a certificate of its Chief Executive Officer, President, Chief Operating Officer or Vice President and Chief Financial Officer to the effect set forth in subsections 6(k)(i) through (k)(iv) above but only with respect to NYMC.
(o) The Company, NYMC and the Founding Members shall have furnished to the Underwriters such other documents and certificates as to the accuracy and completeness of any statement in the Registration Statement and the Prospectus, the representations, warranties and statements of the Company, NYMC and the Founding Members contained herein, the performance by the Company, NYMC and the Founding Members of their respective covenants contained herein, and the fulfillment of any conditions contained herein, as of the Closing Time or any Date of Delivery, as the Underwriters may reasonably request.
(p) The Company, NYMC and the Founding Members each shall have performed in all material respects its obligations under this Agreement as are to be performed by the terms hereof at or before the Closing Time or the relevant Date of Delivery.
(q) The consummation of the transactions contemplated by the Contribution Agreement shall occur at the Closing Time with respect to the Initial Shares pursuant to this Agreement.
7. Termination:
The obligations of the several Underwriters hereunder shall be subject to termination in the absolute discretion of the Representative, at any time prior to the Closing Time or any Date of Delivery, (i) if any of the conditions specified in Section 6 shall not have been fulfilled when and as required by this Agreement to be fulfilled, or (ii) if there has been since the respective dates as of which information is given in the Registration Statement or the Prospectus, any Material Adverse Change or any event or development which could reasonably be expected to have a Material Adverse Effect, or material change in management of the Company or any Subsidiary, NYMC or NYMF, whether or not arising in the ordinary course of business, or (iii) if there has occurred any outbreak or escalation of hostilities or other national or international calamity or crisis or change in economic, political or other conditions the effect of which on the financial markets of the United States is such as to make it, in the sole judgment of the Representative, impracticable to market the Shares or enforce contracts for the sale of the Shares, or (iv) if trading in any securities of the Company has been suspended by the Commission or by New York Stock Exchange, or if trading generally on the New York Stock Exchange or in the Nasdaq over-the-counter market has been suspended (including an automatic halt in trading pursuant to market-decline triggers, other than those in which solely program trading is temporarily halted), or limitations on prices for trading (other than limitations on hours or numbers of days of trading) have been fixed, or maximum ranges for prices for securities have been required, by such exchange or the NASD or the over-the-counter market or by order of the Commission or any other governmental authority, or (v) any federal or state statute, regulation, rule or order of any court or other governmental authority has been enacted, published, decreed or otherwise promulgated which, in the reasonable opinion of the Representative, materially adversely affects or could reasonably be expected to materially adversely affect the business or operations of the Company, NYMC and NYMF taken as a whole.
If the Representative elects to terminate this Agreement as provided in this Section 7, the Company and the Underwriters shall be notified promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not carried out by the Underwriters for any reason permitted under this Agreement or if such sale is not carried out because the Company shall be unable to comply in all material respects with any of the terms of this Agreement, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 5 and 9 hereof) and the Underwriters shall be under no obligation or liability to the Company under this Agreement (except to the extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of Delivery in its obligation to take up and pay for the Shares to be purchased by it under this Agreement on such date, the Representative shall have the right, within 36 hours after such default, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Shares which such Underwriter shall have agreed but failed to take up and pay for (the "Defaulted Shares"). Absent the completion of such arrangements within such 36-hour period, (i) if the total number of Defaulted Shares does not exceed 10% of the total number of Shares to be purchased on such date, each non-defaulting Underwriter shall take up and pay for (in addition to the number of Shares which it is otherwise obligated to purchase on such date pursuant to this Agreement) the portion of the total number of Shares agreed to be purchased by the defaulting Underwriter on such date that its underwriting obligations hereunder bears to the underwriting obligations of all non-defaulting Underwriters; and (ii) if the total number of Defaulted Shares exceeds 10% of such total, the Representative may terminate this Agreement by notice to the Company, without liability of any party to any other party except that the provisions of Sections 5 and 9 hereof shall at all times be effective and shall survive such termination.
Without relieving any defaulting Underwriter from its obligations hereunder, the Company agrees with the non-defaulting Underwriters that it will not sell any Shares hereunder at the Closing Time or on any Date of Delivery unless all of the Shares to be purchased on such date are purchased on such date by the Underwriters (or by substituted Underwriters selected by the Representative with the approval of the Company or selected by the Company with the approval of the Representative).
If a new Underwriter or Underwriters are substituted for a defaulting Underwriter in accordance with the foregoing provision, the Company or the non-defaulting Underwriters shall have the right to postpone the Closing Time or the relevant Date of Delivery for a period not exceeding five business days in order that any necessary changes in the Registration Statement and Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and include any Underwriter substituted under this Section 8 with the same effect as if such substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and NYMC and the Underwriters:
(a) The Company and NYMC, jointly and severally, agree to indemnify,
defend and hold harmless each Underwriter and any person who controls any
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, expense,
liability, damage or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim
arises out of, or is based upon, or relates to (i) any breach of any
representation, warranty or covenant of the Company, NYMC or any
Founding Member contained herein, (ii) any failure on the part of the Company to comply with any applicable law, rule or regulation relating to the offering of securities being made pursuant to the Prospectus, (iii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company), the Prospectus (the term Prospectus for the purpose of this Section 9 being deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus as amended or supplemented by the Company), or (iv) any omission or alleged omission to state a material fact required to be stated in any such Registration Statement or Prospectus or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except insofar as any such loss, expense, liability, damage or claim arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in and in conformity with information furnished in writing by the Underwriters through the Representative to the Company expressly for use in such Registration Statement or Prospectus; provided, however, that the Company's and NYMC's obligation to indemnify the Underwriters and such controlling persons pursuant to Section 9(a)(i) above shall be limited to losses, expenses, liabilities and damages arising out of claims brought by third parties. The indemnity agreement set forth in this Section 9(a) shall be in addition to any liability which the Company or NYMC may otherwise have to such Underwriters or controlling persons or otherwise.
If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the Company or NYMC pursuant to subsection (a) above, such Underwriter shall promptly notify the Company or NYMC, as applicable, in writing of the institution of such action, and the Company or NYMC, as applicable, shall assume the defense of such action, including the employment of counsel and payment of expenses; provided, however, that any failure or delay to so notify the Company or NYMC, as applicable, will not relieve the Company or NYMC of any obligation hereunder, except to the extent that its ability to defend is actually impaired or prejudiced by such failure or delay. Such Underwriter or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless the employment of such counsel shall have been authorized in writing by the Company or NYMC, as applicable, in connection with the defense of such action, or the Company or NYMC, as applicable, shall not have employed counsel to have charge of the defense of such action within a reasonable time or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those available to the Company or NYMC, as applicable (in which case the Company or NYMC, as applicable, shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the Company or NYMC, as applicable, and paid as incurred (it being understood, however, that the Company or NYMC, as applicable, shall not be liable for the expenses of more than one separate firm of attorneys for the Underwriters or controlling persons in any one
action or series of related actions in the same jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). Anything in this paragraph to the contrary notwithstanding, neither the Company nor NYMC, as applicable, shall be liable for any settlement of any such claim or action effected without its written consent.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify, defend and hold harmless NYMC, the Company, the Company's
directors, the Company's officers that signed the Registration Statement,
and any person who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against
any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which any such person may incur under the
Securities Act, the Exchange Act or otherwise, but only insofar as such
loss, expense, liability, damage or claim arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by
such Underwriter through the Representative to the Company expressly for
use in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or the
Prospectus or (ii) any omission or alleged omission to state a material
fact in connection with such information required to be stated either in
such Registration Statement or Prospectus or necessary to make such
information, in the light of the circumstances under which made, not
misleading. The statements set forth in the third full paragraph on page
133 under the caption "Underwriting" in the Preliminary Prospectus and the
Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by or on behalf of any
Underwriter through the Representative to the Company for purposes of
Section 3(l) and this Section 9. The indemnity agreement set forth in this
Section 9(b) shall be in addition to any liabilities that such Underwriter
may otherwise have to such persons or otherwise.
If any action is brought against the Company or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Company or such person shall promptly notify the Representative in writing of the institution of such action and the Representative, on behalf of the Underwriters, shall assume the defense of such action, including the employment of counsel and payment of expenses; provided, however, that any failure or delay to so notify the Representative will not relieve any Underwriter hereunder, except to the extent that its ability to defend is actually impaired or prejudiced by such failure or delay. The Company or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company or such person unless the employment of such counsel shall have been authorized in writing by the Representative in connection with the defense of such action or the Representative shall not have employed counsel to have charge of the defense of such action within a reasonable time or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those available to the Underwriters (in which case the
Representative shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by such Underwriter and paid as incurred (it being understood, however, that the Underwriters shall not be liable for the expenses of more than one separate firm of attorneys in any one action or series of related actions in the same jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). Anything in this paragraph to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such claim or action effected without the written consent of the Representative.
(c) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) and (b) of this Section 9 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, expenses, liabilities, damages or claims
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the
Shares or (ii) if (but only if) the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and of the
Underwriters in connection with the statements or omissions which resulted
in such losses, expenses, liabilities, damages or claims, as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Underwriters shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company bear to the underwriting discounts and commissions received by the
Underwriters. The relative fault of the Company and of the Underwriters
shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the
Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any
claim or action.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in subsection
(c)(i) and, if applicable (ii), above. Notwithstanding the provisions of
this Section 9, no Underwriter shall be required to contribute any amount
in excess of the underwriting discounts and commissions applicable to the
Shares purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 9 are several in proportion to their respective underwriting commitments and not joint.
(e) The Company agrees to indemnify and hold harmless each Underwriter and its affiliates and each person, if any, who controls each Underwriter and its affiliates within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (i) caused by any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the consent of the Company for distribution to participants in connection with the Directed Share Program, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) as a result of the failure of any participant to pay for and accept delivery of Directed Shares that the participant has agreed to purchase; or (iii) otherwise related to, arising out of, or in connection with the Directed Share Program, other than as a result of the gross negligence or willful misconduct of the Representative.
10. Survival:
The indemnity and contribution agreements contained in Section 9 and the
covenants, warranties and representations of the Company, NYMC and the Founding
Members contained in Sections 3, 4 and 5 of this Agreement shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter, or any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors and officers, NYMC, the Founding Members or
any person who controls the Company or NYMC within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the sale and delivery of the Shares. The
Company, NYMC, each Founding Member and each Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding against it
and, in the case of the Company, against any of the Company's officers and
directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement, each Preliminary Prospectus or the
Prospectus.
11. Notices:
Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if delivered to Friedman, Billings, Ramsey & Co., Inc., 1001 19th Street North, Arlington, Virginia 22209, Attention: Syndicate Department; if to the Company, shall be sufficient in all respects if delivered to the Company at the offices of the Company at 1301 Avenue of the Avenues, New York, New York 10019, Attention: Chief Executive Officer; if to NYMC, shall be sufficient in all respects if delivered to NYMC at the offices of NYMC at 1301 Avenue of the Avenues, New York, New York 10019, Attention: Chief Executive Officer; if to Schnall, shall be sufficient in all respect if delivered to Schnall at 1301 Avenue of the Americas, New
York, New York 10019; and if to Fierro, shall be sufficient in all respects if delivered to Fierro at 1301 Avenue of the Americas, New York, New York 10019.
12. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.
13. Parties at Interest:
The Agreement herein set forth has been and is made solely for the benefit of the Underwriters, the Company, NYMC and the controlling persons, directors and officers referred to in Sections 9 and 10 hereof, and their respective successors, assigns, executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.
14. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which together shall constitute one and the same agreement among the parties. A facsimile signature shall constitute an original signature for all purposes.
If the foregoing correctly sets forth the understanding among the Company, NYMC, the Founding Members and the Underwriters, please so indicate in the space provided below for the purpose, whereupon this Agreement shall constitute a binding agreement among the Company, NYMC, the Founding Members and the Underwriters.
Very truly yours,
NEW YORK MORTGAGE TRUST, INC.
By:______________________________
Name:
Title:
NEW YORK MORTGAGE COMPANY, LLC
By:______________________________
Name:
Title:
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By:_______________________________
Title:
For itself and as Representative of the
other Underwriters named on Schedule I
hereto.
Schedule I
Number of Initial Number of Option
Underwriter Shares to be Purchased Shares to be Purchased
----------- ---------------------- ----------------------
Friedman, Billings, Ramsey
& Co., Inc. [ ] [ ]
J.P. Morgan Securities,
Inc. [ ] [ ]
RBC Capital Markets
Corporation
----------- ------------
Total..[ ]...............[ ]
=========== ============
|
Exhibit 3.01
NEW YORK MORTGAGE TRUST, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
FIRST: New York Mortgage Trust, Inc., a Maryland corporation (the "Corporation"), desires to amend and restate its charter (the "Charter") as currently in effect and as hereinafter amended.
SECOND: The following provisions are all the provisions of the Charter currently in effect and as hereinafter amended.
ARTICLE I
INCORPORATION
The undersigned, Daniel M. LeBey, whose address is c/o Hunton & Williams LLP, Riverfront Plaza, East Tower, 951 E. Byrd Street, Richmond, Virginia 23219, being at least eighteen (18) years of age, does hereby form a corporation under the general laws of the State of Maryland.
ARTICLE II
NAME
The name of the corporation (which is hereinafter called the "Corporation") is:
New York Mortgage Trust, Inc.
ARTICLE III
PURPOSE
The purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation, engaging in business as a real estate investment trust under the Internal Revenue Code of 1986, as amended, or any successor statute (the "Code")) for which corporations may be organized under the general laws of the State of
Maryland as now or hereafter in force. For purposes of this Charter, "REIT" means a real estate investment trust under Sections 856 through 860 of the Code.
ARTICLE IV
RESIDENT AGENT AND PRINCIPAL OFFICE IN MARYLAND
The address of the principal office of the Corporation in this State is c/o The Corporation Trust Incorporated, 300 E. Lombard Street, Baltimore, Maryland 21202. The name and address of the resident agent of the Corporation are The Corporation Trust Incorporated, 300 E. Lombard Street, Baltimore, Maryland 21202. The resident agent is a Maryland corporation.
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS
Section 5.1 Number of Directors. The business and affairs of the Corporation shall be managed under the direction of the Board of Directors. The number of directors of the Corporation shall be nine (9), which number may be increased or decreased only by the Board of Directors pursuant to the Bylaws of the Corporation (the "Bylaws"), but shall never be less than the minimum number required by the Maryland General Corporation Law, or any successor statute (the "MGCL"). The names of the directors who shall serve until the first annual meeting of stockholders and until their successors are duly elected and qualify are:
Steven B. Schnall
David A. Akre
Raymond A. Redlingshafer, Jr.
David R. Bock
Alan L. Hainey
Steven G. Norcutt
Mary Dwyer Pembroke
Jerome F. Sherman
Thomas W. White
These directors may increase the number of directors and may fill any vacancy, whether resulting from an increase in the number of directors or otherwise, on the Board of Directors occurring before the first annual meeting of stockholders in the manner provided in the Bylaws.
The Corporation elects, at such time as it becomes eligible to make the election provided for under Section 3-802(b) of the MGCL, that, except as may be provided by the Board of Directors in setting the terms of any class or series, any and all vacancies on the Board of Directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred.
Section 5.2 Extraordinary Actions. Except as specifically provided in Section 5.8 (relating to removal of directors) and in Article VIII, notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of shares entitled to cast a greater number of votes, any such action shall be effective and valid if taken or approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter.
Section 5.3 Authorization by Board of Stock Issuance. The Board of Directors may authorize the issuance from time to time of shares of stock of the Corporation of any class or series, whether now or hereafter authorized, or securities or rights convertible into shares of its stock of any class or series, whether now or hereafter authorized, for such consideration as the
Board of Directors may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the charter (the "Charter") or the Bylaws.
Section 5.4 Preemptive Rights and Appraisal Rights. Except as may be provided by the Board of Directors in setting the terms of classified or reclassified shares of stock pursuant to Section 6.4 or as may otherwise be provided by contract, no holder of shares of stock of the Corporation shall, as such holder, have any preemptive right to purchase or subscribe for any additional shares of stock of the Corporation or any other security of the Corporation which it may issue or sell. Holders of shares of stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL unless the Board of Directors, upon the affirmative vote of a majority of the Board of Directors, shall determine that such rights apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such rights.
Section 5.5 Indemnification. The Corporation shall have the power, to the maximum extent permitted by Maryland law in effect from time to time, to obligate itself to indemnify, and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (a) any individual who is a present or former director or officer of the Corporation or (b) any individual who, while a director of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner or trustee of another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his service in any of the foregoing capacities. The
Corporation shall have the power, with the approval of the Board of Directors,
to provide such indemnification and advancement of expenses to a person who
served a predecessor of the Corporation in any of the capacities described in
(a) or (b) above and to any employee or agent of the Corporation or a
predecessor of the Corporation.
Section 5.6 Determinations by Board. The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board of Directors consistent with the Charter and in the absence of actual receipt of an improper benefit in money, property or services or active and deliberate dishonesty established by a court, shall be final and conclusive and shall be binding upon the Corporation and every holder of shares of its stock: the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, redemption of its stock or the payment of other distributions on its stock; the amount of paid-in surplus, net assets, other surplus, annual or other net profit, cash flow, fund from operations, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation or of any shares of stock of the Corporation; the number of shares of stock of any class of the Corporation; any matter relating to the acquisition, holding and disposition of any assets by the Corporation; or any other matter relating to the business and affairs of the Corporation or required or permitted by the Charter to be determined by the Board of Directors.
Section 5.7 REIT Qualification. If the Board of Directors determines that it is no longer in the best interests of the Corporation to continue to be qualified as a REIT, the Board of Directors may revoke or otherwise terminate the Corporation's REIT election pursuant to Section 856(g) of the Code. The Board of Directors also may determine that compliance with any restriction or limitation on stock ownership and transfers set forth in Article VII is no longer required for REIT qualification.
Section 5.8 Removal of Directors. Subject to the rights of holders of one or more classes or series of Preferred Stock to elect or remove one or more directors, any director, or the entire Board of Directors, may be removed from office at any time but only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors.
ARTICLE VI
STOCK
Section 6.1 Authorized Shares. The Corporation has authority to issue 600,000,000 shares of stock, consisting of 400,000,000 shares of Common Stock, $0.01 par value per share ("Common Stock"), and 200,000,000 shares of Preferred Stock, $0.01 par value per share ("Preferred Stock"). The aggregate par value of all authorized shares of stock having par value is $6,000,000. If shares of one class of stock are classified or reclassified into shares of another class of stock pursuant to this Article VI, the number of authorized shares of the former class shall be automatically decreased and the number of shares of the latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate number of shares of stock of all classes that the Corporation has authority to issue shall not be more than the total number of shares of stock set forth in the first sentence of this paragraph. The Board of Directors, without any action by the stockholders of the Corporation,
may amend the Charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Corporation has authority to issue.
Section 6.2 Common Stock. Subject to the provisions of Article VII, each share of Common Stock shall entitle the holder thereof to one vote. The Board of Directors may reclassify any unissued shares of Common Stock from time to time in one or more classes or series of stock.
Section 6.3 Preferred Stock. The Board of Directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time, in one or more classes or series of stock.
Section 6.4 Classified or Reclassified Shares. Prior to
issuance of classified or reclassified shares of any class or series, the Board
of Directors by resolution shall: (a) designate that class or series to
distinguish it from all other classes and series of stock of the Corporation;
(b) specify the number of shares to be included in the class or series; (c) set
or change, subject to the provisions of Article VII and subject to the express
terms of any class or series of stock of the Corporation outstanding at the
time, the preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms and
conditions of redemption for each class or series; and (d) cause the Corporation
to file articles supplementary with the State Department of Assessments and
Taxation of Maryland ("SDAT"). Any of the terms of any class or series of stock
set or changed pursuant to clause (c) of this Section 6.4 may be made dependent
upon facts or events ascertainable outside the Charter (including determinations
by the Board of Directors or other facts or events within the control of the
Corporation) and may vary among holders thereof, provided that the manner in
which such
facts, events or variations shall operate upon the terms of such class or series of stock is clearly and expressly set forth in the articles supplementary or other Charter document accepted for record by the SDAT.
Section 6.5 Charter and Bylaws. All persons who shall acquire stock in the Corporation shall acquire the same subject to the provisions of the Charter and the Bylaws.
ARTICLE VII
RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES
Section 7.1 Definitions. For the purpose of this Article VII, the following terms shall have the following meanings:
Aggregate Stock Ownership Limit. The term "Aggregate Stock Ownership Limit" shall mean nine and four-tenths percent (9.4%) in value of the aggregate of the outstanding shares of Capital Stock.
Beneficial Ownership. The term "Beneficial Ownership" shall mean ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have the correlative meanings.
Business Day. The term "Business Day" shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.
Capital Stock. The term "Capital Stock" shall mean all classes or series of stock of the Corporation, including, without limitation, Common Stock and Preferred Stock.
Charitable Beneficiary. The term "Charitable Beneficiary"
shall mean one or more beneficiaries of the Trust as determined pursuant to
Section 7.3.6, provided that each such organization must be described in Section
501(c)(3) of the Code and contributions to each such organization must be
eligible for deduction under one of Sections 170(b)(1)(A), 2055 and 2522 of the
Code.
Charitable Trust. The term "Charitable Trust" shall mean any trust provided for in Section 7.3.1.
Common Stock Ownership Limit. The term "Common Stock Ownership Limit" shall mean nine and four-tenths percent (9.4%) in value or in number of shares, whichever is more restrictive, of the outstanding shares of Common Stock of the Corporation excluding any outstanding shares of Common Stock not treated as outstanding for federal income tax purposes.
Constructive Ownership. The term "Constructive Ownership" shall mean ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms "Constructive Owner," "Constructively Owns" and "Constructively Owned" shall have the correlative meanings.
Disqualified Organization. The term "Disqualified Organization" shall mean (i) the United States, any state or political subdivision thereof, any foreign government, any international organization, and any agency or instrumentality of the foregoing, (ii) any tax-exempt organization (other than a farmers' cooperative described in Section 521 of the Code) that is exempt from both income taxation and from taxation under the unrelated business taxable income provisions of the Code, and (iii) any rural electrical or telephone cooperative.
Excepted Holder. The term "Excepted Holder" shall mean a stockholder of the Corporation for whom an Excepted Holder Limit is created by the Charter or by the Board of Directors pursuant to Section 7.2.7, and shall include Steven B. Schnall, as long as the Excepted Holder Limit for Steven B. Schnall (described below) remains in effect pursuant to its terms.
Excepted Holder Limit. The term "Excepted Holder Limit" shall
mean, provided that the affected Excepted Holder agrees to comply with the
requirements established by the Charter or by the Board of Directors pursuant to
Section 7.2.7 and subject to adjustment pursuant to Section 7.2.8, the
percentage limit established for an Excepted Holder by the Charter or by the
Board of Directors pursuant to Section 7.2.7. Subject to adjustment pursuant to
Section 7.2.8, the Excepted Holder Limit for Steven B. Schnall shall be twelve
percent (12.0%) in value of the aggregate of the outstanding shares of Capital
Stock and twelve percent (12.0%) in value or in number of shares, whichever is
more restrictive, of the outstanding shares of Common Stock of the Corporation.
Initial Date. The term "Initial Date" shall mean the date of issuance of Common Stock pursuant to the initial underwritten public offering of Common Stock.
Market Price. The term "Market Price" on any date shall mean, with respect to any class or series of outstanding shares of Capital Stock, the Closing Price for such Capital Stock on such date. The "Closing Price" on any date shall mean the last reported sale price for such Capital Stock, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Capital Stock, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE or, if such Capital Stock is not listed or admitted to trading on the NYSE, as reported on the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which such Capital Stock is listed or admitted to trading or, if such Capital Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if such Capital Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Capital Stock selected by the Board of Directors of the Corporation or, in the event that no trading price is available for such Capital Stock, the fair market value of the Capital Stock, as determined in good faith by the Board of Directors of the Corporation.
NYSE. The term "NYSE" shall mean the New York Stock Exchange.
Person. The term "Person" shall mean an individual, corporation, partnership, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a "group" as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and a group to which an Excepted Holder Limit applies.
Prohibited Owner. The term "Prohibited Owner" shall mean, with
respect to any purported Transfer, any Person who, but for the provisions of
Section 7.2.1, would Beneficially Own or Constructively Own shares of Capital
Stock in violation of the provisions of Section
7.2.1(a), and if appropriate in the context, shall also mean any Person who would have been the record owner of the shares of Capital Stock that the Prohibited Owner would have so owned.
REIT. The term "REIT" shall mean a real estate investment trust within the meaning of Section 856 of the Code.
Restriction Termination Date. The term "Restriction Termination Date" shall mean the first day after the Initial Date on which the Corporation determines pursuant to Section 5.7 of the Charter that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of shares of Capital Stock set forth herein is no longer required in order for the Corporation to qualify as a REIT.
Transfer. The term "Transfer" shall mean any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership, or any agreement to take any such actions or cause any such events, of Capital Stock or the right to vote or receive dividends on Capital Stock, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Capital Stock or any interest in Capital Stock or any exercise of any such conversion or exchange right and (c) Transfers of interests in other entities that result in changes in Beneficial or Constructive Ownership of Capital Stock; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms "Transferring" and "Transferred" shall have the correlative meanings.
Trustee. The term "Trustee" shall mean the Person unaffiliated with the Corporation and a Prohibited Owner, that is appointed by the Corporation to serve as trustee of the Charitable Trust.
Section 7.2 Capital Stock.
Section 7.2.1 Ownership Limitations. During the period commencing on the Initial Date and prior to the Restriction Termination Date:
(a) Basic Restrictions.
(i) (1) No Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Aggregate Stock Ownership Limit, (2) no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Common Stock in excess of the Common Stock Ownership Limit and (3) neither Steven B. Schnall nor any other Excepted Holder shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Excepted Holder Limit for such Excepted Holder.
(ii) Except as provided in Section 7.2.7 hereof, no Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent that such Beneficial Ownership or Constructive Ownership of Capital Stock would result in the Corporation being "closely held" within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year).
(iii) Except as provided in Section 7.2.7 hereof, notwithstanding any other provisions contained herein, no person shall Transfer shares of Capital Stock (whether or not such Transfer is the result of a transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer
quotation system) to the extent such transfer would result in the Capital Stock being beneficially owned by less than one hundred (100) Persons (determined under the principles of Section 856(a)(5) of the Code).
(iv) Except as provided in Section 7.2.7 hereof, no Disqualified Organization shall Beneficially Own any shares of Capital Stock, and no Person shall Transfer shares of Capital Stock to the extent that such Transfer would result in shares of Capital Stock being Beneficially Owned by a Disqualified Organization.
(b) Transfer in Trust. If any Transfer of shares of Capital Stock (whether or not such Transfer is the result of a transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system) occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning shares of Capital Stock in violation of Section 7.2.1(a)(i), (ii), (iii), or (iv),
(i) then that number of shares of
the Capital Stock the Beneficial or Constructive Ownership of which otherwise
would cause such Person to violate Section 7.2.1(a)(i), (ii), (iii), or (iv)
(rounded up to the nearest whole share) shall be automatically transferred to a
Charitable Trust for the benefit of a Charitable Beneficiary, as described in
Section 7.3, effective as of the close of business on the Business Day prior to
the date of such Transfer, and such Person shall acquire no rights in such
shares of Capital Stock; or
(ii) if the transfer to the Trust described in clause (i) of this sentence would not be effective for any reason to prevent the violation of Section 7.2.1(a)(i), (ii), (iii), or (iv), then the Transfer of that number of shares of Capital Stock that otherwise would
cause any Person to violate Section 7.2.1(a)(i), (ii), (iii), or (iv) shall be void ab initio, and the intended transferee shall acquire no rights in such shares of Capital Stock.
Section 7.2.2 Remedies for Breach. If the Board of Directors
of the Corporation or any duly authorized committee thereof or other designees
if permitted by the MGCL shall at any time determine in good faith that a
Transfer or other event has taken place that results in a violation of Section
7.2.1 or that a Person intends to acquire or has attempted to acquire Beneficial
or Constructive Ownership of any shares of Capital Stock in violation of Section
7.2.1 (whether or not such violation is intended), the Board of Directors or a
committee thereof or other designees if permitted by the MGCL shall take such
action as it deems advisable to refuse to give effect to or to prevent such
Transfer or other event, including, without limitation, causing the Corporation
to redeem shares of Capital Stock, refusing to give effect to such Transfer on
the books of the Corporation or instituting proceedings to enjoin such Transfer
or other event; provided, however, that any Transfers or attempted Transfers or
other events in violation of Section 7.2.1 shall automatically result in the
transfer to the Charitable Trust described above, and, where applicable, such
Transfer (or other event) shall be void ab initio as provided above irrespective
of any action (or non-action) by the Board of Directors or a committee thereof.
Section 7.2.3 Notice of Restricted Transfer. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of shares of Capital Stock that will or may violate Section 7.2.1(a) or any Person who would have owned shares of Capital Stock that resulted in a transfer to the Charitable Trust pursuant to the provisions of Section 7.2.1(b) shall immediately give written notice to the Corporation of such event, or in the case of such a proposed or attempted transaction, give at least fifteen (15) days
prior written notice, and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer on the Corporation's status as a REIT.
Section 7.2.4 Owners Required To Provide Information. From the Initial Date and prior to the Restriction Termination Date:
(a) Every owner of more than five percent (5%) (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) in value of the outstanding shares of Capital Stock, within thirty (30) days after the end of each taxable year, shall give written notice to the Corporation stating the name and address of such owner, the number of shares of Capital Stock Beneficially Owned and a description of the manner in which such shares are held. Each such owner shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation's status as a REIT and to ensure compliance with the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit; and
(b) Each Person who is a Beneficial or Constructive Owner of Capital Stock and each Person (including the stockholder of record) who is holding Capital Stock for a Beneficial or Constructive Owner shall provide to the Corporation such information as the Corporation may request, in good faith, in order to determine the Corporation's status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance and to ensure compliance with the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit.
Section 7.2.5 Remedies Not Limited. Subject to Section 5.7 of the Charter, nothing contained in this Section 7.2 shall limit the authority of the Board of Directors
of the Corporation to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders in preserving the Corporation's status as a REIT.
Section 7.2.6 Ambiguity. In the case of an ambiguity in the
application of any of the provisions of this Section 7.2, Section 7.3, or any
definition contained in Section 7.1, the Board of Directors of the Corporation
shall have the power to determine the application of the provisions of this
Section 7.2 or Section 7.3 or any such definition with respect to any situation
based on the facts known to it. In the event Section 7.2 or 7.3 requires an
action by the Board of Directors and the Charter fails to provide specific
guidance with respect to such action, the Board of Directors shall have the
power to determine the action to be taken so long as such action is not contrary
to the provisions of Sections 7.1, 7.2 or 7.3.
Section 7.2.7 Exceptions.
(a) The Board of Directors of the Corporation, in its sole discretion, may exempt (prospectively or retroactively) a Person from the Aggregate Stock Ownership Limit, the Common Stock Ownership Limit and/or the restrictions contained in Section 7.2.1(a)(ii), or (iii), as the case may be, and may establish or increase an Excepted Holder Limit for such Person if the Board of Directors obtains such representations, covenants and undertakings as the Board of Directors may deem appropriate in order to conclude that granting the exemption and/or establishing or increasing the Excepted Holder Limit, as the case may be, will not cause the Corporation to lose its status as a REIT.
The Board of Directors, in its sole discretion, may exempt a Disqualified Organization from the restriction contained in Section 7.2.1(a)(iv) if either (i) the Disqualified Organization agrees to reimburse the Corporation for any tax it incurs as a result of having such Disqualified Organization as a stockholder and to make the Corporation whole for
any tax imposed on the reimbursement payment, (ii) each of the following requirements is met: (A) the record holder of the shares of Capital Stock Beneficially Owned by the Disqualified Organization is a nominee of such Disqualified Organization, (B) the nominee is not itself a Disqualified Organization, (C) the nominee agrees not to transfer record ownership of such shares of Capital Stock to a Disqualified Organization, and (D) the Board of Directors obtains such representations and undertakings from such Disqualified Organization and nominee as are reasonably necessary to ascertain the foregoing, or (iii) the Corporation receives a ruling from the Internal Revenue Service or an opinion of counsel in each case to the effect that a tax will not be imposed on the Corporation as a result of the exemption.
(b) Prior to granting any exception pursuant to
Section 7.2.7(a), the Board of Directors of the Corporation may require a ruling
from the Internal Revenue Service, or an opinion of counsel, in either case in
form and substance satisfactory to the Board of Directors in its sole
discretion, as it may deem necessary or advisable in order to determine or
ensure the Corporation's status as a REIT. Notwithstanding the receipt of any
ruling or opinion, the Board of Directors may impose such conditions or
restrictions as it deems appropriate in connection with granting such exception.
(c) Subject to Section 7.2.1.(a)(ii), an underwriter or placement agent that participates in a public offering or a private placement of Capital Stock (or securities convertible into or exchangeable for Capital Stock) may Beneficially Own or Constructively Own shares of Capital Stock (or securities convertible into or exchangeable for Capital Stock) in excess of the Aggregate Stock Ownership Limit, the Common Stock Ownership Limit, or both such limits, but only to the extent necessary to facilitate such public offering or private placement and provided that the restrictions contained in Section 7.2.1(a) will not be violated
following the distribution by such underwriter or placement agent of such shares of Capital Stock.
Section 7.2.8 Change in Aggregate Stock Ownership Limit, Common Stock Ownership Limit, and Excepted Holder Limit for Steven B. Schnall. The Board of Directors may from time to time increase or decrease the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit; provided, however, that a decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit will not be effective for any Person whose percentage ownership of Capital Stock is in excess of such decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit until such time as such Person's percentage of Capital Stock equals or falls below the decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit, but until such time as such Person's percentage of Capital Stock falls below such decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit, any further acquisition of Capital Stock will be in violation of the Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit and, provided further, that the new Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit would not allow five or fewer Persons (taking into account all Excepted Holders) to Beneficially Own more than 49.9% in value of the outstanding Capital Stock.
If at any time Steven B. Schnall's ownership of the Common Stock falls to or below nine and nine-tenths percent (9.9%) in value and in number of the outstanding shares of Common Stock, then, at all times after such decrease in Steven B. Schnall's ownership of the Common Stock, (i) the Common Stock Ownership Limit shall be increased to nine and nine-tenths percent (9.9%) in value or in number of shares, whichever is more restrictive, of the outstanding shares of Common Stock, (ii) the Aggregate Stock Ownership Limit shall be
increased to nine and nine-tenths percent (9.9%) in value of the aggregate of the outstanding shares of Capital Stock, and (iii) the Excepted Holder Limit for Steven B. Schnall shall no longer apply and Mr. Schnall shall be subject to the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit.
Section 7.2.9 Legend. Each certificate for shares of Capital Stock shall bear substantially the following legend:
The shares represented by this certificate are subject to
restrictions on Beneficial and Constructive Ownership and
Transfer. Subject to certain further restrictions and except
as expressly provided in the Corporation's Charter, (i) no
Person may Beneficially or Constructively Own shares of the
Corporation's Common Stock in excess of nine and four-tenths
percent (9.4%) in value or in number of shares, whichever is
more restrictive, of the aggregate of the outstanding shares
of Common Stock of the Corporation unless such Person is an
Excepted Holder (in which case the Excepted Holder Limit shall
be applicable); (ii) no Person may Beneficially or
Constructively Own shares of Capital Stock of the Corporation
in excess of nine and four-tenths percent (9.4%) in value of
the aggregate of the outstanding shares of Capital Stock of
the Corporation unless such Person is an Excepted Holder (in
which case the Excepted Holder Limit shall be applicable);
(iii) no Person may Beneficially or Constructively Own shares
of Capital Stock that would result in the Corporation being
"closely held" under Section 856(h) of the Internal Revenue
Code of 1986, as amended (the "Code"); (iv) no Person may
Transfer shares of Capital Stock that would result in the
Capital Stock of the Corporation being beneficially owned by
less than one hundred (100) Persons (determined without
reference to any rules of attribution) and (v) no Disqualified
Organization shall Beneficially Own any shares of Capital
Stock, and no Person shall Transfer shares of Capital Stock to
the extent that such Transfer would result in shares of
Capital Stock being Beneficially Owned by a Disqualified
Organization. Any Person who Beneficially or Constructively
Owns or attempts to Beneficially or Constructively Own shares
of Capital Stock which causes or will cause a Person to
Beneficially or Constructively Own shares of Capital Stock in
excess or in violation of the above limitations must
immediately notify the Corporation. If any of the restrictions
on transfer or ownership are violated, the shares of Capital
Stock represented hereby will be automatically transferred to
a Trustee of a
Charitable Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may redeem shares upon the terms and conditions specified by the Board of Directors in its sole discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio. All capitalized terms in this legend have the meanings defined in the Charter of the Corporation, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Capital Stock of the Corporation on request and without charge. Requests for such a copy may be directed to the Secretary of the Corporation at its principal office.
Instead of the foregoing legend, the certificate may state that the Corporation will furnish a full statement about certain restrictions on transferability to a stockholder on request and without charge.
Section 7.3 Transfer of Capital Stock in Trust.
Section 7.3.1 Ownership in Trust. Upon any purported Transfer or other event described in Section 7.2.1(b) that would result in a transfer of shares of Capital Stock to a Charitable Trust, such shares of Capital Stock shall be deemed to have been transferred to the Trustee as trustee for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the transfer to the Charitable Trust pursuant to Section 7.2.1(b). The Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Corporation as provided in Section 7.3.6.
Section 7.3.2 Status of Shares Held by the Trustee. Shares of Capital Stock held by the Trustee shall continue to be issued and outstanding shares of Capital Stock of the Corporation. The Prohibited Owner shall have no rights in the Capital Stock held by the
Trustee. The Prohibited Owner shall not benefit economically from ownership of any shares held in trust by the Trustee, shall have no rights to dividends or other distributions and shall not possess any rights to vote or other rights attributable to the shares held in the Trust.
Section 7.3.3 Dividend and Voting Rights. The Trustee shall have all voting rights and rights to dividends or other distributions with respect to shares of Capital Stock held in the Charitable Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other distribution paid to a Prohibited Owner prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trustee shall be paid with respect to such shares of Capital Stock by the Prohibited Owner to the Trustee upon demand and any dividend or other distribution authorized but unpaid shall be paid when due to the Trustee. Any dividends or distributions so paid over to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to shares held in the Charitable Trust and, subject to Maryland law, effective as of the date that the shares of Capital Stock have been transferred to the Trustee, the Trustee shall have the authority (at the Trustee's sole discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article VII, until the Corporation has received notification that shares of Capital Stock have been transferred into a Charitable Trust, the Corporation shall be entitled to rely on its share transfer and other
stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.
Section 7.3.4 Sale of Shares by Trustee. Within twenty (20) days of receiving notice from the Corporation that shares of Capital Stock have been transferred to the Charitable Trust, the Trustee of the Charitable Trust shall sell the shares held in the Charitable Trust to a person, designated by the Trustee, whose ownership of the shares will not violate the ownership limitations set forth in Section 7.2.1(a). Upon such sale, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 7.3.4. The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the shares or, if the Prohibited Owner did not give value for the shares in connection with the event causing the shares to be held in the Charitable Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of the shares on the day of the event causing the shares to be held in the Charitable Trust and (2) the price per share received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares held in the Charitable Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and distributions paid to the Prohibited Owner and owed by the Prohibited Owner to the Trustee pursuant to Section 7.3.3 of this Article VII. Any net sales proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Corporation that shares of Capital Stock have been transferred to the Trustee, such shares are sold by a Prohibited Owner, then (i) such shares shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such shares that exceeds the amount that such
Prohibited Owner was entitled to receive pursuant to this Section 7.3.4, such excess shall be paid to the Trustee upon demand.
Section 7.3.5 Purchase Right in Stock Transferred to the
Trustee. Shares of Capital Stock transferred to the Trustee shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Charitable Trust (or, in the case of a devise
or gift, the Market Price at the time of such devise or gift) and (ii) the
Market Price on the date the Corporation, or its designee, accepts such offer.
The Corporation may reduce the amount payable to the Prohibited Owner by the
amount of dividends and distributions paid to the Prohibited Owner and are owed
by the Prohibited Owner to the Trustee pursuant to Section 7.3.3 of this Article
VII. The Corporation may pay the amount of such reduction to the Trustee for the
benefit of the Charitable Beneficiary. The Corporation shall have the right to
accept such offer until the Trustee has sold the shares held in the Charitable
Trust pursuant to Section 7.3.4. Upon such a sale to the Corporation, the
interest of the Charitable Beneficiary in the shares sold shall terminate and
the Trustee shall distribute the net proceeds of the sale to the Prohibited
Owner and any dividends or other distributions held by the Trustee shall be paid
to the Charitable Beneficiary.
Section 7.3.6 Designation of Charitable Beneficiaries. By written notice to the Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Charitable Trust such that (i) the shares of Capital Stock held in the Charitable Trust would not violate the restrictions set forth in Section 7.2.1(a) in the hands of such Charitable Beneficiary and (ii) each such organization must be described in
Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under one of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
Section 7.4 NYSE Transactions. Nothing in this Article VII shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate the effect of any other provision of this Article VII and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VII.
Section 7.5 Enforcement. The Corporation is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of this Article VII.
Section 7.6 Non-Waiver. No delay or failure on the part of the Corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the Board of Directors, as the case may be, except to the extent specifically waived in writing.
Section 7.7 Ambiguity. In the case of an ambiguity in the application of any of the provisions of this Article VII, including any definition contained in Section 7.1 of this Article VII, the Board of Directors shall have the power to determine the application of the provisions of this Article VII with respect to any situation based on the facts known to it.
ARTICLE VIII
AMENDMENTS
The Corporation reserves the right from time to time to make any amendment to its Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any shares of outstanding stock. All rights and powers conferred by the Charter on stockholders, directors and officers are granted
subject to this reservation. Except as otherwise provided in the Charter, any amendment to the Charter shall be valid only if approved by the affirmative vote of the holders of a majority of all the votes entitled to be cast on the matter. However, any amendment to Section 5.8, Section 6.3, Section 6.4, Article VII or to this sentence of the Charter shall be valid only if approved by the affirmative vote of the holders of two-thirds of all the votes entitled to be cast on the matter.
ARTICLE IX
LIMITATION OF LIABILITY
To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers of a corporation, no present or former director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Article IX, nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Article IX, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
THIRD: The foregoing amendment to and restatement of the Charter has been approved by a majority of the Board of Directors and approved by the stockholders of the Corporation as required by law.
FOURTH: The current address of the principal office of the Corporation is as set forth in Article IV of the foregoing amended and restated Charter.
FIFTH: The name and address of the Corporation's current resident agent is as set forth in Article IV of the foregoing amended and restated Charter.
SIXTH: The number of directors of the Corporation and the names of those currently in office are as set forth in Article V of the foregoing amended and restated Charter.
SEVENTH: The total number of shares of stock which the Corporation had authority to issue immediately prior to this amendment and restatement was 100 shares, $0.01 par value per share. The aggregate par value of all shares of stock having par value was $1.00.
EIGHTH: The total number of shares of stock which the Corporation has authority to issue pursuant to the foregoing amended and restated Charter is 600,000,000, consisting of 400,000,000 shares of Common Stock, $0.01 par value per share, and 200,000,000 shares of Preferred Stock, $.01 par value per share. The aggregate par value of all shares of stock having par value is $6,000,000.00.
NINTH: The undersigned President acknowledges these Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned President acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment and Restatement to be signed in its name and on its behalf by its President and attested to by its Secretary on this 17th day of June, 2004.
ATTEST: New York Mortgage Trust, Inc. /s/ Michael I. Wirth /s/ Raymond A. Redlingshafer, Jr. __________________________ By: _____________________________(SEAL) Michael I. Wirth Raymond A. Redlingshafer, Jr. Secretary President |
Exhibit 3.02
NEW YORK MORTGAGE TRUST, INC.
BYLAWS
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of New York Mortgage Trust, Inc. (the "Corporation") in the State of Maryland shall be located at such place as the Board of Directors may designate.
Section 2. ADDITIONAL OFFICES. The Corporation may have additional offices, including a principal executive office, at such places as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE. All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set by the Board of Directors and stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the stockholders for the election of Directors and the transaction of any business within the powers of the Corporation shall be held on a date and at the time set by the Board of Directors during the month of May of each year, beginning in 2005.
Section 3. SPECIAL MEETINGS.
(a) General. The chairman of the Board of Directors, the president, a chief executive officer or the Board of Directors may call a special meeting of the stockholders. Subject to subsection (b) of this Section 3, a special meeting of stockholders shall also be called by the secretary of the Corporation upon the written request of the stockholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting.
(b) Stockholder Requested Special Meetings. (1) Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice to the secretary of the Corporation (the "Record Date Request Notice") by registered mail, return receipt requested, request the Board of Directors to fix a record date to determine the stockholders entitled to request a special meeting (the "Request Record Date"). The Record Date Request Notice shall set forth the purpose of the meeting and the matters proposed to be acted on at it, shall be signed by one or more stockholders of record as of the date of signature (or their agents duly authorized in a writing accompanying the Record Date Request Notice), shall bear the date of signature of each such stockholder (or such agent) and shall set forth all information relating to each such
stockholder that must be disclosed in solicitations of proxies for election of Directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than ten days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within ten days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the tenth day after the first date on which the Record Date Request Notice is received by the secretary.
(2) In order for any stockholder to request a special
meeting, one or more written requests for a special meeting signed by
stockholders of record (or their agents duly authorized in a writing
accompanying the request) as of the Request Record Date entitled to cast not
less than a majority (the "Special Meeting Percentage") of all of the votes
entitled to be cast at such meeting (the "Special Meeting Request") shall be
delivered to the secretary. In addition, the Special Meeting Request (a) shall
set forth the purpose of the meeting and the matters proposed to be acted on at
it (which shall be limited to those lawful matters set forth in the Record Date
Request Notice received by the secretary), (b) shall bear the date of signature
of each such stockholder (or such agent) signing the Special Meeting Request,
(c) shall set forth the name and address, as they appear in the Corporation's
books, of each stockholder signing such request (or on whose behalf the Special
Meeting Request is signed), the class, series and number of all shares of stock
of the Corporation which are owned by each such stockholder, and the nominee
holder for, and number of, shares owned by such stockholder beneficially but not
of record, (d) shall be sent to the secretary by registered mail, return receipt
requested, and (e) shall be received by the secretary within sixty (60) days
after the Request Record Date. Any requesting stockholder (or agent duly
authorized in a writing accompanying the revocation or Special Meeting Request)
may revoke his, her or its request for a special meeting at any time by written
revocation delivered to the secretary.
(3) The secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing the notice of meeting (including the Corporation's proxy materials). The secretary shall not be required to call a special meeting upon stockholder request and such meeting shall not be held unless, in addition to the documents required by paragraph (2) of this Section 3(b), the secretary receives payment of such reasonably estimated cost prior to the preparation and mailing of any notice of the meeting.
(4) Except as provided in the next sentence, any special meeting shall be held at such place, date and time as may be designated by the president, chief executive officer or Board of Directors, whoever has called the meeting. In the case of any special meeting called by the secretary upon the request of stockholders (a "Stockholder Requested Meeting"), such meeting shall be held at such place, date and time as may be designated by the Board of Directors; provided, however, that the date of any Stockholder Requested Meeting shall be not more than ninety (90) days after the record date for such meeting (the "Meeting Record Date"); and provided further that if the Board of Directors fails to designate, within ten (10) days after the date that a valid Special Meeting Request is actually received by the secretary (the "Delivery
Date"), a date and time for a Stockholder Requested Meeting, then such meeting shall be held at 2:00 p.m. local time on the ninetieth (90th) day after the Meeting Record Date or, if such ninetieth (90th) day is not a Business Day (as defined below), on the first preceding Business Day; and provided further that in the event that the Board of Directors fails to designate a place for a Stockholder Requested Meeting within ten (10) days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In fixing a date for any special meeting, the president, chief executive officer or Board of Directors may consider such factors as he, she or it deems relevant within the good faith exercise of business judgment, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for the meeting and any plan of the Board of Directors to call an annual meeting or a special meeting. In the case of any Stockholder Requested Meeting, if the Board of Directors fails to fix a Meeting Record Date that is a date within thirty (30) days after the Delivery Date, then the close of business on the thirtieth (30th) day after the Delivery Date shall be the Meeting Record Date. The Board of Directors may revoke the notice for any Stockholder Requested Meeting in the event that the requesting stockholders fail to comply with the provisions of paragraph (3) of this Section 3(b).
(5) If written revocations of requests for the special meeting have been delivered to the secretary and the result is that stockholders of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting to the secretary, the secretary shall: (i) if the notice of meeting has not already been mailed refrain from mailing the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for the special meeting, or (ii) if the notice of meeting has been mailed and if the secretary first sends to all requesting stockholders who have not revoked requests for a special meeting written notice of any revocation of a request for the special meeting and written notice of the secretary's intention to revoke the notice of the meeting revoke the notice of the meeting at any time before ten days before the commencement of the meeting. Any request for a special meeting received after a revocation by the secretary of a notice of a meeting shall be considered a request for a new special meeting.
(6) The chairman of the Board of Directors, a chief executive officer, president or Board of Directors may appoint regionally or nationally recognized independent inspectors of elections to act as the agent of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the secretary. For the purpose of permitting the inspectors to perform such review, no such purported request shall be deemed to have been delivered to the secretary until the earlier of (i) ten (10) Business Days after receipt by the secretary of such purported request and (ii) such date as the independent inspectors certify to the Corporation that the valid requests received by the secretary represent at least a majority of the issued and outstanding shares of stock that would be entitled to vote at such meeting. Nothing contained in this paragraph (6) shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such ten (10) Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).
(7) For purposes of these Bylaws, "Business Day" shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in New York are authorized or obligated by law or executive order to close.
(8) Unless requested by the stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting, no Stockholder Requested Meeting shall be called to consider any matter which is substantially the same as a matter voted on at any meeting of stockholders held during the preceding twelve (12) months.
Section 4. NOTICE. Not less than ten (10) nor more than ninety (90) days before each meeting of stockholders, the secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting written or printed notice stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, either by mail, by presenting it to such stockholder personally, by leaving it at the stockholder's residence or usual place of business or by any other means permitted by Maryland law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder's address as it appears on the records of the Corporation, with postage thereon prepaid.
Subject to Section 11(a) of this Article II, any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice.
Section 5. ORGANIZATION AND CONDUCT. Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment, by the chairman of the Board of Directors or, in the case of a vacancy in the office or absence of the chairman of the Board of Directors, by one of the following officers present at the meeting: the vice chairman of the Board of Directors, if there be one, the president, the vice presidents in their order of rank and seniority, or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary, or, in the secretary's absence, an assistant secretary, or in the absence of both the secretary and assistant secretaries, an individual appointed by the Board of Directors or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary. In the event that the secretary presides at a meeting of the stockholders, an assistant secretary, or in the absence of an assistant secretary, an individual appointed by the Board of Directors or the Chairman of the meeting, shall record the minutes of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of such chairman, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to stockholders of record of the Corporation, their duly authorized proxies or other such individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to stockholders of
record of the Corporation entitled to vote on such matter, their duly authorized
proxies and other such individuals as the chairman of the meeting may determine;
(d) limiting the time allotted to questions or comments by participants; (e)
determining when the polls should be opened and closed, (f) maintaining order
and security at the meeting; (g) removing any stockholder or any other
individual who refuses to comply with meeting procedures, rules or guidelines as
set forth by the chairman of the meeting; and (h) concluding the meeting or
recessing or adjourning the meeting to a later date and time and place announced
at the meeting. Unless otherwise determined by the chairman of the meeting,
meetings of stockholders shall not be required to be held in accordance with the
rules of parliamentary procedure.
Section 6. QUORUM. At any meeting of stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute or the charter of the Corporation (the "Charter") for the vote necessary for the adoption of any measure. If, however, such quorum shall not be present at any meeting of the stockholders, the chairman of the meeting shall have the power to adjourn the meeting from time to time to a date not more than one hundred twenty (120) days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.
The stockholders present either in person or by proxy, at a meeting which has been duly called and convened, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
Section 7. VOTING. A plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to elect a director. Each share may be voted for as many individuals as there are Directors to be elected and for whose election the share is entitled to be voted. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Charter. Unless otherwise provided by statute or by the Charter, each outstanding share of stock, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.
Section 8. PROXIES. A stockholder may cast the votes entitled to be cast by the shares of stock owned of record by the stockholder in person or by proxy executed by the stockholder or by the stockholder's duly authorized agent in any manner permitted by law. Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Corporation before or at the meeting. No proxy shall be valid more than eleven months after its date, unless otherwise provided in the proxy.
Section 9. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of stock of the Corporation registered in the name of a corporation, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, a general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such shares pursuant to a bylaw or a
resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such shares. Any director or fiduciary may vote shares of stock registered in his or her name as such fiduciary, either in person or by proxy.
Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.
The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date or closing of the stock transfer books, the time after the record date or closing of the stock transfer books within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the stockholder of record of the specified shares of stock in place of the stockholder who makes the certification.
Section 10. INSPECTORS. The Board of Directors, in advance of any meeting, may, but need not, appoint one or more individual inspectors or one or more entities that designate individuals as inspectors to act at the meeting or any adjournment thereof. If an inspector or inspectors are not appointed, the individual presiding at the meeting may, but need not, appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the chairman of the meeting. The inspectors, if any, shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. Each such report shall be in writing and signed by him or her or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.
Section 11. ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER PROPOSALS BY STOCKHOLDERS.
(a) Annual Meetings of Stockholders. Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders
may be made at an annual meeting of stockholders (i) pursuant to the Corporation's notice of meeting, (ii) by or at the direction of the Board of Directors or by any stockholder of the Corporation who was a stockholder of record both at the time of giving of notice by the stockholder provided for in this Section 11(a) and at the time of the annual meeting, who is entitled to vote at the meeting and who has complied with this Section 11(a).
(2) For nominations for election to the Board of Directors or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 11, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder's notice shall set forth all information required under this Section 11 and shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the one-hundred twentieth (120th) day nor later than 5 p.m., Eastern Time, on the ninetieth (90th) day prior to the first (1st) anniversary of the date of mailing of the notice for the preceding year's annual meeting; provided, however, that in the event that the date of the mailing of the notice for the annual meeting is advanced or delayed by more than thirty (30) days from the first (1st) anniversary of the date of the mailing of the notice for the preceding year's annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the one hundred twentieth (120th) day prior to the date of mailing of the notice for such annual meeting and not later than the later of the ninetieth (90th) day prior to the first anniversary of the date of mailing of the notice for such annual meeting or the tenth (10th) day following the day on which public announcement of the date of mailing of the notice for such meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (i) as to each individual whom the stockholder proposes to nominate for election or reelection as a director (A) the name, age, business address and residence address of such individual, (B) the class, series and number of any shares of stock of the Corporation that are beneficially owned by such individual, (C) the date such shares were acquired and the investment intent of such acquisition and (D) all other information relating to such individual that is required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act of 1934 and the rules and regulations promulgated thereunder (the "Exchange Act") (including such individual's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); as to any other business that the stockholder proposes to bring before the meeting, a description of such business, the reasons for proposing such business at the meeting and any material interest in such business of such stockholder and any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder and the Stockholder Associated Person therefrom, as to the stockholder giving the notice and Stockholder Associated Person, the class, series and number of all shares of stock of the Corporation which are owned by such stockholder and by such Stockholder Associated Person, if any, and the nominee holder for, and number of, shares owned beneficially but not of record by such stockholder and by any such Stockholder Associated Person; (iv) as to the stockholder giving the notice and any Stockholder Associated Person covered by clauses (ii) or (iii) of this paragraph (2) of this Section 11(a), the name and address of such stockholder, as they appear on the Corporation's stock ledger and current name and address, if different, and of such Stockholder Associated Person; and (v) to the
extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business on the date of such stockholder's notice.
(3) Notwithstanding anything in this subsection (a) of this Section 11 to the contrary, in the event the Board of Directors increases or decreases the maximum or minimum number of directors in accordance with Article III, Section 2 of these Bylaws, and there is no public announcement of such action at least one hundred (100) days prior to the first (1st) anniversary of the date of mailing of the notice of the preceding year's annual meeting, a stockholder's notice required by this Section 11(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if the notice is delivered to the secretary at the principal executive office of the Corporation not later than the 5:00 p.m., Eastern Time, on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.
(4) For purposes of this Section 11, "Stockholder Associated Person" of any stockholder shall mean (i) any person controlling, directly or indirectly, or acting in concert with, such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder and (iii) any person controlling, controlled by or under common control with such Stockholder Associated Person.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
individuals for election to the Board of Directors may be made at a special
meeting of stockholders at which Directors are to be elected (i) pursuant to the
Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) provided that the Board of Directors has determined that
Directors shall be elected at such special meeting, by any stockholder of the
Corporation who is a stockholder of record both at the time of giving of notice
provided for in this Section 11 and at the time of the special meeting, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth in this Section 11. In the event the Corporation calls a special meeting
of stockholders for the purpose of electing one or more individuals to the Board
of Directors, any such stockholder may nominate an individual or individuals (as
the case may be) for election as a Director as specified in the Corporation's
notice of meeting, if the stockholder's notice required by paragraph (2) of this
Section 11(a) shall be delivered to the secretary at the principal executive
office of the Corporation not earlier than 5:00 p.m., Eastern Time, on the one
hundred twentieth (120th) day prior to such special meeting and not later than
the close of business on the later of the ninetieth (90th) day prior to such
special meeting or the tenth (10th) day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. The
public announcement of a postponement or adjournment of a special meeting shall
not commence a new time period for the giving of a stockholder's notice as
described above.
(c) General. (1) Upon written request by the secretary or the Board of Directors or any committee thereof, any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall provide, within five (5) Business Days of delivery of such request (or such other period as may be specified in such request),
written verification, satisfactory, in the discretion of the Board of Directors or any committee thereof or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 11. If a stockholder fails to provide such written verification within such period, the information as to which written verification was requested may be deemed not to have been provided in accordance with this Section 11.
(2) Only such individuals who are nominated in accordance
with this Section 11 shall be eligible for election by stockholders as
Directors, and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
this Section 11. The chairman of the meeting shall have the power to determine
whether a nomination or any other business proposed to be brought before the
meeting was made or proposed, as the case may be, in accordance with this
Section 11.
(3) For purposes of this Section 11, (a) the "date of mailing of the notice" shall mean the date of the proxy statement for the solicitation of proxies for election of Directors and (b) "public announcement" shall mean disclosure (i) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or comparable news service or (ii) in a document publicly filed by the Corporation with the United States Securities and Exchange Commission pursuant to the Exchange Act.
(4) Notwithstanding the foregoing provisions of this
Section 11, a stockholder shall also comply with all applicable requirements of
state law and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 11. Nothing in this Section 11
shall be deemed to affect any right of a stockholder to request inclusion of a
proposal in, nor the right of the Corporation to omit a proposal from, the
Corporation's proxy statement pursuant to Rule 14a-8 (or any successor
provision) under the Exchange Act.
Section 12. VOTING BY BALLOT. Voting on any question or in any election may be viva voce unless the presiding officer shall order or any stockholder shall demand that voting be by ballot.
Section 13. CONTROL SHARE ACQUISITION ACT. Notwithstanding any other provision of the Charter or these Bylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law (the "MGCL") (or any successor statute) shall not apply to any acquisition by any person of shares of stock of the Corporation. This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any subsequent control share acquisition.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.
Section 2. NUMBER, TENURE AND QUALIFICATIONS. At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Directors may
establish, increase or decrease the number of directors, provided that the number thereof shall never be less than the minimum number required by the MGCL, nor more than fifteen (15), and further provided that the tenure of office of a director shall not be affected by any decrease in the number of directors.
Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of Directors shall be held immediately after and at the same place as the annual meeting of stockholders, no notice other than this Bylaw being necessary. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. The Board of Directors may provide, by resolution, the time and place for the holding of regular meetings of the Board of Directors without other notice than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the chairman of the Board of Directors, the chief executive officer, the president or by a majority of the Directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place as the place for holding any special meeting of the Board of Directors called by them. The Board of Directors may provide, by resolution, the time and place for the holding of special meetings of the Board of Directors without other notice than such resolution.
Section 5. NOTICE. Notice of any special meeting of the Board of
Directors shall be delivered personally or by telephone, electronic mail,
facsimile transmission, United States mail or courier to each director at his or
her business or residence address. Notice by personal delivery, telephone,
electronic mail or facsimile transmission shall be given at least twenty four
(24) hours prior to the meeting. Notice by United States mail shall be given at
least three (3) days prior to the meeting. Notice by courier shall be given at
least two (2) days prior to the meeting. Telephone notice shall be deemed to be
given when the director or his or her agent is personally given such notice in a
telephone call to which the director or his or her agent is a party. Electronic
mail notice shall be deemed to be given upon transmission of the message to the
electronic mail address given to the Corporation by the director. Facsimile
transmission notice shall be deemed to be given upon completion of the
transmission of the message to the number given to the Corporation by the
director and receipt of a completed answer-back indicating receipt. Notice by
United States mail shall be deemed to be given when deposited in the United
States mail properly addressed, with postage thereon prepaid. Notice by courier
shall be deemed to be given when deposited with or delivered to a courier
properly addressed. Neither the business to be transacted at, nor the purpose
of, any annual, regular or special meeting of the Board of Directors need be
stated in the notice, unless specifically required by statute or these Bylaws.
Section 6. QUORUM. A majority of the Directors shall constitute a quorum for transaction of business at any meeting of the Board of Directors, provided that, if less than a majority of such Directors are present at said meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority of a particular group of Directors is required for action, a quorum must also include a majority of such group.
The Directors present at a meeting which has been duly called and convened may continue to transact business until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum.
Section 7. VOTING. The action of the majority of the Directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws. If enough Directors have withdrawn from a meeting to leave less than a quorum but the meeting is not adjourned, the action of the majority of that number of Directors necessary to constitute a quorum at such meeting shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws.
Section 8. ORGANIZATION. At each meeting of the Board of Directors, the chairman of the Board of Directors or, in the absence of the chairman, the vice chairman of the Board of Directors, if any, shall act as chairman of the meeting. In the absence of both the chairman and vice chairman of the Board of Directors, the chief executive officer or in the absence of the chief executive officer, the president or in the absence of the president, a director chosen by a majority of the Directors present, shall act as chairman or the meeting. The secretary or, in his or her absence, an assistant secretary of the Corporation, or in the absence of the secretary and all assistant secretaries, a person appointed by the Chairman, shall act as secretary of the meeting.
Section 9. TELEPHONE MEETINGS. Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 10. CONSENT BY DIRECTORS WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each director and is filed with the minutes of proceedings of the Board of Directors.
Section 11. VACANCIES. If for any reason any or all the Directors cease to be Directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining Directors hereunder (even if fewer than three Directors remain). Except as may be provided by the Board of Directors in setting the terms of any class or series of preferred stock, any vacancy on the Board of Directors may be filled only by a majority of the remaining Directors, even if the remaining Directors do not constitute a quorum. Any director elected to fill a vacancy shall serve for the remainder of the full term of the class in which the vacancy occurred and until a successor is elected and qualifies.
Section 12. COMPENSATION. Directors shall not receive any stated salary for their services as Directors but, by resolution of the Directors, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned, leased or to be acquired by the Corporation and for any service or activity they performed or engaged in as Directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Directors or of any committee thereof and for their expenses, if
any, in connection with each property visit and any other service or activity they performed or engaged in as Directors; but nothing herein contained shall be construed to preclude any Directors from serving the Corporation in any other capacity and receiving compensation therefor.
Section 13. LOSS OF DEPOSITS. No director shall be liable for any loss which may occur by reason of the failure of the bank, trust company, savings and loan association, or other institution with whom moneys or shares of stock have been deposited.
Section 14. SURETY BONDS. Unless required by law, no director shall be obligated to give any bond or surety or other security for the performance of any of his or her duties.
Section 15. RELIANCE. Each director, officer, employee and agent of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be fully justified and protected with regard to any act or failure to act in reliance in good faith upon the books of account or other records of the Corporation, upon an opinion of counsel or upon reports made to the Corporation by any of its officers or employees or by the adviser, accountants, appraisers or other experts or consultants selected by the Board of Directors or officers of the Corporation, regardless of whether such counsel or expert may also be a director.
Section 16. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS. The Directors shall have no responsibility to devote their full time to the affairs of the Corporation. Any director or officer, employee or agent of the Corporation, in his or her personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to or in addition to or in competition with those of or relating to the Corporation.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may appoint from among its members an Executive Committee, an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and such other committees as the Board of Director may deem appropriate, composed of one or more Directors, to serve at the pleasure of the Board of Directors.
Section 2. POWERS. The Board of Directors may delegate to committees appointed under Section 1 of this Article any of the powers of the Board of Directors, except as prohibited by law.
Section 3. MEETINGS. Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors.
A majority of the members of any committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or, in the absence of such chairman, any two
members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board shall otherwise provide. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another Director to act in the place of such absent member.
Each committee shall keep minutes of its proceedings.
Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 5. CONSENT BY COMMITTEES WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each member of the committee and is filed with the minutes of proceedings of such committee.
Section 6. VACANCIES. Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to fill all vacancies, to designate alternate members to replace any absent or disqualified member or to dissolve any such committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Corporation shall include a president, a secretary and a treasurer and may include a chairman of the Board of Directors, a vice chairman of the Board of Directors, a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, one or more assistant secretaries and one or more assistant treasurers. In addition, the Board of Directors may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The officers of the Corporation shall be elected annually by the Board of Directors, except that the chief executive officer or president may from time to time appoint one or more vice presidents, assistant secretaries and assistant treasurers or other officers. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the Corporation may be removed, with or without cause, by the Board of Directors if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by giving written notice of his or her resignation to the Board of
Directors, the chairman of the Board of Directors, the president or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the notice of resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.
Section 3. VACANCIES. A vacancy in any office may be filled by the Board of Directors for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate one or more chief executive officers. In the event that the Board of Directors designates more than one chief executive officer, such chief executive officers shall be designated as co-chief executive officers. In the absence of such designation, the chairman of the Board of Directors shall be the chief executive officer of the Corporation. The chief executive officer(s) shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time.
Section 5. CHIEF OPERATING OFFICER. The Board of Directors may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.
Section 6. CHIEF INVESTMENT OFFICER. The Board of Directors may designate a chief investment officer. The chief investment officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.
Section 7. CHIEF FINANCIAL OFFICER. The Board of Directors may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.
Section 8. CHAIRMAN OF THE BOARD. The Board of Directors shall designate a chairman of the Board of Directors. The chairman of the Board of Directors shall preside over the meetings of the Board of Directors and of the stockholders at which he shall be present. The chairman of the Board of Directors shall perform such other duties as may be assigned to him or her by the Board of Directors.
Section 9. PRESIDENT. In the absence of a chief executive officer, the president shall in general supervise and control all of the business and affairs of the Corporation. In the absence of a designation of a chief operating officer by the Board of Directors, the president shall be the chief operating officer.
Section 10. VICE PRESIDENTS. In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president,
the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by the president or by the Board of Directors. The Board of Directors may designate one or more vice presidents as executive vice president, senior vice president or as vice president for particular areas of responsibility.
Section 11. SECRETARY. The secretary shall (a) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation, if any; (d) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e) have general charge of the stock transfer books of the Corporation; and (f) in general perform such other duties as from time to time may be assigned to him by the chief executive officer, the president or by the Board of Directors.
Section 12. TREASURER. The treasurer shall have the custody of the funds and securities of the Corporation and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. In the absence of a designation of a chief financial officer by the Board of Directors, the treasurer shall be the chief financial officer of the Corporation.
The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and Board of Directors, at the regular meetings of the Board of Directors or whenever it may so require, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.
If required by the Board of Directors, the treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, moneys and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.
Section 13. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the president or the Board of Directors. The assistant treasurers shall, if required by the Board of Directors, give bonds for the faithful performance of their duties in such sums and with such surety or sureties as shall be satisfactory to the Board of Directors.
Section 14. SALARIES. The salaries and other compensation of the officers shall be fixed from time to time by the Board of Directors or a committee thereof and no officer shall be
prevented from receiving such salary or other compensation by reason of the fact that he is also a director.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Board of Directors, the Executive Committee or another committee of the Board of Directors within the scope of its delegated authority, may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Corporation when duly authorized or ratified by action of the Board of Directors, or the Executive Committee or such other committee and executed by an authorized person.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.
Section 3. DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may designate.
ARTICLE VII
STOCK
Section 1. CERTIFICATES. Except as otherwise provided in these Bylaws, this Section shall not be interpreted to limit the authority of the Board of Directors to issue some or all of the shares of any or all of the Corporation's classes or series without certificates. Each stockholder, upon written request to the secretary of the Corporation, shall be entitled to a certificate or certificates which shall represent and certify the number of shares of each class of stock held by him in the Corporation. Each certificate shall be signed by the chairman of the board, the president or a vice president and countersigned by the secretary or an assistant secretary or the treasurer or an assistant treasurer and may be sealed with the seal, if any, of the Corporation. The signatures may be either manual or facsimile. Certificates shall be consecutively numbered; and if the Corporation shall, from time to time, issue several classes of stock, each class may have its own number series. A certificate is valid and may be issued whether or not an officer who signed it is still an officer when it is issued. Each certificate representing shares which are restricted as to their transferability or voting powers, which are preferred or limited as to their dividends or as to their allocable portion of the assets upon liquidation or which are redeemable at the option of the Corporation, shall have a statement of such restriction, limitation, preference or redemption provision, or a summary thereof, plainly stated on the certificate. If the Corporation has authority to issue stock of more than one class, the certificate shall contain on the face or back a full statement or summary of the designations
and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of each class of stock and, if the Corporation is authorized to issue any preferred or special class in series, the differences in the relative rights and preferences between the shares of each series to the extent they have been set and the authority of the Board of Directors to set the relative rights and preferences of subsequent series. In lieu of such statement or summary, the certificate may state that the Corporation will furnish a full statement of such information to any stockholder upon request and without charge. If any class of stock is restricted by the Corporation as to transferability, the certificate shall contain a full statement of the restriction or state that the Corporation will furnish information about the restrictions to the stockholder on request and without charge.
Section 2. TRANSFERS. Upon surrender to the Corporation or the transfer agent of the Corporation of a stock certificate duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Maryland.
Notwithstanding the foregoing, transfers of shares of any class of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board of Directors may direct a new certificate to be issued in place of any certificate previously issued by the Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing the issuance of a new certificate, an officer designated by the Board of Directors may, in his or her discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or the owner's legal representative to advertise the same in such manner as he or she shall require and/or to give bond, with sufficient surety, to the Corporation to indemnify it against any loss or claim which may arise as a result of the issuance of a new certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than ninety (90) days and, in the case of a meeting of stockholders, not less than ten (10) days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.
In lieu of fixing a record date, the Board of Directors may provide that the stock transfer books shall be closed for a stated period but not longer than twenty (20) days. If the stock transfer books are closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least ten (10) days before the date of such meeting.
If no record date is fixed and the stock transfer books are not closed for the determination of stockholders, (a) the record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day on which the notice of meeting is mailed or the thirtieth (30th) day before the meeting, whichever is the closer date to the meeting; and (b) the record date for the determination of stockholders entitled to receive payment of a dividend or an allotment of any other rights shall be the close of business on the day on which the resolution of the Directors, declaring the dividend or allotment of rights, is adopted.
When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof, except when (i) the determination has been made through the closing of the transfer books and the stated period of closing has expired or (ii) the meeting is adjourned to a date more than 120 days after the record date fixed for the original meeting, in either of which case a new record date shall be determined as set forth herein.
Section 5. STOCK LEDGER. The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate stock ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.
Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors may issue fractional stock or provide for the issuance of scrip, all on such terms and under such conditions as they may determine. Notwithstanding any other provision of the Charter or these Bylaws, the Board of Directors may issue units consisting of different securities of the Corporation. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Corporation, except that the Board of Directors may provide that for a specified period securities of the Corporation issued in such unit may be transferred on the books of the Corporation only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon the stock of the Corporation may be authorized by the Board of Directors, subject to the provisions of law and the Charter. Dividends and other distributions may be paid in cash, property or shares of stock of the Corporation, subject to the provisions of law and the Charter.
Section 2. CONTINGENCIES. Before payment of any dividends or other distributions, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends or other distributions, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine to be in the best interest of the Corporation, and the Board of Directors may modify or abolish any such reserve.
ARTICLE X
INVESTMENT POLICIES
Subject to the provisions of the Charter, the Board of Directors may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Corporation as it shall deem appropriate in its sole discretion.
ARTICLE XI
PROHIBITED INVESTMENTS AND ACTIVITIES
Notwithstanding anything to the contrary in the Charter, the
Corporation shall not enter into any transaction referred to in (i), (ii) or
(iii) below which it does not believe is in the best interests of the
Corporation, and will not, without the approval of a majority of the
disinterested Directors, acquire from or sell to any Director, officer or
employee of the Corporation, any corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in which a Director, officer or
employee of the Corporation owns more than a 5% interest or any affiliate of any
of the foregoing, any of the assets or other property of the Corporation, except
for the acquisition directly or indirectly of certain properties or interest
therein, directly or indirectly, through entities in which it owns an interest
in connection with the initial public offering of shares by the Corporation or
pursuant to agreements entered into in connection with such offering, which
properties shall be described in the prospectus relating to such initial public
offering, make any loan to or borrow from any of the foregoing persons or engage
in any other transaction with any of the foregoing persons. Each such
transaction will be in all respects on such terms as are, at the time of the
transaction and under the circumstances then prevailing, fair and reasonable to
the Corporation. Subject to the provisions of the Charter, the Board of
Directors may from time to time adopt, amend, revise or terminate any policy or
policies with respect to investments by the Corporation as it shall deem
appropriate in its sole discretion.
ARTICLE XII
SEAL
Section 1. SEAL. The Board of Directors may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation. The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word "(SEAL)" adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.
ARTICLE XIII
INDEMNIFICATION AND ADVANCE OF EXPENSES
To the maximum extent permitted by Maryland law in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
any individual who is a present or former director or officer of the Corporation
and who is made or threatened to be made a party to the proceeding by reason of
his or her service in that capacity or any individual who, while a director or
officer of the Corporation and at the request of the Corporation, serves or has
served as a director, officer, partner or trustee of such corporation, real
estate investment trust, partnership, joint venture, trust, employee benefit
plan or other enterprise and who is made or threatened to be made a party to the
proceeding by reason of his or her service in that capacity. The Corporation
may, with the approval of its Board of Directors, or a duly authorized committee
thereof, provide such indemnification and advance for expenses to a person who
served a predecessor of the Corporation in any of the capacities described in
(a) or (b) above and to any employee or agent of the Corporation or a
predecessor of the Corporation. The indemnification and payment of expenses
provided in these Bylaws shall not be deemed exclusive of or limit in any way
other rights to which any person seeking indemnification or payment of expenses
may be or may become entitled under any bylaw, regulation, insurance, agreement
or otherwise.
Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Bylaws or Charter inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
ARTICLE XIV
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE XV
AMENDMENT OF BYLAWS
The Board of Directors shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.
Exhibit 4.01
COMMON STOCK COMMON STOCK
NUMBER [LOGO OF EAGLE] SHARES
NTR
CUSIP 649604 10 5
SEE REVERSE FOR
CERTAIN DEFINITIONS
NEW YORK MORTGAGE TRUST, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
THIS CERTIFIES THAT NYMT
NEW
YORK
MORTGAGE
TRUST
is the record holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK,
$0.01 PAR VALUE PER SHARE, OF
|
NEW YORK MORTGAGE TRUST, INC.
transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
DATED
NTR /s/ MICHAEL I. WIRTH
LISTED EXECUTIVE VICE PRESIDENT,
NYSE CHIEF FINANCIAL OFFICER /s/ STEVEN B. SCHNALL
AND SECRETARY CO-CHIEF EXECUTIVE OFFICER
[NEW YORK MORTGAGE TRUST SEAL]
|
COUNTERSIGNED AND REGISTERED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
(New York, New York)
Transfer Agent
and Registrar
By
Authorized Signature
NEW YORK MORTGAGE TRUST, INC.
IMPORTANT NOTICE
The Corporation will furnish to any stockholder, on request and without
charge, a full statement of the information required by Section 2-211(b) of the
Corporations and Associations Article of the Annotated Code of Maryland with
respect to the designations and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications, and terms and conditions of redemption of the
stock of each class which the Corporation has authority to issue and, if the
Corporation is authorized to issue any preferred or special class in series,
(i) the differences in the relative rights and preferences between the shares
of each series to the extent set, and (ii) the authority of the Board of
Directors to set such rights and preferences of subsequent series. The
foregoing summary does not purport to be complete and is subject to and
qualified in its entirety by reference to the charter of the Corporation (the
"Charter"), a copy of which will be sent without charge to each stockholder who
so requests. Such request must be made to the Secretary of the Corporation at
its principal office or to the Transfer Agent.
The shares represented by this certificate are subject to restrictions on
Beneficial and Constructive Ownership and Transfer. Subject to certain further
restrictions and except as expressly provided in the Corporation's Charter, (i)
no Person may Beneficially or Constructively Own shares of the Corporation's
Common Stock in excess of nine and four-tenths percent (9.4%) in value or in
number of shares, whichever is more restrictive, of the aggregate of the
outstanding shares of Common Stock of the Corporation unless such Person is an
Excepted Holder (in which case the Excepted Holder Limit shall be applicable);
(ii) no Person may Beneficially or Constructively Own shares of Capital Stock of
the Corporation in excess of nine and four-tenths percent (9.4%) in value of the
aggregate of the outstanding shares of Capital Stock of the Corporation unless
such Person is an Excepted Holder (in which case the Excepted Holder Limit shall
be applicable); (iii) no Person may Beneficially or Constructively Own shares of
Capital Stock that would result in the Corporation being "closely held" under
Section 856(h) of the Internal Revenue Code of 1986, as amended ("the Code");
(iv) no Person may Transfer shares of Capital Stock that would result in the
Capital Stock of the Corporation being beneficially owned by less than one
hundred (100) Persons (determined without reference to any rules of attribution)
and (v) no Disqualified Organization shall Beneficially Own any shares of
Capital Stock, and no Person shall Transfer shares of Capital Stock to the
extent that such Transfer would result in shares of Capital Stock being
Beneficially Owned by a Disqualified Organization. Any Person who Beneficially
or Constructively Owns or attempts to Beneficially or Constructively Own shares
of Capital Stock which causes or will cause a Person to Beneficially or
Constructively Own shares of Capital Stock in excess or in violation of the
above limitations must immediately notify the Corporation. If any of the
restrictions on transfer or ownership are violated, the shares of Capital Stock
represented hereby will be automatically transferred to a Trustee of a
Charitable Trust for the benefit of one or more Charitable Beneficiaries. In
addition, the Corporation may redeem shares upon the terms and conditions
specified by the Board of Directors in its sole discretion if the Board of
Directors determines that ownership or a Transfer or other event may violate the
restrictions described above. Furthermore, upon the occurrence of certain
events, attempted Transfers in violation of the restrictions described above may
be void ab initio. All capitalized terms in this legend have the meanings
defined in the Charter of the Corporation, as the same may be amended from time
to time, a copy of which, including the restrictions on transfer and ownership,
will be furnished to each holder of Capital Stock of the Corporation on request
and without charge. Requests for such a copy may be directed to the Secretary of
the Corporation at its principal office.
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common.
UNIF GIFT MIN ACT-______________________________Custodian _____________________
(Cust) (Minor)
under Uniform Gifts to Minors
Act _________________________________________________________
(State)
UNIF TRF MIN ACT-___________________________Custodian (until age _____________)
(Cust)
_______________________________________ under Uniform Transfers
(Minor)
to Minors Act ________________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value received, _________________________________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________________________________________________ Shares of the Common Stock represented by the within Certificate, and do(es) hereby irrevocably constitute and appoint
______________________________________________________________________ Attorney to transfer the said Common Stock on the books of the within named Corporation with full power of substitution in the premises.
Dated _______________________________ X _____________________________________
X _____________________________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.
SIGNATURES GUARANTEED:
By ____________________________________________________________________________ THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
Exhibit 5.01
[VENABLE LLP]
June 18, 2004
New York Mortgage Trust, Inc.
1301 Avenue of the Americas
New York, New York 10019
Re: Registration Statement on Form S-11 (No. 333-111668)
Ladies and Gentlemen:
We have served as Maryland counsel to New York Mortgage Trust, Inc., a Maryland corporation (the "Company"), in connection with certain matters of Maryland law arising out of the registration of 15,000,000 shares (the "Shares") of the Company's common stock, $.01 par value per share (the "Common Stock"), to be issued and sold in an initial public offering. The Shares are covered by the above-referenced Registration Statement, and all amendments thereto (collectively, the "Registration Statement"), filed by the Company with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "1933 Act").
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the "Documents"):
1. The Registration Statement and the Prospectus included therein, filed with the Commission pursuant to the 1933 Act;
2. The charter of the Company, as amended and restated (the "Charter"), certified as of the date hereof by the State Department of Assessments and Taxation of Maryland (the "SDAT");
3. The Bylaws of the Company, certified as of the date hereof by an officer of the Company;
4. Resolutions adopted by the Board of Directors of the Company (the "Resolutions"), authorizing the registration, sale and issuance of the Shares, certified as of the date hereof by an officer of the Company;
5. A certificate of the SDAT as to the good standing of the Company, dated as of the date hereof;
New York Mortgage Trust, Inc.
June 18, 2004
6. A certificate executed by an officer of the Company, dated as of the date hereof; and
7. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party's obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
5. The Shares will not be issued in violation of Article VII (Restriction on Transfer and Ownership of Shares) of the Charter.
6. Prior to the issuance of the Shares, the Board of Directors, or a duly authorized committee thereof, will determine certain terms of issuance of such Shares (the "Corporate Proceedings").
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
New York Mortgage Trust, Inc.
June 18, 2004
1. The Company is a corporation, duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
2. Upon completion of the Corporate Proceedings, the issuance of the Shares will have been duly authorized and (assuming that, upon issuance, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the Charter), when and if issued against payment therefor in accordance with the Charter, the Resolutions, the Corporate Proceedings and the Registration Statement, the Shares will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the substantive laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with any federal or state securities laws, including the securities laws of the State of Maryland. To the extent that any matter as to which our opinion is expressed herein would be governed by any jurisdiction other than the State of Maryland, we do not express any opinion on such matter.
The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein in the section entitled "Legal Matters" in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
Very truly yours,
/s/ Venable LLP |
Exhibit 8.01
June 18, 2004
New York Mortgage Trust, Inc.
1301 Avenue of the Americas
New York, New York 10019
New York Mortgage Trust, Inc. Qualification as Real Estate Investment Trust
Ladies and Gentlemen:
We have acted as counsel to New York Mortgage Trust, Inc., a Maryland corporation (the "Company"), in connection with the preparation of a Form S-11 registration statement (the "Registration Statement") filed with the Securities and Exchange Commission ("SEC") on December 31, 2003 (No. 333-111668), as amended through the date hereof, with respect to the offering and sale (the "Offering") of 15,000,000 shares of the common stock, par value $0.01 per share, of the Company (the "Common Stock"). You have requested our opinion regarding certain U.S. federal income tax matters in connection with the Offering.
In connection with the Offering, the Company has contracted to acquire all of the limited liability company interests in The New York Mortgage Company, LLC ("NYMC") in exchange for the Company's Common Stock and, at the option of the Company's Board of Directors, cash. After the Offering, the Company and NYMC will make a joint election for NYMC to be treated as a taxable REIT subsidiary of the Company, and NYMC will continue the residential mortgage origination business it has previously conducted.
In giving this opinion letter, we have examined the following:
1. the Company's Articles of Amendment and Restatement, in the form filed as an exhibit to the Registration Statement;
New York Mortgage Trust, Inc.
June 18, 2004
2. the Company's Bylaws, in the form filed as an exhibit to the Registration Statement;
3. the Registration Statement, including the prospectus contained as part thereof (the "Prospectus");
4. the Contribution Agreement, dated as of December 22, 2003, among Steven B. Schnall, Joseph V. Fierro, and the Company;
5. the organizational documents of New York Mortgage Funding, LLC, a Delaware limited liability company ("NYMF"); and
6. such other documents as we have deemed necessary or appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have assumed, with your consent, that:
1. during its short taxable year beginning on the business day immediately preceding the closing date of the Offering and ending December 31, 2004, and future taxable years, the Company will operate in a manner that will make the representations contained in a certificate, dated June 16, 2004 and executed by a duly appointed officer of the Company (the "Officer's Certificate"), true for such years;
2. the Company will not make any amendments to its organizational documents or the organizational documents of NYMC or NYMF after the date of this opinion that would affect its qualification as a real estate investment trust (a "REIT") for any taxable year; and
3. no action will be taken by the Company, NYMC, or NYMF after the date hereof that would have the effect of altering the facts upon which the opinions set forth below are based.
In connection with the opinions rendered below, we also have relied upon the correctness of the factual representations contained in the Officer's Certificate. Where such factual representations involve references to sections of the Internal Revenue Code of 1986, as amended (the "Code") or the Treasury regulations thereunder (the "Regulations"), or to published rulings of the Internal Revenue Service (the "Service"), we have explained those sections and/or rulings, and any other relevant authority to
New York Mortgage Trust, Inc.
June 18, 2004
which such representations refer, to the Company's representatives, and are satisfied that the Company's representatives understand such references and are capable of making such representations. After reasonable inquiry, we are not aware of any facts inconsistent with the representations set forth in the Officer's Certificate.
Based on the documents and assumptions set forth above, the representations set forth in the Officer's Certificate, and the discussion in the Prospectus under the caption "Federal Income Tax Consequences of Our Status as a REIT" (which is incorporated herein by reference), we are of the opinion that:
(a) commencing with the Company's short taxable year beginning on the business day immediately preceding the closing date of the Offering and ending December 31, 2004, the Company will qualify to be taxed as a REIT pursuant to sections 856 through 860 of the Code, and the Company's organization and proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code; and
(b) the descriptions of the law and the legal conclusions contained in the Prospectus under the caption "Federal Income Tax Consequences of Our Status as a REIT" are correct in all material respects, and the discussion thereunder fairly summarizes the federal income tax considerations that are likely to be material to a holder of the Common Stock.
We will not review on a continuing basis the Company's compliance with the documents or assumptions set forth above, or the representations set forth in the Officer's Certificate. Accordingly, no assurance can be given that the actual results of the Company's operations for any given taxable year will satisfy the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code and the Regulations, published administrative interpretations thereof, and published court decisions. The Service has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating to REIT qualification. No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as a REIT.
New York Mortgage Trust, Inc.
June 18, 2004
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the references to Hunton & Williams LLP under the caption "Federal Income Tax Consequences of Our Status as a REIT" in the Prospectus. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the SEC.
The foregoing opinions are limited to the U.S. federal income tax matters addressed herein, and no other opinions are rendered with respect to other federal tax matters or to any issues arising under the tax laws of any other country, or any state or locality. We undertake no obligation to update the opinions expressed herein after the date of this letter. This opinion letter is being furnished to you solely for submission to the SEC as an exhibit to the Registration Statement, and it speaks only as of the date hereof. This opinion letter may not be distributed, quoted in whole or in part or otherwise reproduced in any document, or filed with any governmental agency (other than as contemplated by this paragraph) without our express written consent.
Very truly yours,
/s/ Hunton & Williams LLP |
EXHIBIT 10.92
EMPLOYMENT AGREEMENT OF
STEVEN B. SCHNALL
AGREEMENT made this ___ day of __________, 2004, between New York Mortgage Trust, Inc., a Maryland corporation (the "Company"), and Steven B. Schnall (the "Executive").
The Executive is presently employed as the Co-Chief Executive Officer of the Company. The Board of Directors of the Company (the "Board") recognizes that the Executive's contribution to the growth and success of the Company has been substantial. The Board desires to provide for the continued employment of the Executive and to make certain changes in the Executive's employment arrangements with the Company which the Board has determined will reinforce and encourage the continued attention and dedication to the Company of the Executive as a member of the Company's management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to continue to serve the Company, on the terms and conditions herein provided. The Executive's continued employment with the Company is contingent on his execution of this Employment Agreement.
In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein.
2. Term. The employment of the Executive by the Company as provided in
Section 1 will commence on the closing date of the Company's initial public
offering and end on December 31, 2007, unless further extended or sooner
terminated as hereinafter provided. Commencing on January 1, 2005, and each
January 1 thereafter, the term of the Executive's employment shall automatically
be extended for one additional calendar year, unless, not later than the October
31 immediately preceding such January 1, the Company or the Executive shall have
given written notice to the other that it does not wish that the Term of this
Agreement is to be automatically extended as described above. For purposes of
this Agreement, "Term" shall mean the actual duration of Executive's employment
hereunder, taking into account any extensions or notices not to extend pursuant
to this Section 2 or termination of employment pursuant to Section 7.
3. Position and Duties. The Executive shall serve as the Co-Chief Executive Officer of the Company and shall have such responsibilities, duties and authority as he may have as of the date hereof (or any position to which he may be promoted after the date hereof) and as may from time to time be assigned to the Executive by the Board that are consistent with such responsibilities, duties and authority. The Executive shall also serve as a senior executive officer of certain subsidiaries of the Company, with positions, titles and responsibilities that are suitable for the Co-Chief Executive Officer of the Company, at the reasonable request of the Board without additional compensation. The Executive shall devote substantially all his working time and
efforts to the business and affairs of the Company; provided, that nothing in this Agreement shall preclude Executive from serving as a director or trustee in any other firm or from pursuing personal real estate investments and other personal investments, as long as such activities do not interfere with Executive's performance of his duties hereunder or violate Section 9 or 10 of this Agreement. Executive may continue to serve as an owner and, as the President of Centurion Abstract, LLC, which provides title insurance brokerage services for certain title insurance providers and to which the Company may refer its borrowers from time to time for assistance in obtaining title insurance in connection with mortgage loans they obtain from the Company and Executive may continue to serve as an owner and as the President of NYMC Capital Corporation, a commercial mortgage brokerage company, in each case so long as these activities do not prevent Executive from devoting substantially all of his working time and efforts to the business of the Company or otherwise interfere with his ability to perform his obligations hereunder.
4. Service as a Director. During the Term, for so long as the Executive is
the beneficial owner of at least 1,000,000 shares of the Company's common stock,
(i) the Executive agrees to continue to serve to the extent elected or
appointed, as applicable, and (ii) the Company agrees to nominate the Executive
annually for reelection to serve, without additional compensation, as a director
of the Company. The Executive also agrees to serve as the director of any
subsidiary of the Company upon the request of the Board. The Executive shall be
indemnified for serving in such capacities on a basis no less favorable than is
currently provided by the Company to any other director of the Company or
subsidiary of the Company.
5. Place of Performance. In connection with the Executive's employment by the Company, the Executive shall be based at the principal executive offices of the Company in New York, New York, except for required travel on the Company's business to an extent substantially consistent with present business travel obligations.
6. Compensation and Related Matters.
(a) Base Salary. The Company shall pay the Executive a base salary
annually (the "Base Salary"), which shall be payable in periodic installments
according to the Company's normal payroll practices. The initial Base Salary
shall be $390,000. During the Terms, the Board or the Compensation Committee of
the Board (the "Compensation Committee") shall review the Base Salary at least
once a year to determine whether the Base Salary should be increased effective
the following January 1; provided, however, that on January 1, 2005, the initial
Base Salary shall be increased by 5%, and on each January 1 thereafter during
the Term, the Base Salary shall be increased by a minimum positive amount equal
to the Base Salary in effect on January 1 of the prior year multiplied by the
increase in the Consumer Price Index for such year. The amount of the increase
shall be determined before March 31 of each year and shall be retroactive to
January 1. The Base Salary, including any increases, shall not be decreased
during the Term. For purposes of this Agreement, the term "Base Salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 6(a).
(b) Annual Cash Incentive Awards. The Executive shall be eligible to participate in the Company's annual cash incentive bonus plan adopted by the Compensation Committee for each fiscal year during the Term of this Agreement ("Bonus Plan"), subject to the terms and
conditions of the Bonus Plan. If the Executive or the Company, as the case may
be, satisfies the performance criteria contained in such Bonus Plan for a fiscal
year, he shall receive an annual Incentive Bonus (as defined below) in an amount
determined by the Compensation Committee and subject to ratification by the
Board, if required. If the Executive or the Company, as the case may be, fails
to satisfy the performance criteria contained in such Bonus Plan for a fiscal
year, the Compensation Committee may determine whether any Incentive Bonus shall
be payable to Executive for that year, subject to ratification by the Board, if
required. Beginning January 1, 2005, the Bonus Plan shall contain both
individual and group goals established by the Compensation Committee. The annual
Incentive Bonus shall be paid to the Executive no later than thirty (30) days
after the date the Compensation Committee determines whether the criteria in the
Bonus Plan for such fiscal year were satisfied. For purposes of this Agreement,
the term "Incentive Bonus" shall mean the amount established pursuant to this
Section 6(b).
(c) Stock Based Awards. The Company has established the 2004 Stock Incentive Plan ("Stock Incentive Plan"). Subject to the terms and conditions of the Stock Incentive Plan, the Executive shall be eligible to participate in the Stock Incentive Plan, and shall be eligible to receive annual stock option and/or restricted stock awards under the Stock Incentive Plan. The Compensation Committee shall approve any such awards made to the Executive pursuant to the Stock Incentive Plan.
(i) 2004 Stock Incentive Plan Option Grants. Option awards under the
Stock Incentive Plan will have an exercise price per share equal to the closing
price of the Company's common stock on the trading day immediately preceding the
date of grant, will have a term of ten (10) years and will vest and become
exercisable with respect to 1/3 of the underlying shares of Company common stock
on the first, second and third anniversaries, respectively, of the date of
grant; provided, however, that the Executive will be 100% vested in all
outstanding option awards, including the unvested portion of such awards, upon
(i) a Change in Control (as defined herein), (ii) a termination by the Company
without Cause (as defined herein), (iii) a termination by the Executive for Good
Reason (as defined herein), (iv) the Executive's death, or (v) the Disability
(as defined below) of the Executive, and that the Executive will forfeit all
unvested options if he is terminated for Cause or he terminates his employment
hereunder for other than Good Reason.
(ii) 2004 Stock Incentive Plan Restricted Stock Awards. The Stock Incentive Plan provides for the issuance of shares of Company common stock as restricted common stock ("Restricted Stock Grants") to the extent that such shares of common stock are available thereunder. Restricted Stock Grants awarded to the Executive shall be subject to forfeiture restrictions that will terminate with respect to 1/3 of the awarded shares on the first, second and third anniversaries of the date of the issuance; provided, however, that with respect to the Initial Restricted Stock Grant (as defined below), 33.3% of such shares will be fully vested and unrestricted upon issuance and the forfeiture restrictions with respect to the remaining 66.7% of such shares will terminate with respect to 22.3% of the awarded shares on the first anniversary of the date of issuance, 22.2% of the awarded shares on the second anniversary of the date of issuance and 22.2% of the awarded shares on the third anniversary of the date of issuance. Upon completion of the Company's initial public offering of its common stock (the "IPO"), the Company shall grant to the Executive a Restricted Stock Grant of 73,054 shares of Company
common stock (the "Initial Restricted Stock Grant"). In the event the underwriters in the IPO exercise their over-allotment option, the Company shall promptly increase the number of shares of Company common stock granted to the Executive in the Initial Restricted Stock Grant by a percentage equal to the percentage of over-allotment option shares issued relative to the number of initial shares issued in the IPO, e.g. if the underwriters exercise their full 15% over-allotment option, the Company will increase the Initial Restricted Stock Grant by 10,958 shares, or 15%, and there additional shares of common stock will be deemed to be part of the Initial Restricted Stock Grant. Notwithstanding the foregoing, the Executive will be 100% vested and all restrictions on each outstanding Restricted Stock Grant will lapse upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) a termination by the Executive for Good Reason (as defined herein), (iv) the Executive's death, (v) the Disability (as defined below) of the Executive, or (vi) the Company's failure to renew this Agreement, and that the Executive will forfeit all shares with respect to which the forfeiture restrictions have not terminated if he is terminated for Cause or he terminates for other than Good Reason. The common stock issued as Restricted Stock Grants will have voting and dividend rights.
For purposes of this Agreement:
"Acquiring Person" means that a Person, considered alone or as part of a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is or becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing at least fifty percent (50%) of the Company's then outstanding securities entitled to vote generally in the election of the Board.
"Continuing Director" means any member of the Board, while a member of the Board and (i) who was a member of the Board on the closing date of the Company's initial public offering of the Common Stock or (ii) whose nomination for or election to the Board was recommended or approved by a majority of the Continuing Directors.
"Control Change Date" means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the "Control Change Date" is the date of the last of such transactions.
"Change in Control" means (i) a Person is or becomes an Acquiring Person;
(ii) holders of the securities of the Company entitled to vote thereon approve
any agreement with a Person (or, if such approval is not required by applicable
law and is not solicited by the Company, the closing of such an agreement) that
involves the transfer of all or substantially all of the Company's total assets
on a consolidated basis, as reported in the Company's consolidated financial
statements filed with the Securities and Exchange Commission; (iii) holders of
the securities of the Company entitled to vote thereon approve a transaction
(or, if such approval is not required by applicable law and is not solicited by
the Company, the closing of such a transaction) pursuant to which the Company
will undergo a merger, consolidation, or statutory share exchange with a Person,
regardless of whether the Company is intended to be the surviving or resulting
entity after the merger, consolidation, or statutory share exchange, other than
a transaction that results in the voting securities of the Company carrying the
right to vote in
elections of persons to the Board outstanding immediately prior to the closing
of the transaction continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least 50%
(fifty percent) of the Company's voting securities carrying the right to vote in
elections of persons to the Company's Board, or such securities of such
surviving entity, outstanding immediately after the closing of such transaction;
(iv) the Continuing Directors cease for any reason to constitute a majority of
the Board; (v) holders of the securities of the Company entitled to vote thereon
approve a plan of complete liquidation of the Company or an agreement for the
sale or liquidation by the Company of all or substantially all of the Company's
assets (or, if such approval is not required by applicable law and is not
solicited by the Company, the commencement of actions constituting such a plan
or the closing of such an agreement); or (vi) the Board adopts a resolution to
the effect that, in its judgment, as a consequence of any one or more
transactions or events or series of transactions or events, a Change in Control
of the Company has effectively occurred. The Board shall be entitled to exercise
its sole and absolute discretion in exercising its judgment and in the adoption
of such resolution, whether or not any such transaction(s) or event(s) might be
deemed, individually or collectively, to satisfy any of the criteria set forth
in subparagraphs (i) through (v) above.
"Person" means any human being, firm, corporation, partnership, or other entity. "Person" also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term "Person" does not include the Company or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Company or any Related Entity, or any person or entity organized, appointed, or established by the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan, unless the Board determines that such an employee-benefit plan or such person or entity is a "Person".
"Related Entity" means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code.
(d) Benefits.
(i) Vacation. The Executive shall be entitled to four (4) weeks of paid vacation per full calendar year. The Executive shall be entitled to cash in lieu of any unused vacation time. The Executive shall not be entitled to carry over any unused vacation time from year to year.
(ii) Sick and Personal Days. The Executive shall be entitled to sick and personal days in accordance with the policies of the Company.
(iii) Employee Benefits.
(A) Participation in Employee Benefit Plans. Subject to the terms of any applicable plans, policies or programs, the Executive and his spouse and eligible dependents, if any, and their respective designated beneficiaries where applicable, will be eligible for and entitled to participate in any Company sponsored employee benefit plans, including but not
limited to benefits such as group health, dental, accident, disability insurance, group life insurance, and a 401(k) plan, as such benefits may be offered from time to time, on a basis no less favorable than that applicable to other executives of the Company.
(B) Disability Insurance. The Company will maintain, at its cost, a renewable long-term Disability plan that, subject to the terms of such plan and any applicable plans, policies or programs, provides for payment of not less than 60% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues. In addition, the Company shall reimburse the Executive the amount of the premiums payable by the Executive with respect to a personal supplemental long-term disability insurance policy providing for benefits equal to at least 40% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues.
(iv) Annual Physical. If the Executive desires an annual physical examination, the Company shall provide, at its cost, a medical examination for the Executive on an annual basis by a licensed physician in the New York, New York metropolitan area selected by the Executive. The results of the examination and any medical information or records regarding the examination will be provided by the physician to the executive, and not to the Company.
(v) Directors and Officers Insurance. During the Term and for a period of 24 months thereafter, the Executive shall be entitled to director and officer insurance coverage for his acts and omissions while an officer and director of the Company on a basis no less favorable to him than the coverage provided to current officers and directors.
(vi) Life Insurance. The Company will purchase a whole life policy for the benefit of the Executive or the Executive's designated beneficiaries with a death benefit of $3.0 million. The Executive shall be entitled to reimbursement of any income tax that the Executive incurs with respect to the Company's payment of premiums.
(vii) Key Man Life Insurance. The Company may purchase on the life of the Executive up to $15.0 million of key man life insurance with the Company as the beneficiary of the death benefit.
(viii) Expenses, Office and Secretarial Support. The Executive shall be entitled to reimbursement of all reasonable expenses, in accordance with the Company's policy as in effect from time to time and on a basis no less favorable than that applicable to other executives of the Company, including, without limitation, telephone, reasonable travel and reasonable entertainment expenses incurred by the Executive in connection with the business of the Company, promptly upon the presentation by the Executive of appropriate documentation. The Executive shall also be entitled to appropriate office space, administrative support, and such other facilities and services as are suitable to the Executive's positions and adequate for the performance of the Executive's duties.
7. Termination. The Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, in the written opinion of a qualified physician reasonably agreed to by the Company and the Executive, the Executive shall become unable to perform his duties hereunder due to Disability, the Company may terminate the Executive's employment hereunder. As used in this Agreement, the term "Disability" shall mean inability of the Executive, due to physical or mental condition, to perform the essential functions of the Executive's job, after consideration of the availability of reasonable accommodations, for more than 180 total calendar days during any period of 12 consecutive months.
(c) For Cause. The Company may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment hereunder upon a determination
by at least a majority of the members of the Board (other than Executive) at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive of such meeting, the purpose thereof and the
particulars of the basis for such meeting and the Executive is given an
opportunity, together with counsel, to be heard before the Board) that Executive
(i) has committed fraud or misappropriated, stolen or embezzled funds or
property from the Company or an affiliate of the Company or secured or attempted
to secure personally any profit in connection with any transaction entered into
on behalf of the Company or any affiliate of the Company, (ii) has been
convicted of, or entered a plea of guilty or "nolo contendre" to, a felony which
in the reasonable opinion of the Board brings Executive into disrepute or is
likely to cause material harm to the Company's (or any affiliate of the Company)
business, customer or supplier relations, financial condition or prospects,
(iii) has, notwithstanding not less than 30 days' prior written notice from the
Board, willfully failed to perform (other than by reason of illness or temporary
disability ) his material duties hereunder, (iv) has knowingly violated or
breached any material law or regulation to the material detriment of the Company
or any affiliates of the Company or its business, or (v) has breached any
non-competition, non-disclosure or non-solicitation agreement between Executive
and the Company which causes or is reasonably likely to cause material harm to
the Company. For purposes of this provision, no act or failure to act, on the
part of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that his action or omission was in the best interests of the Company. Any act,
or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. Any notice of termination
delivered by the Company to Executive that purports to notify Executive of a
termination for Cause, but where the Company has not otherwise followed the
procedures set forth in the definition of "Cause" above, shall be deemed to
constitute a notice of termination without Cause pursuant to Section 7(d)
hereof. Neither a notice from the Company to Executive that a meeting of the
Board has been scheduled to determine whether grounds for a termination for
"Cause" exist, nor the holding of such a meeting, shall itself be construed as a
notice of termination for such purpose.
(d) Without Cause. The Company may at any time terminate the Executive's employment hereunder without Cause.
(e) Termination by the Executive.
(i) The Executive may terminate his employment hereunder (A) for Good Reason, (B) at any time upon 30 days written notice following receipt by the Executive of written notification by the Company that it does not intend to extend the Term of this Agreement as provided in Section 2 (a "Notice of Non-Renewal"), or (C) at any time after the date hereof by giving sixty (60) days prior notice of his intention to terminate.
(ii) For purposes of this Agreement, "Good Reason" shall mean (A) a
failure by the Company to comply with any material provision of this Agreement
(other than the Company's payment obligations referred to in clause (E) below)
which has not been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Company, (B) the assignment
to the Executive of any material duties inconsistent with the Executive's
position with the Company or a substantial adverse alteration in the nature or
status of the Executive's responsibilities without the consent of the Executive,
(C) without the consent of the Executive, a material reduction in employee
benefits other than a reduction generally applicable to similarly situated
executives of the Company, (D) without the consent of the Executive, relocation
of the Company's principal place of business outside a fifty (50) mile radius of
Midtown Manhattan, (E) any failure by the Company to pay the Executive Base
Salary or any Incentive Bonus to which he is entitled under the Bonus Plan which
failure has not been cured within ten (10) days after notice of such
noncompliance has been given by the Executive to the Company or any failure of
the Compensation Committee to approve a Bonus Plan for any fiscal year, or (F)
without the consent of the Executive, so long as the Executive is the beneficial
owner of at least 1,000,000 shares of the Company's common stock, a failure by
the Board of Directors to nominate the Executive for reelection as a director of
the Company or a failure by the stockholders of the Company to reelect Executive
as a director of the Company or a removal by the stockholders or the Board of
Directors of the Executive from his position as a director of the Company, other
than for Cause.
(f) Any termination of the Executive's employment by the Company or by the
Executive (other than termination pursuant to subsection (a) or (b) of this
Section 7) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 14. 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 the Executive's employment under the provision so indicated.
(g) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated pursuant to subsection (b) above, the date as of which the physician's written opinion is received by the Company, (iii) if the Executive's employment is terminated pursuant to subsection (c) above, the date specified in the Notice of Termination, and (iv) if the Executive's employment is terminated for any other reason, the date sixty (60) days following the date on which a Notice of Termination is given.
8. Compensation Upon Termination, Death or During Disability.
(a) Disability. During any period that the Executive fails to perform his
duties hereunder as a result of his incapacity due to a physical or mental
condition ("disability period"), the Executive shall continue to receive his
full Base Salary at the rate then in effect for such disability period (and
shall not be eligible for payments under the disability plans, programs and
policies maintained by the Company or in connection with employment by the
Company ("Disability Plans")) until his employment is terminated pursuant to
Section 7(b) hereof, and upon such termination, the Executive shall, within ten
(10) days of such termination, be entitled to all amounts to which the Executive
is entitled pursuant to the Disability Plans. The Executive's rights under any
long-term Disability Plan shall be determined in accordance with the provisions
of such plan, but in no event will the Company maintain a long-term Disability
plan that provides for payment of less than 60% of the Executive's Base Salary.
In addition, upon the Executive's termination in accordance with Section 7(b)
hereof, all stock options, restricted stock grants awards and any other equity
awards granted by the Company to the Executive shall become fully vested,
unrestricted and exercisable as of the Date of Termination.
(b) Death. If the Executive's employment is terminated by his death, the Company shall within ten (10) days following the date of the Executive's death, pay to the Executive's designated beneficiary(ies) any amounts due to the Executive under Section 6(d) through the date of and as a result of his death, an amount equal to the Executive's annual Base Salary for the year in which the termination took place, and an amount equal to the Executive's target Bonus for the year in which the termination took place, together with any other amounts to which the Executive is entitled pursuant to death benefit plans, programs and policies. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination.
(c) Cause or other than Good Reason. If the Executive's employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and reimburse the Executive for all reasonable and customary expenses incurred by the Executive in performing services hereunder prior to the Date of Termination in accordance with Section 6(d), and the Company shall have no further obligations to the Executive under this Agreement.
(d) Termination by the Company without Cause (other than for death or Disability) or Termination by the Executive for Good Reason. If the Company shall terminate the Executive's employment other than for death, Disability pursuant to Section 7(b) or Cause, or the Executive shall terminate his employment for Good Reason, then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of
Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the product of (A) the sum of (1) the Executive's Base Salary in effect as of the Date of Termination and (2) the Executive's highest Annual Bonus earned in the last three fiscal years, and (B) the lesser of three (3) or the quotient of the number of whole months remaining in the term of this Agreement as of the Date of Termination divided by twelve (12); such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) In the case of a termination of the Executive's employment by the Company without Cause or for Disability, or by the Executive for Good Reason, the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(d)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
(e) Upon Receipt by the Executive of a Notice of Non-Renewal. If the Company delivers to the Executive a Notice of Non-Renewal, and the Executive elects to terminate his employment with the Company as a result of such Notice of Non-Renewal pursuant to Section 7(e)(i)(B), then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the sum of (A) an amount equal to the Executive's annual Base Salary as then in effect and (B) an amount equal to the Executive's highest Annual Bonus earned
during the preceding three fiscal years; such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(e)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
9. Nondisclosure. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. The agreement made in this Section 9 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law or by separate agreement upon the Executive in respect of confidential information of the Company.
10. Non-Competition and Non-Solicitation. During the Executive's employment with the Company and for a period of twenty four (24) months following the Executive's Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for himself or herself or on behalf of or in conjunction with any other person, persons, company, firm, partnership, corporation, business, group or other entity (each, a "Person"), work in the principal line of business engaged in, or planned to be engaged in, by the Company at the Date of Termination within any state where the Company is doing business or has plans for commencing business as of the Date of Termination. The Executive's passive ownership of less than five percent (5%) of the securities of a public company shall not be treated as an action in competition with the Company.
(a) Executive hereby acknowledges and agrees that his employment with the Company places him in a position of trust and confidence with respect to the business operations,
customers, prospects and personnel of the Company. He agrees that, due to his position and knowledge, his engaging in any business that competes in the principal line of business as the Company will cause the Company significant and irreparable harm.
(b) In consideration of the compensation and benefits extended to him under this Agreement, Executive agrees that, during the term of Executive's employment by the Company and for twenty four (24) months following the Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for any reason whatsoever, directly or indirectly, for himself or herself or on behalf of or in conjunction with any other Person with whom the Executive works or is affiliated:
(i) solicit and/or hire any Person who is on the Date of Termination, or has been within six (6) months prior to the Date of Termination, an employee of the Company or its affiliates;
(ii) solicit, induce or attempt to induce any Person who is, at the Date of Termination, or has been within six (6) months prior to the Date of Termination, an actual customer, client, business partner, or a prospective customer, client, business partner (i.e., a customer, client or business partner who is party to a written proposal (including, with respect to the Company's borrowers, a mortgage loan application) or letter of intent with the Company, in each case written less than six (6) months prior to the Date of Termination) of the Company, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates, (B) enticing or attempting to entice such Person to do business with Executive or any affiliate of Executive, or (C) in any way interfering with the relationship between such Person and the Company or its affiliates; or
(iii) solicit, induce or attempt to induce any Person who is or that is, at the time of the Date of Termination, or has been within six (6) months prior to the Date of Termination, a supplier, licensee or consultant of, or provider of goods or services to the Company or its affiliates, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates or (B) in any way interfering with the relationship between such Person and the Company or its affiliates.
(c) Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, Executive agrees that the foregoing covenants in this Section 10, in addition to and not in limitation of any other rights, remedies or damages available to the Company at law, in equity or under this Agreement, shall be enforced by the Company in the event of the breach or threatened breach by Executive, by injunctions and/or restraining orders.
(d) It is agreed by the parties that the covenants contained in this
Section 10 impose a fair and reasonable restraint on Executive in light of the
activities and business of the Company on the date of the execution of this
Agreement and the current plans of the Company; but it is also the intent of the
Company and Executive that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the Company and its affiliates throughout the term of these covenants. Executive also acknowledges that this restraint will not prevent him from earning a living in his chosen field of work.
(e) The covenants in this Section 10 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth herein are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement shall thereby be reformed to reflect the same.
(f) All of the covenants in this Section 10 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of Executive against the Company whether predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of such covenants. It is specifically agreed that the duration of the period during which the agreements and covenants of Executive made in this Section 10 shall be effective shall be computed by excluding from such computation any time during which Executive is in violation of any provision of this Section 10.
(g) Notwithstanding any of the foregoing, if any applicable law, judicial
ruling or order shall reduce the time period during which Executive shall be
prohibited from engaging in any competitive activity described in Section 10
hereof, the period of time for which Executive shall be prohibited pursuant to
Section 10 hereof shall be the maximum time permitted by law.
11. Successors; Binding Agreement. This Agreement shall be binding upon and inure to the benefit of successors and permitted assigns of the parties. This Agreement may not be assigned, nor may performance of any duty hereunder be delegated, by either party without the prior written consent of the other; provided, however, the Company may assign this Agreement to any successor to its business, including but not limited to in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or stock of the Company or similar transaction involving the Company or a successor corporation.
12. Additional Payments by the Company.
(a) If it is determined (as hereafter provided) that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any option, share appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then Executive will be entitled to receive an additional payment or payments (a "Gross-Up Payment") in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) All determinations required to be made under this Section 12, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by the Company's then current outside auditors; provided that if that firm is unwilling or unable to provide such services, another accounting firm may be selected by the Company (such accounting firm the "Accounting Firm"). The Company will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after the date of the change in control or the date of Executive's termination of employment, if applicable, and any other such time or times as may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive no later than five calendar days prior to the due date for Executive's income tax return on which the Excise Tax is included. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 12(f) hereof and Executive thereafter is required to make a payment of any Excise Tax, Executive shall so notify the Company, which will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.
(c) The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by Section 12(b) hereof.
(d) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. To the extent the Excise Tax has not been previously withheld from amounts paid to the Executive, Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with
the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Sections 12(b) and 12(d) hereof will be borne by the Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefore and reasonable evidence of his payment thereof.
(f) Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than ten (10) business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (x) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (y) the date that any payment of amount with respect to such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:
(i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;
(ii) take such action in connection with contesting such claim as the Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 12(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 12(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company will determine; provided, however, that if the Company directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(g) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, Executive receives any refund with respect to such claim, Executive will (subject to the Company's complying with the requirements of Section 12(f)) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, a determination is made that Executive will not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid pursuant to this Section 12. If, after the receipt by Executive of a Gross-Up Payment but before the payment by Executive of the Excise Tax, it is determined by the Accounting Firm that the Excise Tax payable by Executive is less than the amount originally computed by the Accounting Firm and consequently that the amount of the Gross-Up Payment is larger than that required by this Section 12, Executive shall promptly refund to the Company the amount by which the Gross-Up Payment initially made to Executive exceeds the Gross-Up Payment required under this Section 12.
13. Continued Performance. Provisions of this Agreement shall survive any
termination of Executive's employment hereunder if so provided herein or if
necessary or desirable fully to accomplish the purposes of such provisions,
including, without limitation, the obligations of the Executive under the terms
and conditions of Sections 9 and 10. Any obligation of the Company to make
payments to or on behalf of the Executive under Section 8 is expressly
conditioned upon the Executive's continued performance of the Executive's
obligations under Sections 9 and 10 for the time periods stated in Sections 9
and 10. The Executive recognizes that, except to the extent, if any, provided in
Section 8, the Executive will earn no compensation from the Company after the
Date of Termination.
14. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Steven B. Schnall
c/o New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
If to the Company:
New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
Attn: Compensation Committee
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer of the Company as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.
(a) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(b) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall deemed to be in an original but all of which together will constitute one and the same instrument.
(c) Disputes. Any dispute or controversy arising under or in connection with this Agreement shall, at the Executive's sole discretion, be settled exclusively by such judicial remedies as the Executive may seek to pursue or by arbitration conducted before a panel of three arbitrators in New York, New York in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction with respect to any violation or threatened violation of the provisions of Sections 9 or 10 of this Agreement and the Executive
hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The expenses of arbitration shall be borne by the Company.
(d) Executive's Legal Expenses. In the event that the Executive institutes any proceeding to enforce his rights under, or to recover damages for breach of this Agreement, the Executive, if he is the prevailing party, shall be entitled to recover from the Company any actual expenses for attorney's fees and disbursements incurred by him.
(e) Indemnification. The Company shall indemnify and hold Executive harmless to the maximum extent permitted by the laws of the State of Maryland (and the law of any other appropriate jurisdiction after any reincorporation of the Company) against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by Executive, in connection with the defense of, or as a result of any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that he is or was an officer or trustee of the Company, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor (or other than by or in the right of the Company); provided, however, that this indemnification provision shall not apply to any action or proceeding relating to a dispute between the Company and the Executive based on any alleged breach or violation of this Agreement.
(f) Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein.
[Signatures next page]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
NEW YORK MORTGAGE TRUST, INC.
Attest:
By:_______________________________ By:______________________________________
Name:
Title:
STEVEN B. SCHNALL
Attest:
By:_____________________________ ______________________________________
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EXHIBIT 10.93
EMPLOYMENT AGREEMENT OF
DAVID A. AKRE
AGREEMENT made this ___ day of __________, 2004, between New York Mortgage Trust, Inc., a Maryland corporation (the "Company"), and David A. Akre (the "Executive").
The Executive is presently employed as the Co-Chief Executive Officer of the Company. The Board of Directors of the Company (the "Board") recognizes that the Executive's contribution to the growth and success of the Company has been substantial. The Board desires to provide for the continued employment of the Executive and to make certain changes in the Executive's employment arrangements with the Company which the Board has determined will reinforce and encourage the continued attention and dedication to the Company of the Executive as a member of the Company's management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to continue to serve the Company, on the terms and conditions herein provided. The Executive's continued employment with the Company is contingent on his execution of this Employment Agreement.
In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein.
2. Term. The employment of the Executive by the Company as provided in
Section 1 will commence on the closing date of the Company's initial public
offering and end on December 31, 2007, unless further extended or sooner
terminated as hereinafter provided. Commencing on January 1, 2005, and each
January 1 thereafter, the term of the Executive's employment shall automatically
be extended for one additional calendar year, unless, not later than the October
31 immediately preceding such January 1, the Company or the Executive shall have
given written notice to the other that it does not wish that the Term of this
Agreement is to be automatically extended as described above. For purposes of
this Agreement, "Term" shall mean the actual duration of Executive's employment
hereunder, taking into account any extensions or notices not to extend pursuant
to this Section 2 or termination of employment pursuant to Section 7.
3. Position and Duties. The Executive shall serve as the Co-Chief Executive Officer of the Company and shall have such responsibilities, duties and authority as he may have as of the date hereof (or any position to which he may be promoted after the date hereof) and as may from time to time be assigned to the Executive by the Board that are consistent with such responsibilities, duties and authority. The Executive shall also serve as a senior executive officer of certain subsidiaries of the Company, with positions, titles and responsibilities that are suitable for the Co-Chief Executive Officer of the Company, at the reasonable request of the Board without additional compensation. The Executive shall devote substantially all his working time and
efforts to the business and affairs of the Company; provided, that nothing in this Agreement shall preclude Executive from serving as a director or trustee in any other firm or from pursuing personal real estate investments and other personal investments, as long as such activities do not interfere with Executive's performance of his duties hereunder or violate Section 9 or 10 of this Agreement.
4. Place of Performance. In connection with the Executive's employment by the Company, the Executive shall be based at the principal executive offices of the Company in New York, New York, except for required travel on the Company's business to an extent substantially consistent with present business travel obligations.
5. Compensation and Related Matters.
(a) Base Salary. The Company shall pay the Executive a base salary
annually (the "Base Salary"), which shall be payable in periodic installments
according to the Company's normal payroll practices. The initial Base Salary
shall be $390,000. During the Terms, the Board or the Compensation Committee of
the Board (the "Compensation Committee") shall review the Base Salary at least
once a year to determine whether the Base Salary should be increased effective
the following January 1; provided, however, that on January 1, 2005, the initial
Base Salary shall be increased by 5%, and on each January 1 thereafter during
the Term, the Base Salary shall be increased by a minimum positive amount equal
to the Base Salary in effect on January 1 of the prior year multiplied by the
increase in the Consumer Price Index for such year. The amount of the increase
shall be determined before March 31 of each year and shall be retroactive to
January 1. The Base Salary, including any increases, shall not be decreased
during the Term. For purposes of this Agreement, the term "Base Salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 6(a).
(b) Annual Cash Incentive Awards. The Executive shall be eligible
to participate in the Company's annual cash incentive bonus plan adopted by the
Compensation Committee for each fiscal year during the Term of this Agreement
("Bonus Plan"), subject to the terms and conditions of the Bonus Plan. If the
Executive or the Company, as the case may be, satisfies the performance criteria
contained in such Bonus Plan for a fiscal year, he shall receive an annual
Incentive Bonus (as defined below) in an amount determined by the Compensation
Committee and subject to ratification by the Board, if required. If the
Executive or the Company, as the case may be, fails to satisfy the performance
criteria contained in such Bonus Plan for a fiscal year, the Compensation
Committee may determine whether any Incentive Bonus shall be payable to
Executive for that year, subject to ratification by the Board, if required.
Beginning January 1, 2005, the Bonus Plan shall contain both individual and
group goals established by the Compensation Committee. The annual Incentive
Bonus shall be paid to the Executive no later than thirty (30) days after the
date the Compensation Committee determines whether the criteria in the Bonus
Plan for such fiscal year were satisfied. For purposes of this Agreement, the
term "Incentive Bonus" shall mean the amount established pursuant to this
Section 6(b).
(c) Stock Based Awards. The Company has established the 2004 Stock Incentive Plan ("Stock Incentive Plan"). Subject to the terms and conditions of the Stock Incentive Plan, the Executive shall be eligible to participate in the Stock Incentive Plan, and shall be eligible to
receive annual stock option and/or restricted stock awards under the Stock Incentive Plan. The Compensation Committee shall approve any such awards made to the Executive pursuant to the Stock Incentive Plan.
(i) 2004 Stock Incentive Plan Option Grants. Option awards under the Stock Incentive Plan will have an exercise price per share equal to the closing price of the Company's common stock on the trading day immediately preceding the date of grant, will have a term of ten (10) years and will vest and become exercisable with respect to 1/3 of the underlying shares of Company common stock on the first, second and third anniversaries, respectively, of the date of grant; provided, however, that the Executive will be 100% vested in all outstanding option awards, including the unvested portion of such awards, upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) a termination by the Executive for Good Reason (as defined herein), (iv) the Executive's death, or (v) the Disability (as defined below) of the Executive, and that the Executive will forfeit all unvested options if he is terminated for Cause or he terminates his employment hereunder for other than Good Reason.
(ii) 2004 Stock Incentive Plan Restricted Stock Awards. The Stock Incentive Plan provides for the issuance of shares of Company common stock as restricted common stock ("Restricted Stock Grants") to the extent that such shares of common stock are available thereunder. Restricted Stock Grants awarded to the Executive shall be subject to forfeiture restrictions that will terminate with respect to 1/3 of the awarded shares on the first, second and third anniversaries of the date of the issuance; provided, however, that with respect to the Initial Restricted Stock Grant (as defined below), 33.3% of such shares will be fully vested and unrestricted upon issuance and the forfeiture restrictions with respect to the remaining 66.7% of such shares will terminate with respect to 22.3% of the awarded shares on the first anniversary of the date of issuance, 22.2% of the awarded shares on the second anniversary of the date of issuance and 22.2% of the awarded shares on the third anniversary of the date of issuance. Upon completion of the Company's initial public offering of its common stock (the "IPO"), the Company shall grant to the Executive a Restricted Stock Grant of 94,860 shares of Company common stock (the "Initial Restricted Stock Grant"). In the event the underwriters in the IPO exercise their over-allotment option, the Company shall promptly increase the number of shares of Company common stock granted to the Executive in the Initial Restricted Stock Grant by a percentage equal to the percentage of over-allotment option shares issued relative to the number of initial shares issued in the IPO, e.g. if the underwriters exercise their full 15% over-allotment option, the Company will increase the Initial Restricted Stock Grant by 14,229 shares, or 15%, and there additional shares of common stock will be deemed to be part of the Initial Restricted Stock Grant. Notwithstanding the foregoing, the Executive will be 100% vested and all restrictions on each outstanding Restricted Stock Grant will lapse upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) a termination by the Executive for Good Reason (as defined herein), (iv) the Executive's death, (v) the Disability (as defined below) of the Executive, or (vi) the Company's failure to renew this Agreement, and that the Executive will forfeit all shares with respect to which the forfeiture restrictions have not terminated if he is terminated for Cause or he terminates for other than Good Reason. The common stock issued as Restricted Stock Grants will have voting and dividend rights.
For purposes of this Agreement:
"Acquiring Person" means that a Person, considered alone or as part of a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is or becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing at least fifty percent (50%) of the Company's then outstanding securities entitled to vote generally in the election of the Board.
"Continuing Director" means any member of the Board, while a member of the Board and (i) who was a member of the Board on the closing date of the Company's initial public offering of the Common Stock or (ii) whose nomination for or election to the Board was recommended or approved by a majority of the Continuing Directors.
"Control Change Date" means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the "Control Change Date" is the date of the last of such transactions.
"Change in Control" means (i) a Person is or becomes an Acquiring
Person; (ii) holders of the securities of the Company entitled to vote thereon
approve any agreement with a Person (or, if such approval is not required by
applicable law and is not solicited by the Company, the closing of such an
agreement) that involves the transfer of all or substantially all of the
Company's total assets on a consolidated basis, as reported in the Company's
consolidated financial statements filed with the Securities and Exchange
Commission; (iii) holders of the securities of the Company entitled to vote
thereon approve a transaction (or, if such approval is not required by
applicable law and is not solicited by the Company, the closing of such a
transaction) pursuant to which the Company will undergo a merger, consolidation,
or statutory share exchange with a Person, regardless of whether the Company is
intended to be the surviving or resulting entity after the merger,
consolidation, or statutory share exchange, other than a transaction that
results in the voting securities of the Company carrying the right to vote in
elections of persons to the Board outstanding immediately prior to the closing
of the transaction continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least 50%
(fifty percent) of the Company's voting securities carrying the right to vote in
elections of persons to the Company's Board, or such securities of such
surviving entity, outstanding immediately after the closing of such transaction;
(iv) the Continuing Directors cease for any reason to constitute a majority of
the Board; (v) holders of the securities of the Company entitled to vote thereon
approve a plan of complete liquidation of the Company or an agreement for the
sale or liquidation by the Company of all or substantially all of the Company's
assets (or, if such approval is not required by applicable law and is not
solicited by the Company, the commencement of actions constituting such a plan
or the closing of such an agreement); or (vi) the Board adopts a resolution to
the effect that, in its judgment, as a consequence of any one or more
transactions or events or series of transactions or events, a Change in Control
of the Company has effectively occurred. The Board shall be entitled to exercise
its sole and absolute discretion in exercising its judgment and in the adoption
of such resolution, whether or not any such transaction(s) or event(s) might be
deemed, individually or collectively, to satisfy any of the criteria set forth
in subparagraphs (i) through (v) above.
"Person" means any human being, firm, corporation, partnership, or other entity. "Person" also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term "Person" does not include the Company or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Company or any Related Entity, or any person or entity organized, appointed, or established by the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan, unless the Board determines that such an employee-benefit plan or such person or entity is a "Person".
"Related Entity" means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code.
(d) Benefits.
(i) Vacation. The Executive shall be entitled to four (4) weeks of paid vacation per full calendar year. The Executive shall be entitled to cash in lieu of any unused vacation time. The Executive shall not be entitled to carry over any unused vacation time from year to year.
(ii) Sick and Personal Days. The Executive shall be entitled to sick and personal days in accordance with the policies of the Company.
(iii) Employee Benefits.
(A) Participation in Employee Benefit Plans. Subject to the terms of any applicable plans, policies or programs, the Executive and his spouse and eligible dependents, if any, and their respective designated beneficiaries where applicable, will be eligible for and entitled to participate in any Company sponsored employee benefit plans, including but not limited to benefits such as group health, dental, accident, disability insurance, group life insurance, and a 401(k) plan, as such benefits may be offered from time to time, on a basis no less favorable than that applicable to other executives of the Company.
(B) Disability Insurance. The Company will maintain, at its cost, a renewable long-term Disability plan that, subject to the terms of such plan and any applicable plans, policies or programs, provides for payment of not less than 60% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues. In addition, the Company shall reimburse the Executive the amount of the premiums payable by the Executive with respect to a personal supplemental long-term disability insurance policy providing for benefits equal to at least 40% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues.
(iv) Annual Physical. If the Executive desires an annual physical examination, the Company shall provide, at its cost, a medical examination for the Executive on an annual basis by a licensed physician in the New York, New York metropolitan area selected by the
Executive. The results of the examination and any medical information or records regarding the examination will be provided by the physician to the executive, and not to the Company.
(v) Directors and Officers Insurance. During the Term and for a period of 24 months thereafter, the Executive shall be entitled to director and officer insurance coverage for his acts and omissions while an officer and director of the Company on a basis no less favorable to him than the coverage provided to current officers and directors.
(vi) Life Insurance. The Company will purchase a whole life policy for the benefit of the Executive or the Executive's designated beneficiaries with a death benefit of $3.0 million. The Executive shall be entitled to reimbursement of any income tax that the Executive incurs with respect to the Company's payment of premiums.
(vii) Key Man Life Insurance. The Company may purchase on the life of the Executive up to $15.0 million of key man life insurance with the Company as the beneficiary of the death benefit.
(viii) Expenses, Office and Secretarial Support. The Executive shall be entitled to reimbursement of all reasonable expenses, in accordance with the Company's policy as in effect from time to time and on a basis no less favorable than that applicable to other executives of the Company, including, without limitation, telephone, reasonable travel and reasonable entertainment expenses incurred by the Executive in connection with the business of the Company, promptly upon the presentation by the Executive of appropriate documentation. The Executive shall also be entitled to appropriate office space, administrative support, and such other facilities and services as are suitable to the Executive's positions and adequate for the performance of the Executive's duties.
6. Termination. The Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, in the written opinion of a qualified physician reasonably agreed to by the Company and the Executive, the Executive shall become unable to perform his duties hereunder due to Disability, the Company may terminate the Executive's employment hereunder. As used in this Agreement, the term "Disability" shall mean inability of the Executive, due to physical or mental condition, to perform the essential functions of the Executive's job, after consideration of the availability of reasonable accommodations, for more than 180 total calendar days during any period of 12 consecutive months.
(c) For Cause. The Company may terminate the Executive's employment hereunder for Cause. For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon a determination by at least a majority of the members of the Board (other than Executive) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive of such meeting, the purpose thereof and the particulars of the basis for such meeting and the Executive is given an opportunity, together with
counsel, to be heard before the Board) that Executive (i) has committed fraud or misappropriated, stolen or embezzled funds or property from the Company or an affiliate of the Company or secured or attempted to secure personally any profit in connection with any transaction entered into on behalf of the Company or any affiliate of the Company, (ii) has been convicted of, or entered a plea of guilty or "nolo contendre" to, a felony which in the reasonable opinion of the Board brings Executive into disrepute or is likely to cause material harm to the Company's (or any affiliate of the Company) business, customer or supplier relations, financial condition or prospects, (iii) has, notwithstanding not less than 30 days' prior written notice from the Board, willfully failed to perform (other than by reason of illness or temporary disability ) his material duties hereunder, (iv) has knowingly violated or breached any material law or regulation to the material detriment of the Company or any affiliates of the Company or its business, or (v) has breached any non-competition, non-disclosure or non-solicitation agreement between Executive and the Company which causes or is reasonably likely to cause material harm to the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that his action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Any notice of termination delivered by the Company to Executive that purports to notify Executive of a termination for Cause, but where the Company has not otherwise followed the procedures set forth in the definition of "Cause" above, shall be deemed to constitute a notice of termination without Cause pursuant to Section 7(d) hereof. Neither a notice from the Company to Executive that a meeting of the Board has been scheduled to determine whether grounds for a termination for "Cause" exist, nor the holding of such a meeting, shall itself be construed as a notice of termination for such purpose.
(d) Without Cause. The Company may at any time terminate the Executive's employment hereunder without Cause.
(e) Termination by the Executive.
(i) The Executive may terminate his employment hereunder (A) for Good Reason, (B) at any time upon 30 days written notice following receipt by the Executive of written notification by the Company that it does not intend to extend the Term of this Agreement as provided in Section 2 (a "Notice of Non-Renewal"), or (C) at any time after the date hereof by giving sixty (60) days prior notice of his intention to terminate.
(ii) For purposes of this Agreement, "Good Reason" shall
mean (A) a failure by the Company to comply with any material provision of this
Agreement (other than the Company's payment obligations referred to in clause
(E) below) which has not been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Company, (B) the assignment
to the Executive of any material duties inconsistent with the Executive's
position with the Company or a substantial adverse alteration in the nature or
status of the Executive's responsibilities without the consent of the Executive,
(C) without the consent of the Executive, a material reduction in employee
benefits other than a reduction generally
applicable to similarly situated executives of the Company, (D) without the consent of the Executive, relocation of the Company's principal place of business outside a fifty (50) mile radius of Midtown Manhattan, or (E) any failure by the Company to pay the Executive Base Salary or any Incentive Bonus to which he is entitled under the Bonus Plan which failure has not been cured within ten (10) days after notice of such noncompliance has been given by the Executive to the Company or any failure of the Compensation Committee to approve a Bonus Plan for any fiscal year.
(f) Any termination of the Executive's employment by the Company or by the Executive (other than termination pursuant to subsection (a) or (b) of this Section 7) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 14. 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 the Executive's employment under the provision so indicated.
(g) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated pursuant to subsection (b) above, the date as of which the physician's written opinion is received by the Company, (iii) if the Executive's employment is terminated pursuant to subsection (c) above, the date specified in the Notice of Termination, and (iv) if the Executive's employment is terminated for any other reason, the date sixty (60) days following the date on which a Notice of Termination is given.
7. Compensation Upon Termination, Death or During Disability.
(a) Disability. During any period that the Executive fails to
perform his duties hereunder as a result of his incapacity due to a physical or
mental condition ("disability period"), the Executive shall continue to receive
his full Base Salary at the rate then in effect for such disability period (and
shall not be eligible for payments under the disability plans, programs and
policies maintained by the Company or in connection with employment by the
Company ("Disability Plans")) until his employment is terminated pursuant to
Section 7(b) hereof, and upon such termination, the Executive shall, within ten
(10) days of such termination, be entitled to all amounts to which the Executive
is entitled pursuant to the Disability Plans. The Executive's rights under any
long-term Disability Plan shall be determined in accordance with the provisions
of such plan, but in no event will the Company maintain a long-term Disability
plan that provides for payment of less than 60% of the Executive's Base Salary.
In addition, upon the Executive's termination in accordance with Section 7(b)
hereof, all stock options, restricted stock grants awards and any other equity
awards granted by the Company to the Executive shall become fully vested,
unrestricted and exercisable as of the Date of Termination.
(b) Death. If the Executive's employment is terminated by his death, the Company shall within ten (10) days following the date of the Executive's death, pay to the Executive's designated beneficiary(ies) any amounts due to the Executive under Section 6(d) through the date of and as a result of his death, an amount equal to the Executive's annual Base Salary for the year in which the termination took place, and an amount equal to the Executive's target Bonus for the
year in which the termination took place, together with any other amounts to which the Executive is entitled pursuant to death benefit plans, programs and policies. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination.
(c) Cause or other than Good Reason. If the Executive's employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and reimburse the Executive for all reasonable and customary expenses incurred by the Executive in performing services hereunder prior to the Date of Termination in accordance with Section 6(d), and the Company shall have no further obligations to the Executive under this Agreement.
(d) Termination by the Company without Cause (other than for death or Disability) or Termination by the Executive for Good Reason. If the Company shall terminate the Executive's employment other than for death, Disability pursuant to Section 7(b) or Cause, or the Executive shall terminate his employment for Good Reason, then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the product of (A) the sum of (1) the Executive's Base Salary in effect as of the Date of Termination and (2) the Executive's highest Annual Bonus earned in the last three fiscal years, and (B) the lesser of three (3) or the quotient of the number of whole months remaining in the term of this Agreement as of the Date of Termination divided by twelve (12); such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) In the case of a termination of the Executive's employment by the Company without Cause or for Disability, or by the Executive for Good Reason, the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(d)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
(e) Upon Receipt by the Executive of a Notice of Non-Renewal. If the Company delivers to the Executive a Notice of Non-Renewal, and the Executive elects to terminate his employment with the Company as a result of such Notice of Non-Renewal pursuant to Section 7(e)(i)(B), then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the sum of (A) an amount equal to the Executive's annual Base Salary as then in effect and (B) an amount equal to the Executive's highest Annual Bonus earned during the preceding three fiscal years; such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(e)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
8. Nondisclosure. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. The agreement made in this Section 9 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law or by separate agreement upon the Executive in respect of confidential information of the Company.
9. Non-Competition and Non-Solicitation. During the Executive's employment with the Company and for a period of twenty four (24) months following the Executive's Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for himself or herself or on behalf of or in conjunction with any other person, persons, company, firm, partnership, corporation, business, group or other entity (each, a "Person"), work in the principal line of business engaged in, or planned to be engaged in, by the Company at the Date of Termination within any state where the Company is doing business or has plans for commencing business as of the Date of Termination. The Executive's passive ownership of less than five percent (5%) of the securities of a public company shall not be treated as an action in competition with the Company.
(a) Executive hereby acknowledges and agrees that his employment with the Company places him in a position of trust and confidence with respect to the business operations, customers, prospects and personnel of the Company. He agrees that, due to his position and knowledge, his engaging in any business that competes in the principal line of business as the Company will cause the Company significant and irreparable harm.
(b) In consideration of the compensation and benefits extended to him under this Agreement, Executive agrees that, during the term of Executive's employment by the Company and for twenty four (24) months following the Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for any reason whatsoever, directly or indirectly, for himself or herself or on behalf of or in conjunction with any other Person with whom the Executive works or is affiliated:
(i) solicit and/or hire any Person who is on the Date of Termination, or has been within six (6) months prior to the Date of Termination, an employee of the Company or its affiliates;
(ii) solicit, induce or attempt to induce any Person who is, at the Date of Termination, or has been within six (6) months prior to the Date of Termination, an actual customer, client, business partner, or a prospective customer, client, business partner (i.e., a customer, client or business partner who is party to a written proposal (including, with respect to the Company's borrowers, a mortgage loan application) or letter of intent with the Company, in each case written less than six (6) months prior to the Date of Termination) of the Company, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates, (B) enticing or attempting to entice such Person to do
business with Executive or any affiliate of Executive, or (C) in any way interfering with the relationship between such Person and the Company or its affiliates; or
(iii) solicit, induce or attempt to induce any Person who
is or that is, at the time of the Date of Termination, or has been within six
(6) months prior to the Date of Termination, a supplier, licensee or consultant
of, or provider of goods or services to the Company or its affiliates, for the
purpose or with the intent of (A) inducing or attempting to induce such Person
to cease doing business with the Company or its affiliates or (B) in any way
interfering with the relationship between such Person and the Company or its
affiliates.
(c) Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, Executive agrees that the foregoing covenants in this Section 10, in addition to and not in limitation of any other rights, remedies or damages available to the Company at law, in equity or under this Agreement, shall be enforced by the Company in the event of the breach or threatened breach by Executive, by injunctions and/or restraining orders.
(d) It is agreed by the parties that the covenants contained in this Section 10 impose a fair and reasonable restraint on Executive in light of the activities and business of the Company on the date of the execution of this Agreement and the current plans of the Company; but it is also the intent of the Company and Executive that such covenants be construed and enforced in accordance with the changing activities, business and locations of the Company and its affiliates throughout the term of these covenants. Executive also acknowledges that this restraint will not prevent him from earning a living in his chosen field of work.
(e) The covenants in this Section 10 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth herein are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement shall thereby be reformed to reflect the same.
(f) All of the covenants in this Section 10 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of Executive against the Company whether predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of such covenants. It is specifically agreed that the duration of the period during which the agreements and covenants of Executive made in this Section 10 shall be effective shall be computed by excluding from such computation any time during which Executive is in violation of any provision of this Section 10.
(g) Notwithstanding any of the foregoing, if any applicable law,
judicial ruling or order shall reduce the time period during which Executive
shall be prohibited from engaging in any competitive activity described in
Section 10 hereof, the period of time for which Executive shall be prohibited
pursuant to Section 10 hereof shall be the maximum time permitted by law.
10. Successors; Binding Agreement. This Agreement shall be binding upon and inure to the benefit of successors and permitted assigns of the parties. This Agreement may not be assigned, nor may performance of any duty hereunder be delegated, by either party without the prior written consent of the other; provided, however, the Company may assign this Agreement to any successor to its business, including but not limited to in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or stock of the Company or similar transaction involving the Company or a successor corporation.
11. Additional Payments by the Company.
(a) If it is determined (as hereafter provided) that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any option, share appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then Executive will be entitled to receive an additional payment or payments (a "Gross-Up Payment") in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) All determinations required to be made under this Section 12, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by the Company's then current outside auditors; provided that if that firm is unwilling or unable to provide such services, another accounting firm may be selected by the Company (such accounting firm the "Accounting Firm"). The Company will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after the date of the change in control or the date of Executive's termination of employment, if applicable, and any other such time or times as may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive no later than five calendar days prior to the due date for Executive's income tax return on which the Excise Tax is included. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 12(f) hereof and Executive thereafter is required to make a payment of any Excise Tax, Executive shall so notify the Company, which will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.
(c) The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by Section 12(b) hereof.
(d) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. To the extent the Excise Tax has not been previously withheld from amounts paid to the Executive, Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Sections 12(b) and 12(d) hereof will be borne by the Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefore and reasonable evidence of his payment thereof.
(f) Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than ten (10) business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (x) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (y) the date that any payment of amount with respect to such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:
(i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;
(ii) take such action in connection with contesting such claim as the Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 12(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 12(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company will determine; provided, however, that if the Company directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(g) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, Executive receives any refund with respect to such claim, Executive will (subject to the Company's complying with the requirements of Section 12(f)) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, a determination is made that Executive will not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid pursuant to this Section 12. If, after the receipt by Executive of a Gross-Up Payment but before the payment by Executive of the Excise Tax, it is determined by the Accounting Firm that the Excise Tax payable by Executive is less than the amount originally computed by the Accounting Firm and consequently that the amount of the Gross-Up Payment is larger than that required by this Section 12, Executive shall promptly refund to the Company the amount by which the Gross-Up Payment initially made to Executive exceeds the Gross-Up Payment required under this Section 12.
12. Continued Performance. Provisions of this Agreement shall survive any
termination of Executive's employment hereunder if so provided herein or if
necessary or desirable fully to accomplish the purposes of such provisions,
including, without limitation, the obligations of the Executive under the terms
and conditions of Sections 9 and 10. Any obligation of the Company to make
payments to or on behalf of the Executive under Section 8 is expressly
conditioned upon the Executive's continued performance of the Executive's
obligations under Sections 9 and 10 for the time periods stated in Sections 9
and 10. The Executive recognizes that, except to the extent, if any, provided in
Section 8, the Executive will earn no compensation from the Company after the
Date of Termination.
13. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
David A. Akre
c/o New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
If to the Company:
New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
Attn: Compensation Committee
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer of the Company as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.
(a) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(b) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall deemed to be in an original but all of which together will constitute one and the same instrument.
(c) Disputes. Any dispute or controversy arising under or in connection with this Agreement shall, at the Executive's sole discretion, be settled exclusively by such judicial remedies as the Executive may seek to pursue or by arbitration conducted before a panel of three arbitrators in New York, New York in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction with respect to any violation or threatened violation of the provisions of Sections 9 or 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The expenses of arbitration shall be borne by the Company.
(d) Executive's Legal Expenses. In the event that the Executive institutes any proceeding to enforce his rights under, or to recover damages for breach of this Agreement, the Executive, if he is the prevailing party, shall be entitled to recover from the Company any actual expenses for attorney's fees and disbursements incurred by him.
(e) Indemnification. The Company shall indemnify and hold Executive harmless to the maximum extent permitted by the laws of the State of Maryland (and the law of any other appropriate jurisdiction after any reincorporation of the Company) against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by Executive, in connection with the defense of, or as a result of any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that he is or was an officer or trustee of the Company, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor (or other than by or in the right of the Company); provided, however, that this indemnification provision shall not apply to any action or proceeding relating to a dispute between the Company and the Executive based on any alleged breach or violation of this Agreement.
(f) Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein.
[Signatures next page]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
NEW YORK MORTGAGE TRUST, INC.
Attest:
By:_______________________________ By:____________________________________
Name:
Title:
DAVID A. AKRE
Attest:
By:_____________________________ _______________________________________
|
EXHIBIT 10.94
EMPLOYMENT AGREEMENT OF
RAYMOND A. REDLINGSHAFER, JR.
AGREEMENT made this ___ day of ______________, 2004, between New York Mortgage Trust, Inc., a Maryland corporation (the "Company"), and Raymond A. Redlingshafer, Jr. (the "Executive").
The Executive is presently employed as the President and Chief Investment Officer of the Company. The Board of Directors of the Company (the "Board") recognizes that the Executive's contribution to the growth and success of the Company has been substantial. The Board desires to provide for the continued employment of the Executive and to make certain changes in the Executive's employment arrangements with the Company which the Board has determined will reinforce and encourage the continued attention and dedication to the Company of the Executive as a member of the Company's management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to continue to serve the Company, on the terms and conditions herein provided. The Executive's continued employment with the Company is contingent on his execution of this Employment Agreement.
In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein.
2. Term. The employment of the Executive by the Company as provided in Section 1 will commence on the closing date of the Company's initial public offering and end on December 31, 2007, unless further extended or sooner terminated as hereinafter provided. Commencing on January 1, 2005, and each January 1 thereafter, the term of the Executive's employment shall automatically be extended for one additional calendar year, unless, not later than the October 31 immediately preceding such January 1, the Company or the Executive shall have given written notice to the other that it does not wish that the Term of this Agreement is to be automatically extended as described above. For purposes of this Agreement, "Term" shall mean the actual duration of Executive's employment hereunder, taking into account any extensions or notices not to extend pursuant to this Section 2 or termination of employment pursuant to Section 7.
3. Position and Duties. The Executive shall serve as the President and Chief Investment Officer of the Company and shall have such responsibilities, duties and authority as he may have as of the date hereof (or any position to which he may be promoted after the date hereof) and as may from time to time be assigned to the Executive by the Board that are consistent with such responsibilities, duties and authority. The Executive shall also serve as a senior executive officer of certain subsidiaries of the Company, with positions, titles and responsibilities that are suitable for the President and Chief Investment Officer of the Company, at the reasonable request of the
Board without additional compensation. The Executive shall devote substantially
all his working time and efforts to the business and affairs of the Company;
provided, that nothing in this Agreement shall preclude Executive from serving
as a director or trustee in any other firm or from pursuing personal real estate
investments and other personal investments, as long as such activities do not
interfere with Executive's performance of his duties hereunder or violate
Section 9 or 10 of this Agreement.
4. Place of Performance. In connection with the Executive's employment by the Company, the Executive shall be based at the principal executive offices of the Company in New York, New York, except for required travel on the Company's business to an extent substantially consistent with present business travel obligations.
5. Compensation and Related Matters.
(a) Base Salary. The Company shall pay the Executive a base salary
annually (the "Base Salary"), which shall be payable in periodic installments
according to the Company's normal payroll practices. The initial Base Salary
shall be $390,000. During the Terms, the Board or the Compensation Committee of
the Board (the "Compensation Committee") shall review the Base Salary at least
once a year to determine whether the Base Salary should be increased effective
the following January 1; provided, however, that on January 1, 2005, the initial
Base Salary shall be increased by 5%, and on each January 1 thereafter during
the Term, the Base Salary shall be increased by a minimum positive amount equal
to the Base Salary in effect on January 1 of the prior year multiplied by the
increase in the Consumer Price Index for such year. The amount of the increase
shall be determined before March 31 of each year and shall be retroactive to
January 1. The Base Salary, including any increases, shall not be decreased
during the Term. For purposes of this Agreement, the term "Base Salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 6(a).
(b) Annual Cash Incentive Awards. The Executive shall be eligible to
participate in the Company's annual cash incentive bonus plan adopted by the
Compensation Committee for each fiscal year during the Term of this Agreement
("Bonus Plan"), subject to the terms and conditions of the Bonus Plan. If the
Executive or the Company, as the case may be, satisfies the performance criteria
contained in such Bonus Plan for a fiscal year, he shall receive an annual
Incentive Bonus (as defined below) in an amount determined by the Compensation
Committee and subject to ratification by the Board, if required. If the
Executive or the Company, as the case may be, fails to satisfy the performance
criteria contained in such Bonus Plan for a fiscal year, the Compensation
Committee may determine whether any Incentive Bonus shall be payable to
Executive for that year, subject to ratification by the Board, if required.
Beginning January 1, 2005, the Bonus Plan shall contain both individual and
group goals established by the Compensation Committee. The annual Incentive
Bonus shall be paid to the Executive no later than thirty (30) days after the
date the Compensation Committee determines whether the criteria in the Bonus
Plan for such fiscal year were satisfied. For purposes of this Agreement, the
term "Incentive Bonus" shall mean the amount established pursuant to this
Section 6(b).
(c) Stock Based Awards. The Company has established the 2004 Stock Incentive Plan ("Stock Incentive Plan"). Subject to the terms and conditions of the Stock Incentive Plan,
the Executive shall be eligible to participate in the Stock Incentive Plan, and shall be eligible to receive annual stock option and/or restricted stock awards under the Stock Incentive Plan. The Compensation Committee shall approve any such awards made to the Executive pursuant to the Stock Incentive Plan.
(i) 2004 Stock Incentive Plan Option Grants. Option awards under the
Stock Incentive Plan will have an exercise price per share equal to the closing
price of the Company's common stock on the trading day immediately preceding the
date of grant, will have a term of ten (10) years and will vest and become
exercisable with respect to 1/3 of the underlying shares of Company common stock
on the first, second and third anniversaries, respectively, of the date of
grant; provided, however, that the Executive will be 100% vested in all
outstanding option awards, including the unvested portion of such awards, upon
(i) a Change in Control (as defined herein), (ii) a termination by the Company
without Cause (as defined herein), (iii) a termination by the Executive for Good
Reason (as defined herein), (iv) the Executive's death, or (v) the Disability
(as defined below) of the Executive, and that the Executive will forfeit all
unvested options if he is terminated for Cause or he terminates his employment
hereunder for other than Good Reason.
(ii) 2004 Stock Incentive Plan Restricted Stock Awards. The Stock Incentive Plan provides for the issuance of shares of Company common stock as restricted common stock ("Restricted Stock Grants") to the extent that such shares of common stock are available thereunder. Restricted Stock Grants awarded to the Executive shall be subject to forfeiture restrictions that will terminate with respect to 1/3 of the awarded shares on the first, second and third anniversaries of the date of the issuance; provided, however, that with respect to the Initial Restricted Stock Grant (as defined below), 33.3% of such shares will be fully vested and unrestricted upon issuance and the forfeiture restrictions with respect to the remaining 66.7% of such shares will terminate with respect to 22.3% of the awarded shares on the first anniversary of the date of issuance, 22.2% of the awarded shares on the second anniversary of the date of issuance and 22.2% of the awarded shares on the third anniversary of the date of issuance. Upon completion of the Company's initial public offering of its common stock (the "IPO"), the Company shall grant to the Executive a Restricted Stock Grant of 94,860 shares of Company common stock (the "Initial Restricted Stock Grant"). In the event the underwriters in the IPO exercise their over-allotment option, the Company shall promptly increase the number of shares of Company common stock granted to the Executive in the Initial Restricted Stock Grant by a percentage equal to the percentage of over-allotment option shares issued relative to the number of initial shares issued in the IPO, e.g. if the underwriters exercise their full 15% over-allotment option, the Company will increase the Initial Restricted Stock Grant by 14,229 shares, or 15%, and there additional shares of common stock will be deemed to be part of the Initial Restricted Stock Grant. Notwithstanding the foregoing, the Executive will be 100% vested and all restrictions on each outstanding Restricted Stock Grant will lapse upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) a termination by the Executive for Good Reason (as defined herein), (iv) the Executive's death, (v) the Disability (as defined below) of the Executive, or (vi) the Company's failure to renew this Agreement, and that the Executive will forfeit all shares with respect to which the forfeiture restrictions have not terminated if he is terminated for Cause or he terminates for other than
Good Reason. The common stock issued as Restricted Stock Grants will have voting and dividend rights.
For purposes of this Agreement:
"Acquiring Person" means that a Person, considered alone or as part of a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is or becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing at least fifty percent (50%) of the Company's then outstanding securities entitled to vote generally in the election of the Board.
"Continuing Director" means any member of the Board, while a member of the Board and (i) who was a member of the Board on the closing date of the Company's initial public offering of the Common Stock or (ii) whose nomination for or election to the Board was recommended or approved by a majority of the Continuing Directors.
"Control Change Date" means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the "Control Change Date" is the date of the last of such transactions.
"Change in Control" means (i) a Person is or becomes an Acquiring Person;
(ii) holders of the securities of the Company entitled to vote thereon approve
any agreement with a Person (or, if such approval is not required by applicable
law and is not solicited by the Company, the closing of such an agreement) that
involves the transfer of all or substantially all of the Company's total assets
on a consolidated basis, as reported in the Company's consolidated financial
statements filed with the Securities and Exchange Commission; (iii) holders of
the securities of the Company entitled to vote thereon approve a transaction
(or, if such approval is not required by applicable law and is not solicited by
the Company, the closing of such a transaction) pursuant to which the Company
will undergo a merger, consolidation, or statutory share exchange with a Person,
regardless of whether the Company is intended to be the surviving or resulting
entity after the merger, consolidation, or statutory share exchange, other than
a transaction that results in the voting securities of the Company carrying the
right to vote in elections of persons to the Board outstanding immediately prior
to the closing of the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% (fifty percent) of the Company's voting securities carrying
the right to vote in elections of persons to the Company's Board, or such
securities of such surviving entity, outstanding immediately after the closing
of such transaction; (iv) the Continuing Directors cease for any reason to
constitute a majority of the Board; (v) holders of the securities of the Company
entitled to vote thereon approve a plan of complete liquidation of the Company
or an agreement for the sale or liquidation by the Company of all or
substantially all of the Company's assets (or, if such approval is not required
by applicable law and is not solicited by the Company, the commencement of
actions constituting such a plan or the closing of such an agreement); or (vi)
the Board adopts a resolution to the effect that, in its judgment, as a
consequence of any one or more transactions or events or series of transactions
or events, a Change in Control of the Company has effectively occurred. The
Board shall be entitled to exercise its sole and absolute discretion in
exercising its judgment and in the adoption of such
resolution, whether or not any such transaction(s) or event(s) might be deemed, individually or collectively, to satisfy any of the criteria set forth in subparagraphs (i) through (v) above.
"Person" means any human being, firm, corporation, partnership, or other entity. "Person" also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term "Person" does not include the Company or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Company or any Related Entity, or any person or entity organized, appointed, or established by the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan, unless the Board determines that such an employee-benefit plan or such person or entity is a "Person".
"Related Entity" means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code.
(d) Benefits.
(i) Vacation. The Executive shall be entitled to four (4) weeks of paid vacation per full calendar year. The Executive shall be entitled to cash in lieu of any unused vacation time. The Executive shall not be entitled to carry over any unused vacation time from year to year.
(ii) Sick and Personal Days. The Executive shall be entitled to sick and personal days in accordance with the policies of the Company.
(iii) Employee Benefits.
(A) Participation in Employee Benefit Plans. Subject to the terms of any applicable plans, policies or programs, the Executive and his spouse and eligible dependents, if any, and their respective designated beneficiaries where applicable, will be eligible for and entitled to participate in any Company sponsored employee benefit plans, including but not limited to benefits such as group health, dental, accident, disability insurance, group life insurance, and a 401(k) plan, as such benefits may be offered from time to time, on a basis no less favorable than that applicable to other executives of the Company.
(B) Disability Insurance. The Company will maintain, at its cost, a renewable long-term Disability plan that, subject to the terms of such plan and any applicable plans, policies or programs, provides for payment of not less than 60% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues. In addition, the Company shall reimburse the Executive the amount of the premiums payable by the Executive with respect to a personal supplemental long-term disability insurance policy providing for benefits equal to at least 40% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues.
(iv) Annual Physical. If the Executive desires an annual physical examination, the Company shall provide, at its cost, a medical examination for the Executive on an annual
basis by a licensed physician in the New York, New York metropolitan area selected by the Executive. The results of the examination and any medical information or records regarding the examination will be provided by the physician to the executive, and not to the Company.
(v) Directors and Officers Insurance. During the Term and for a period of 24 months thereafter, the Executive shall be entitled to director and officer insurance coverage for his acts and omissions while an officer and director of the Company on a basis no less favorable to him than the coverage provided to current officers and directors.
(vi) Life Insurance. The Company will purchase a whole life policy for the benefit of the Executive or the Executive's designated beneficiaries with a death benefit of $3.0 million. The Executive shall be entitled to reimbursement of any income tax that the Executive incurs with respect to the Company's payment of premiums.
(vii) Key Man Life Insurance. The Company may purchase on the life of the Executive up to $15.0 million of key man life insurance with the Company as the beneficiary of the death benefit.
(viii) Expenses, Office and Secretarial Support. The Executive shall be entitled to reimbursement of all reasonable expenses, in accordance with the Company's policy as in effect from time to time and on a basis no less favorable than that applicable to other executives of the Company, including, without limitation, telephone, reasonable travel and reasonable entertainment expenses incurred by the Executive in connection with the business of the Company, promptly upon the presentation by the Executive of appropriate documentation. The Executive shall also be entitled to appropriate office space, administrative support, and such other facilities and services as are suitable to the Executive's positions and adequate for the performance of the Executive's duties.
6. Termination. The Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, in the written opinion of a qualified physician reasonably agreed to by the Company and the Executive, the Executive shall become unable to perform his duties hereunder due to Disability, the Company may terminate the Executive's employment hereunder. As used in this Agreement, the term "Disability" shall mean inability of the Executive, due to physical or mental condition, to perform the essential functions of the Executive's job, after consideration of the availability of reasonable accommodations, for more than 180 total calendar days during any period of 12 consecutive months.
(c) For Cause. The Company may terminate the Executive's employment hereunder for Cause. For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon a determination by at least a majority of the members of the Board (other than Executive) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive of such meeting, the purpose thereof and the
particulars of the basis for such meeting and the Executive is given an
opportunity, together with counsel, to be heard before the Board) that Executive
(i) has committed fraud or misappropriated, stolen or embezzled funds or
property from the Company or an affiliate of the Company or secured or attempted
to secure personally any profit in connection with any transaction entered into
on behalf of the Company or any affiliate of the Company, (ii) has been
convicted of, or entered a plea of guilty or "nolo contendre" to, a felony which
in the reasonable opinion of the Board brings Executive into disrepute or is
likely to cause material harm to the Company's (or any affiliate of the Company)
business, customer or supplier relations, financial condition or prospects,
(iii) has, notwithstanding not less than 30 days' prior written notice from the
Board, willfully failed to perform (other than by reason of illness or temporary
disability ) his material duties hereunder, (iv) has knowingly violated or
breached any material law or regulation to the material detriment of the Company
or any affiliates of the Company or its business, or (v) has breached any
non-competition, non-disclosure or non-solicitation agreement between Executive
and the Company which causes or is reasonably likely to cause material harm to
the Company. For purposes of this provision, no act or failure to act, on the
part of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that his action or omission was in the best interests of the Company. Any act,
or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. Any notice of termination
delivered by the Company to Executive that purports to notify Executive of a
termination for Cause, but where the Company has not otherwise followed the
procedures set forth in the definition of "Cause" above, shall be deemed to
constitute a notice of termination without Cause pursuant to Section 7(d)
hereof. Neither a notice from the Company to Executive that a meeting of the
Board has been scheduled to determine whether grounds for a termination for
"Cause" exist, nor the holding of such a meeting, shall itself be construed as a
notice of termination for such purpose.
(d) Without Cause. The Company may at any time terminate the Executive's employment hereunder without Cause.
(e) Termination by the Executive.
(i) The Executive may terminate his employment hereunder (A) for Good Reason, (B) at any time upon 30 days written notice following receipt by the Executive of written notification by the Company that it does not intend to extend the Term of this Agreement as provided in Section 2 (a "Notice of Non-Renewal"), or (C) at any time after the date hereof by giving sixty (60) days prior notice of his intention to terminate.
(ii) For purposes of this Agreement, "Good Reason" shall mean (A) a
failure by the Company to comply with any material provision of this Agreement
(other than the Company's payment obligations referred to in clause (E) below)
which has not been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Company, (B) the assignment
to the Executive of any material duties inconsistent with the Executive's
position with the Company or a substantial adverse alteration in the nature or
status of the Executive's responsibilities without the consent of the Executive,
(C) without the consent
of the Executive, a material reduction in employee benefits other than a reduction generally applicable to similarly situated executives of the Company, (D) without the consent of the Executive, relocation of the Company's principal place of business outside a fifty (50) mile radius of Midtown Manhattan, or (E) any failure by the Company to pay the Executive Base Salary or any Incentive Bonus to which he is entitled under the Bonus Plan which failure has not been cured within ten (10) days after notice of such noncompliance has been given by the Executive to the Company or any failure of the Compensation Committee to approve a Bonus Plan for any fiscal year.
(f) Any termination of the Executive's employment by the Company or by the
Executive (other than termination pursuant to subsection (a) or (b) of this
Section 7) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 14. 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 the Executive's employment under the provision so indicated.
(g) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated pursuant to subsection (b) above, the date as of which the physician's written opinion is received by the Company, (iii) if the Executive's employment is terminated pursuant to subsection (c) above, the date specified in the Notice of Termination, and (iv) if the Executive's employment is terminated for any other reason, the date sixty (60) days following the date on which a Notice of Termination is given.
7. Compensation Upon Termination, Death or During Disability.
(a) Disability. During any period that the Executive fails to perform his
duties hereunder as a result of his incapacity due to a physical or mental
condition ("disability period"), the Executive shall continue to receive his
full Base Salary at the rate then in effect for such disability period (and
shall not be eligible for payments under the disability plans, programs and
policies maintained by the Company or in connection with employment by the
Company ("Disability Plans")) until his employment is terminated pursuant to
Section 7(b) hereof, and upon such termination, the Executive shall, within ten
(10) days of such termination, be entitled to all amounts to which the Executive
is entitled pursuant to the Disability Plans. The Executive's rights under any
long-term Disability Plan shall be determined in accordance with the provisions
of such plan, but in no event will the Company maintain a long-term Disability
plan that provides for payment of less than 60% of the Executive's Base Salary.
In addition, upon the Executive's termination in accordance with Section 7(b)
hereof, all stock options, restricted stock grants awards and any other equity
awards granted by the Company to the Executive shall become fully vested,
unrestricted and exercisable as of the Date of Termination.
(b) Death. If the Executive's employment is terminated by his death, the Company shall within ten (10) days following the date of the Executive's death, pay to the Executive's designated beneficiary(ies) any amounts due to the Executive under Section 6(d) through the date of and as a result of his death, an amount equal to the Executive's annual Base Salary for the year
in which the termination took place, and an amount equal to the Executive's target Bonus for the year in which the termination took place, together with any other amounts to which the Executive is entitled pursuant to death benefit plans, programs and policies. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination.
(c) Cause or other than Good Reason. If the Executive's employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and reimburse the Executive for all reasonable and customary expenses incurred by the Executive in performing services hereunder prior to the Date of Termination in accordance with Section 6(d), and the Company shall have no further obligations to the Executive under this Agreement.
(d) Termination by the Company without Cause (other than for death or Disability) or Termination by the Executive for Good Reason. If the Company shall terminate the Executive's employment other than for death, Disability pursuant to Section 7(b) or Cause, or the Executive shall terminate his employment for Good Reason, then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the product of (A) the sum of (1) the Executive's Base Salary in effect as of the Date of Termination and (2) the Executive's highest Annual Bonus earned in the last three fiscal years, and (B) the lesser of three (3) or the quotient of the number of whole months remaining in the term of this Agreement as of the Date of Termination divided by twelve (12); such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) In the case of a termination of the Executive's employment by the Company without Cause or for Disability, or by the Executive for Good Reason, the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with
benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(d)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
(e) Upon Receipt by the Executive of a Notice of Non-Renewal. If the Company delivers to the Executive a Notice of Non-Renewal, and the Executive elects to terminate his employment with the Company as a result of such Notice of Non-Renewal pursuant to Section 7(e)(i)(B), then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the sum of (A) an amount equal to the Executive's annual Base Salary as then in effect and (B) an amount equal to the Executive's highest Annual Bonus earned during the preceding three fiscal years; such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(e)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
8. Nondisclosure. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or
any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. The agreement made in this Section 9 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law or by separate agreement upon the Executive in respect of confidential information of the Company.
9. Non-Competition and Non-Solicitation. During the Executive's employment with the Company and for a period of twenty four (24) months following the Executive's Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for himself or herself or on behalf of or in conjunction with any other person, persons, company, firm, partnership, corporation, business, group or other entity (each, a "Person"), work in the principal line of business engaged in, or planned to be engaged in, by the Company at the Date of Termination within any state where the Company is doing business or has plans for commencing business as of the Date of Termination. The Executive's passive ownership of less than five percent (5%) of the securities of a public company shall not be treated as an action in competition with the Company.
(a) Executive hereby acknowledges and agrees that his employment with the Company places him in a position of trust and confidence with respect to the business operations, customers, prospects and personnel of the Company. He agrees that, due to his position and knowledge, his engaging in any business that competes in the principal line of business as the Company will cause the Company significant and irreparable harm.
(b) In consideration of the compensation and benefits extended to him under this Agreement, Executive agrees that, during the term of Executive's employment by the Company and for twenty four (24) months following the Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for any reason whatsoever, directly or indirectly, for himself or herself or on behalf of or in conjunction with any other Person with whom the Executive works or is affiliated:
(i) solicit and/or hire any Person who is on the Date of Termination, or has been within six (6) months prior to the Date of Termination, an employee of the Company or its affiliates;
(ii) solicit, induce or attempt to induce any Person who is, at the Date of Termination, or has been within six (6) months prior to the Date of Termination, an actual customer, client, business partner, or a prospective customer, client, business partner (i.e., a customer, client or business partner who is party to a written proposal (including, with respect to the Company's borrowers, a mortgage loan application) or letter of intent with the Company, in
each case written less than six (6) months prior to the Date of Termination) of the Company, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates, (B) enticing or attempting to entice such Person to do business with Executive or any affiliate of Executive, or (C) in any way interfering with the relationship between such Person and the Company or its affiliates; or
(iii) solicit, induce or attempt to induce any Person who is or that is, at the time of the Date of Termination, or has been within six (6) months prior to the Date of Termination, a supplier, licensee or consultant of, or provider of goods or services to the Company or its affiliates, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates or (B) in any way interfering with the relationship between such Person and the Company or its affiliates.
(c) Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, Executive agrees that the foregoing covenants in this Section 10, in addition to and not in limitation of any other rights, remedies or damages available to the Company at law, in equity or under this Agreement, shall be enforced by the Company in the event of the breach or threatened breach by Executive, by injunctions and/or restraining orders.
(d) It is agreed by the parties that the covenants contained in this
Section 10 impose a fair and reasonable restraint on Executive in light of the
activities and business of the Company on the date of the execution of this
Agreement and the current plans of the Company; but it is also the intent of the
Company and Executive that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the Company
and its affiliates throughout the term of these covenants. Executive also
acknowledges that this restraint will not prevent him from earning a living in
his chosen field of work.
(e) The covenants in this Section 10 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth herein are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement shall thereby be reformed to reflect the same.
(f) All of the covenants in this Section 10 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of Executive against the Company whether predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of such covenants. It is specifically agreed that the duration of the period during which the agreements and covenants of Executive made in this Section 10 shall be effective shall be computed by excluding from such computation any time during which Executive is in violation of any provision of this Section 10.
(g) Notwithstanding any of the foregoing, if any applicable law, judicial ruling or order shall reduce the time period during which Executive shall be prohibited from engaging in
any competitive activity described in Section 10 hereof, the period of time for which Executive shall be prohibited pursuant to Section 10 hereof shall be the maximum time permitted by law.
10. Successors; Binding Agreement. This Agreement shall be binding upon and inure to the benefit of successors and permitted assigns of the parties. This Agreement may not be assigned, nor may performance of any duty hereunder be delegated, by either party without the prior written consent of the other; provided, however, the Company may assign this Agreement to any successor to its business, including but not limited to in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or stock of the Company or similar transaction involving the Company or a successor corporation.
11. Additional Payments by the Company.
(a) If it is determined (as hereafter provided) that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any option, share appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then Executive will be entitled to receive an additional payment or payments (a "Gross-Up Payment") in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) All determinations required to be made under this Section 12, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by the Company's then current outside auditors; provided that if that firm is unwilling or unable to provide such services, another accounting firm may be selected by the Company (such accounting firm the "Accounting Firm"). The Company will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after the date of the change in control or the date of Executive's termination of employment, if applicable, and any other such time or times as may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive no later than five calendar days prior to the due date for Executive's income tax return on which the Excise Tax is included. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility
of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 12(f) hereof and Executive thereafter is required to make a payment of any Excise Tax, Executive shall so notify the Company, which will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.
(c) The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by Section 12(b) hereof.
(d) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. To the extent the Excise Tax has not been previously withheld from amounts paid to the Executive, Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Sections 12(b) and 12(d) hereof will be borne by the Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefore and reasonable evidence of his payment thereof.
(f) Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than ten (10) business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (x) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (y) the date that any payment of amount with respect to
such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:
(i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;
(ii) take such action in connection with contesting such claim as the Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 12(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 12(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company will determine; provided, however, that if the Company directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(g) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, Executive receives any refund with respect to such claim, Executive will (subject to the Company's complying with the requirements of Section 12(f)) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, a determination is made that Executive will not be entitled to any refund with respect to such claim and the Company does not
notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid pursuant to this Section 12. If, after the receipt by Executive of a Gross-Up Payment but before the payment by Executive of the Excise Tax, it is determined by the Accounting Firm that the Excise Tax payable by Executive is less than the amount originally computed by the Accounting Firm and consequently that the amount of the Gross-Up Payment is larger than that required by this Section 12, Executive shall promptly refund to the Company the amount by which the Gross-Up Payment initially made to Executive exceeds the Gross-Up Payment required under this Section 12.
12. Continued Performance. Provisions of this Agreement shall survive any
termination of Executive's employment hereunder if so provided herein or if
necessary or desirable fully to accomplish the purposes of such provisions,
including, without limitation, the obligations of the Executive under the terms
and conditions of Sections 9 and 10. Any obligation of the Company to make
payments to or on behalf of the Executive under Section 8 is expressly
conditioned upon the Executive's continued performance of the Executive's
obligations under Sections 9 and 10 for the time periods stated in Sections 9
and 10. The Executive recognizes that, except to the extent, if any, provided in
Section 8, the Executive will earn no compensation from the Company after the
Date of Termination.
13. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Raymond A. Redlingshafer, Jr.
c/o New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
If to the Company:
New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
Attn: Compensation Committee
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer of the Company as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.
(a) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(b) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall deemed to be in an original but all of which together will constitute one and the same instrument.
(c) Disputes. Any dispute or controversy arising under or in connection with this Agreement shall, at the Executive's sole discretion, be settled exclusively by such judicial remedies as the Executive may seek to pursue or by arbitration conducted before a panel of three arbitrators in New York, New York in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction with respect to any violation or threatened violation of the provisions of Sections 9 or 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The expenses of arbitration shall be borne by the Company.
(d) Executive's Legal Expenses. In the event that the Executive institutes any proceeding to enforce his rights under, or to recover damages for breach of this Agreement, the Executive, if he is the prevailing party, shall be entitled to recover from the Company any actual expenses for attorney's fees and disbursements incurred by him.
(e) Indemnification. The Company shall indemnify and hold Executive harmless to the maximum extent permitted by the laws of the State of Maryland (and the law of any other appropriate jurisdiction after any reincorporation of the Company) against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by Executive, in connection with the defense of, or as a result of any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that he is or was an officer or trustee of the Company, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor (or other than by or in the right of the Company); provided, however, that this indemnification provision shall not apply to any action or proceeding relating to a dispute
between the Company and the Executive based on any alleged breach or violation of this Agreement.
(f) Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein.
[Signatures next page]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
NEW YORK MORTGAGE TRUST, INC.
Attest:
By:_____________________________ By:______________________________________
Name:
Title:
RAYMOND A. REDLINGSHAFER, JR.
Attest:
By:_____________________________ _________________________________________
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EXHIBIT 10.95
EMPLOYMENT AGREEMENT OF
MICHAEL I. WIRTH
AGREEMENT made this ___ day of _________, 2004, between New York Mortgage Trust, Inc., a Maryland corporation (the "Company"), and Michael I. Wirth (the "Executive").
The Executive is presently employed as the Chief Financial Officer of the Company. The Board of Directors of the Company (the "Board") recognizes that the Executive's contribution to the growth and success of the Company has been substantial. The Board desires to provide for the continued employment of the Executive and to make certain changes in the Executive's employment arrangements with the Company which the Board has determined will reinforce and encourage the continued attention and dedication to the Company of the Executive as a member of the Company's management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to continue to serve the Company, on the terms and conditions herein provided. The Executive's continued employment with the Company is contingent on his execution of this Employment Agreement.
In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein.
2. Term. The employment of the Executive by the Company as provided in
Section 1 will commence on the closing date of the Company's initial public
offering and end on December 31, 2007, unless further extended or sooner
terminated as hereinafter provided. Commencing on January 1, 2005, and each
January 1 thereafter, the term of the Executive's employment shall automatically
be extended for one additional calendar year, unless, not later than the October
31 immediately preceding such January 1, the Company or the Executive shall have
given written notice to the other that it does not wish that the Term of this
Agreement is to be automatically extended as described above. For purposes of
this Agreement, "Term" shall mean the actual duration of Executive's employment
hereunder, taking into account any extensions or notices not to extend pursuant
to this Section 2 or termination of employment pursuant to Section 7.
3. Position and Duties. The Executive shall serve as the Chief Financial Officer of the Company and shall have such responsibilities, duties and authority as he may have as of the date hereof (or any position to which he may be promoted after the date hereof) and as may from time to time be assigned to the Executive by the Board that are consistent with such responsibilities, duties and authority. The Executive shall also serve as a senior executive officer of certain subsidiaries of the Company, with positions, titles and responsibilities that are suitable for the Chief Financial Officer of the Company, at the reasonable request of the Board without additional compensation. The Executive shall devote substantially all his working time and
efforts to the business and affairs of the Company; provided, that nothing in this Agreement shall preclude Executive from serving as a director or trustee in any other firm or from pursuing personal real estate investments and other personal investments, as long as such activities do not interfere with Executive's performance of his duties hereunder or violate Section 9 or 10 of this Agreement.
4. Place of Performance. In connection with the Executive's employment by the Company, the Executive shall be based at the principal executive offices of the Company in New York, New York, except for required travel on the Company's business to an extent substantially consistent with present business travel obligations.
5. Compensation and Related Matters.
(a) Base Salary. The Company shall pay the Executive a base salary
annually (the "Base Salary"), which shall be payable in periodic installments
according to the Company's normal payroll practices. The initial Base Salary
shall be $320,000. During the Terms, the Board or the Compensation Committee of
the Board (the "Compensation Committee") shall review the Base Salary at least
once a year to determine whether the Base Salary should be increased effective
the following January 1; provided, however, that on January 1, 2005, the initial
Base Salary shall be increased by 5%, and on each January 1 thereafter during
the Term, the Base Salary shall be increased by a minimum positive amount equal
to the Base Salary in effect on January 1 of the prior year multiplied by the
increase in the Consumer Price Index for such year. The amount of the increase
shall be determined before March 31 of each year and shall be retroactive to
January 1. The Base Salary, including any increases, shall not be decreased
during the Term. For purposes of this Agreement, the term "Base Salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 6(a).
(b) Annual Cash Incentive Awards. The Executive shall be eligible to
participate in the Company's annual cash incentive bonus plan adopted by the
Compensation Committee for each fiscal year during the Term of this Agreement
("Bonus Plan"), subject to the terms and conditions of the Bonus Plan. If the
Executive or the Company, as the case may be, satisfies the performance criteria
contained in such Bonus Plan for a fiscal year, he shall receive an annual
Incentive Bonus (as defined below) in an amount determined by the Compensation
Committee and subject to ratification by the Board, if required. If the
Executive or the Company, as the case may be, fails to satisfy the performance
criteria contained in such Bonus Plan for a fiscal year, the Compensation
Committee may determine whether any Incentive Bonus shall be payable to
Executive for that year, subject to ratification by the Board, if required.
Beginning January 1, 2005, the Bonus Plan shall contain both individual and
group goals established by the Compensation Committee. The annual Incentive
Bonus shall be paid to the Executive no later than thirty (30) days after the
date the Compensation Committee determines whether the criteria in the Bonus
Plan for such fiscal year were satisfied. For purposes of this Agreement, the
term "Incentive Bonus" shall mean the amount established pursuant to this
Section 6(b).
(c) Stock Based Awards. The Company has established the 2004 Stock Incentive Plan ("Stock Incentive Plan"). Subject to the terms and conditions of the Stock Incentive Plan, the Executive shall be eligible to participate in the Stock Incentive Plan, and shall be eligible to
receive annual stock option and/or restricted stock awards under the Stock Incentive Plan. The Compensation Committee shall approve any such awards made to the Executive pursuant to the Stock Incentive Plan.
(i) 2004 Stock Incentive Plan Option Grants. Option awards under
the Stock Incentive Plan will have an exercise price per share equal to the
closing price of the Company's common stock on the trading day immediately
preceding the date of grant, will have a term of ten (10) years and will vest
and become exercisable with respect to 1/3 of the underlying shares of Company
common stock on the first, second and third anniversaries, respectively, of the
date of grant; provided, however, that the Executive will be 100% vested in all
outstanding option awards, including the unvested portion of such awards, upon
(i) a Change in Control (as defined herein), (ii) a termination by the Company
without Cause (as defined herein), (iii) a termination by the Executive for Good
Reason (as defined herein), (iv) the Executive's death, or (v) the Disability
(as defined below) of the Executive, and that the Executive will forfeit all
unvested options if he is terminated for Cause or he terminates his employment
hereunder for other than Good Reason.
(ii) 2004 Stock Incentive Plan Restricted Stock Awards. The Stock Incentive Plan provides for the issuance of shares of Company common stock as restricted common stock ("Restricted Stock Grants") to the extent that such shares of common stock are available thereunder. Restricted Stock Grants awarded to the Executive shall be subject to forfeiture restrictions that will terminate with respect to 1/3 of the awarded shares on the first, second and third anniversaries of the date of the issuance; provided, however, that with respect to the Initial Restricted Stock Grant (as defined below), 33.3% of such shares will be fully vested and unrestricted upon issuance and the forfeiture restrictions with respect to the remaining 66.7% of such shares will terminate with respect to 22.3% of the awarded shares on the first anniversary of the date of issuance, 22.2% of the awarded shares on the second anniversary of the date of issuance and 22.2% of the awarded shares on the third anniversary of the date of issuance. Upon completion of the Company's initial public offering of its common stock (the "IPO"), the Company shall grant to the Executive a Restricted Stock Grant of 73,837 shares of Company common stock (the "Initial Restricted Stock Grant"). In the event the underwriters in the IPO exercise their over-allotment option, the Company shall promptly increase the number of shares of Company common stock granted to the Executive in the Initial Restricted Stock Grant by a percentage equal to the percentage of over-allotment option shares issued relative to the number of initial shares issued in the IPO, e.g. if the underwriters exercise their full 15% over-allotment option, the Company will increase the Initial Restricted Stock Grant by 11,076 shares, or 15%, and there additional shares of common stock will be deemed to be part of the Initial Restricted Stock Grant. Notwithstanding the foregoing, the Executive will be 100% vested and all restrictions on each outstanding Restricted Stock Grant will lapse upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) a termination by the Executive for Good Reason (as defined herein), (iv) the Executive's death, (v) the Disability (as defined below) of the Executive, or (vi) the Company's failure to renew this Agreement, and that the Executive will forfeit all shares with respect to which the forfeiture restrictions have not terminated if he is terminated for Cause or he terminates for other than Good Reason. The common stock issued as Restricted Stock Grants will have voting and dividend rights.
For purposes of this Agreement:
"Acquiring Person" means that a Person, considered alone or as part of a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is or becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing at least fifty percent (50%) of the Company's then outstanding securities entitled to vote generally in the election of the Board.
"Continuing Director" means any member of the Board, while a member of the Board and (i) who was a member of the Board on the closing date of the Company's initial public offering of the Common Stock or (ii) whose nomination for or election to the Board was recommended or approved by a majority of the Continuing Directors.
"Control Change Date" means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the "Control Change Date" is the date of the last of such transactions.
"Change in Control" means (i) a Person is or becomes an Acquiring Person;
(ii) holders of the securities of the Company entitled to vote thereon approve
any agreement with a Person (or, if such approval is not required by applicable
law and is not solicited by the Company, the closing of such an agreement) that
involves the transfer of all or substantially all of the Company's total assets
on a consolidated basis, as reported in the Company's consolidated financial
statements filed with the Securities and Exchange Commission; (iii) holders of
the securities of the Company entitled to vote thereon approve a transaction
(or, if such approval is not required by applicable law and is not solicited by
the Company, the closing of such a transaction) pursuant to which the Company
will undergo a merger, consolidation, or statutory share exchange with a Person,
regardless of whether the Company is intended to be the surviving or resulting
entity after the merger, consolidation, or statutory share exchange, other than
a transaction that results in the voting securities of the Company carrying the
right to vote in elections of persons to the Board outstanding immediately prior
to the closing of the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% (fifty percent) of the Company's voting securities carrying
the right to vote in elections of persons to the Company's Board, or such
securities of such surviving entity, outstanding immediately after the closing
of such transaction; (iv) the Continuing Directors cease for any reason to
constitute a majority of the Board; (v) holders of the securities of the Company
entitled to vote thereon approve a plan of complete liquidation of the Company
or an agreement for the sale or liquidation by the Company of all or
substantially all of the Company's assets (or, if such approval is not required
by applicable law and is not solicited by the Company, the commencement of
actions constituting such a plan or the closing of such an agreement); or (vi)
the Board adopts a resolution to the effect that, in its judgment, as a
consequence of any one or more transactions or events or series of transactions
or events, a Change in Control of the Company has effectively occurred. The
Board shall be entitled to exercise its sole and absolute discretion in
exercising its judgment and in the adoption of such resolution, whether or not
any such transaction(s) or event(s) might be deemed, individually or
collectively, to satisfy any of the criteria set forth in subparagraphs (i)
through (v) above.
"Person" means any human being, firm, corporation, partnership, or other entity. "Person" also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term "Person" does not include the Company or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Company or any Related Entity, or any person or entity organized, appointed, or established by the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan, unless the Board determines that such an employee-benefit plan or such person or entity is a "Person".
"Related Entity" means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code.
(d) Benefits.
(i) Vacation. The Executive shall be entitled to four (4) weeks of paid vacation per full calendar year. The Executive shall be entitled to cash in lieu of any unused vacation time. The Executive shall not be entitled to carry over any unused vacation time from year to year.
(ii) Sick and Personal Days. The Executive shall be entitled to sick and personal days in accordance with the policies of the Company.
(iii) Employee Benefits.
(A) Participation in Employee Benefit Plans. Subject to the terms of any applicable plans, policies or programs, the Executive and his spouse and eligible dependents, if any, and their respective designated beneficiaries where applicable, will be eligible for and entitled to participate in any Company sponsored employee benefit plans, including but not limited to benefits such as group health, dental, accident, disability insurance, group life insurance, and a 401(k) plan, as such benefits may be offered from time to time, on a basis no less favorable than that applicable to other executives of the Company.
(B) Disability Insurance. The Company will maintain, at its cost, a renewable long-term Disability plan that, subject to the terms of such plan and any applicable plans, policies or programs, provides for payment of not less than 60% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues. In addition, the Company shall reimburse the Executive the amount of the premiums payable by the Executive with respect to a personal supplemental long-term disability insurance policy providing for benefits equal to at least 40% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues.
(iv) Annual Physical. If the Executive desires an annual physical examination, the Company shall provide, at its cost, a medical examination for the Executive on an annual basis by a licensed physician in the New York, New York metropolitan area selected by the
Executive. The results of the examination and any medical information or records regarding the examination will be provided by the physician to the executive, and not to the Company.
(v) Directors and Officers Insurance. During the Term and for a period of 24 months thereafter, the Executive shall be entitled to director and officer insurance coverage for his acts and omissions while an officer and director of the Company on a basis no less favorable to him than the coverage provided to current officers and directors.
(vi) Life Insurance. The Company will purchase a whole life policy for the benefit of the Executive or the Executive's designated beneficiaries with a death benefit of $3.0 million. The Executive shall be entitled to reimbursement of any income tax that the Executive incurs with respect to the Company's payment of premiums.
(vii) Key Man Life Insurance. The Company may purchase on the life of the Executive up to $15.0 million of key man life insurance with the Company as the beneficiary of the death benefit.
(viii) Expenses, Office and Secretarial Support. The Executive shall be entitled to reimbursement of all reasonable expenses, in accordance with the Company's policy as in effect from time to time and on a basis no less favorable than that applicable to other executives of the Company, including, without limitation, telephone, reasonable travel and reasonable entertainment expenses incurred by the Executive in connection with the business of the Company, promptly upon the presentation by the Executive of appropriate documentation. The Executive shall also be entitled to appropriate office space, administrative support, and such other facilities and services as are suitable to the Executive's positions and adequate for the performance of the Executive's duties.
6. Termination. The Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, in the written opinion of a qualified physician reasonably agreed to by the Company and the Executive, the Executive shall become unable to perform his duties hereunder due to Disability, the Company may terminate the Executive's employment hereunder. As used in this Agreement, the term "Disability" shall mean inability of the Executive, due to physical or mental condition, to perform the essential functions of the Executive's job, after consideration of the availability of reasonable accommodations, for more than 180 total calendar days during any period of 12 consecutive months.
(c) For Cause. The Company may terminate the Executive's employment hereunder for Cause. For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon a determination by at least a majority of the members of the Board (other than Executive) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive of such meeting, the purpose thereof and the particulars of the basis for such meeting and the Executive is given an opportunity, together with
counsel, to be heard before the Board) that Executive (i) has committed fraud or misappropriated, stolen or embezzled funds or property from the Company or an affiliate of the Company or secured or attempted to secure personally any profit in connection with any transaction entered into on behalf of the Company or any affiliate of the Company, (ii) has been convicted of, or entered a plea of guilty or "nolo contendre" to, a felony which in the reasonable opinion of the Board brings Executive into disrepute or is likely to cause material harm to the Company's (or any affiliate of the Company) business, customer or supplier relations, financial condition or prospects, (iii) has, notwithstanding not less than 30 days' prior written notice from the Board, willfully failed to perform (other than by reason of illness or temporary disability ) his material duties hereunder, (iv) has knowingly violated or breached any material law or regulation to the material detriment of the Company or any affiliates of the Company or its business, or (v) has breached any non-competition, non-disclosure or non-solicitation agreement between Executive and the Company which causes or is reasonably likely to cause material harm to the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that his action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Any notice of termination delivered by the Company to Executive that purports to notify Executive of a termination for Cause, but where the Company has not otherwise followed the procedures set forth in the definition of "Cause" above, shall be deemed to constitute a notice of termination without Cause pursuant to Section 7(d) hereof. Neither a notice from the Company to Executive that a meeting of the Board has been scheduled to determine whether grounds for a termination for "Cause" exist, nor the holding of such a meeting, shall itself be construed as a notice of termination for such purpose.
(d) Without Cause. The Company may at any time terminate the Executive's employment hereunder without Cause.
(e) Termination by the Executive.
(i) The Executive may terminate his employment hereunder (A) for Good Reason, (B) at any time upon 30 days written notice following receipt by the Executive of written notification by the Company that it does not intend to extend the Term of this Agreement as provided in Section 2 (a "Notice of Non-Renewal"), or (C) at any time after the date hereof by giving sixty (60) days prior notice of his intention to terminate.
(ii) For purposes of this Agreement, "Good Reason" shall mean (A) a
failure by the Company to comply with any material provision of this Agreement
(other than the Company's payment obligations referred to in clause (E) below)
which has not been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Company, (B) the assignment
to the Executive of any material duties inconsistent with the Executive's
position with the Company or a substantial adverse alteration in the nature or
status of the Executive's responsibilities without the consent of the Executive,
(C) without the consent of the Executive, a material reduction in employee
benefits other than a reduction generally
applicable to similarly situated executives of the Company, (D) without the consent of the Executive, relocation of the Company's principal place of business outside a fifty (50) mile radius of Midtown Manhattan, or (E) any failure by the Company to pay the Executive Base Salary or any Incentive Bonus to which he is entitled under the Bonus Plan which failure has not been cured within ten (10) days after notice of such noncompliance has been given by the Executive to the Company or any failure of the Compensation Committee to approve a Bonus Plan for any fiscal year.
(f) Any termination of the Executive's employment by the Company or by
the Executive (other than termination pursuant to subsection (a) or (b) of this
Section 7) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 14. 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 the Executive's employment under the provision so indicated.
(g) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated pursuant to subsection (b) above, the date as of which the physician's written opinion is received by the Company, (iii) if the Executive's employment is terminated pursuant to subsection (c) above, the date specified in the Notice of Termination, and (iv) if the Executive's employment is terminated for any other reason, the date sixty (60) days following the date on which a Notice of Termination is given.
7. Compensation Upon Termination, Death or During Disability.
(a) Disability. During any period that the Executive fails to perform
his duties hereunder as a result of his incapacity due to a physical or mental
condition ("disability period"), the Executive shall continue to receive his
full Base Salary at the rate then in effect for such disability period (and
shall not be eligible for payments under the disability plans, programs and
policies maintained by the Company or in connection with employment by the
Company ("Disability Plans")) until his employment is terminated pursuant to
Section 7(b) hereof, and upon such termination, the Executive shall, within ten
(10) days of such termination, be entitled to all amounts to which the Executive
is entitled pursuant to the Disability Plans. The Executive's rights under any
long-term Disability Plan shall be determined in accordance with the provisions
of such plan, but in no event will the Company maintain a long-term Disability
plan that provides for payment of less than 60% of the Executive's Base Salary.
In addition, upon the Executive's termination in accordance with Section 7(b)
hereof, all stock options, restricted stock grants awards and any other equity
awards granted by the Company to the Executive shall become fully vested,
unrestricted and exercisable as of the Date of Termination.
(b) Death. If the Executive's employment is terminated by his death, the Company shall within ten (10) days following the date of the Executive's death, pay to the Executive's designated beneficiary(ies) any amounts due to the Executive under Section 6(d) through the date of and as a result of his death, an amount equal to the Executive's annual Base Salary for the year in which the termination took place, and an amount equal to the Executive's target Bonus for the
year in which the termination took place, together with any other amounts to which the Executive is entitled pursuant to death benefit plans, programs and policies. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination.
(c) Cause or other than Good Reason. If the Executive's employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and reimburse the Executive for all reasonable and customary expenses incurred by the Executive in performing services hereunder prior to the Date of Termination in accordance with Section 6(d), and the Company shall have no further obligations to the Executive under this Agreement.
(d) Termination by the Company without Cause (other than for death or Disability) or Termination by the Executive for Good Reason. If the Company shall terminate the Executive's employment other than for death, Disability pursuant to Section 7(b) or Cause, or the Executive shall terminate his employment for Good Reason, then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the product of (A) the sum of (1) the Executive's Base Salary in effect as of the Date of Termination and (2) the Executive's highest Annual Bonus earned in the last three fiscal years, and (B) the lesser of three (3) or the quotient of the number of whole months remaining in the term of this Agreement as of the Date of Termination divided by twelve (12); such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) In the case of a termination of the Executive's employment by the Company without Cause or for Disability, or by the Executive for Good Reason, the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(d)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
(e) Upon Receipt by the Executive of a Notice of Non-Renewal. If the Company delivers to the Executive a Notice of Non-Renewal, and the Executive elects to terminate his employment with the Company as a result of such Notice of Non-Renewal pursuant to Section 7(e)(i)(B), then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the sum of (A) an amount equal to the Executive's annual Base Salary as then in effect and (B) an amount equal to the Executive's highest Annual Bonus earned during the preceding three fiscal years; such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(e)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
8. Nondisclosure. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. The agreement made in this Section 9 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law or by separate agreement upon the Executive in respect of confidential information of the Company.
9. Non-Competition and Non-Solicitation. During the Executive's employment with the Company and for a period of twenty four (24) months following the Executive's Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for himself or herself or on behalf of or in conjunction with any other person, persons, company, firm, partnership, corporation, business, group or other entity (each, a "Person"), work in the principal line of business engaged in, or planned to be engaged in, by the Company at the Date of Termination within any state where the Company is doing business or has plans for commencing business as of the Date of Termination. The Executive's passive ownership of less than five percent (5%) of the securities of a public company shall not be treated as an action in competition with the Company.
(a) Executive hereby acknowledges and agrees that his employment with the Company places him in a position of trust and confidence with respect to the business operations, customers, prospects and personnel of the Company. He agrees that, due to his position and knowledge, his engaging in any business that competes in the principal line of business as the Company will cause the Company significant and irreparable harm.
(b) In consideration of the compensation and benefits extended to him under this Agreement, Executive agrees that, during the term of Executive's employment by the Company and for twenty four (24) months following the Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for any reason whatsoever, directly or indirectly, for himself or herself or on behalf of or in conjunction with any other Person with whom the Executive works or is affiliated:
(i) solicit and/or hire any Person who is on the Date of Termination, or has been within six (6) months prior to the Date of Termination, an employee of the Company or its affiliates;
(ii) solicit, induce or attempt to induce any Person who is, at the Date of Termination, or has been within six (6) months prior to the Date of Termination, an actual customer, client, business partner, or a prospective customer, client, business partner (i.e., a customer, client or business partner who is party to a written proposal (including, with respect to the Company's borrowers, a mortgage loan application) or letter of intent with the Company, in each case written less than six (6) months prior to the Date of Termination) of the Company, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates, (B) enticing or attempting to entice such Person to do
business with Executive or any affiliate of Executive, or (C) in any way interfering with the relationship between such Person and the Company or its affiliates; or
(iii) solicit, induce or attempt to induce any Person who is or that is, at the time of the Date of Termination, or has been within six (6) months prior to the Date of Termination, a supplier, licensee or consultant of, or provider of goods or services to the Company or its affiliates, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates or (B) in any way interfering with the relationship between such Person and the Company or its affiliates.
(c) Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, Executive agrees that the foregoing covenants in this Section 10, in addition to and not in limitation of any other rights, remedies or damages available to the Company at law, in equity or under this Agreement, shall be enforced by the Company in the event of the breach or threatened breach by Executive, by injunctions and/or restraining orders.
(d) It is agreed by the parties that the covenants contained in this
Section 10 impose a fair and reasonable restraint on Executive in light of the
activities and business of the Company on the date of the execution of this
Agreement and the current plans of the Company; but it is also the intent of the
Company and Executive that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the Company
and its affiliates throughout the term of these covenants. Executive also
acknowledges that this restraint will not prevent him from earning a living in
his chosen field of work.
(e) The covenants in this Section 10 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth herein are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement shall thereby be reformed to reflect the same.
(f) All of the covenants in this Section 10 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of Executive against the Company whether predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of such covenants. It is specifically agreed that the duration of the period during which the agreements and covenants of Executive made in this Section 10 shall be effective shall be computed by excluding from such computation any time during which Executive is in violation of any provision of this Section 10.
(g) Notwithstanding any of the foregoing, if any applicable law,
judicial ruling or order shall reduce the time period during which Executive
shall be prohibited from engaging in any competitive activity described in
Section 10 hereof, the period of time for which Executive shall be prohibited
pursuant to Section 10 hereof shall be the maximum time permitted by law.
10. Successors; Binding Agreement. This Agreement shall be binding upon and inure to the benefit of successors and permitted assigns of the parties. This Agreement may not be assigned, nor may performance of any duty hereunder be delegated, by either party without the prior written consent of the other; provided, however, the Company may assign this Agreement to any successor to its business, including but not limited to in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or stock of the Company or similar transaction involving the Company or a successor corporation.
11. Additional Payments by the Company.
(a) If it is determined (as hereafter provided) that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any option, share appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then Executive will be entitled to receive an additional payment or payments (a "Gross-Up Payment") in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) All determinations required to be made under this Section 12, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by the Company's then current outside auditors; provided that if that firm is unwilling or unable to provide such services, another accounting firm may be selected by the Company (such accounting firm the "Accounting Firm"). The Company will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after the date of the change in control or the date of Executive's termination of employment, if applicable, and any other such time or times as may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive no later than five calendar days prior to the due date for Executive's income tax return on which the Excise Tax is included. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 12(f) hereof and Executive thereafter is required to make a payment of any Excise Tax, Executive shall so notify the Company, which will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.
(c) The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by Section 12(b) hereof.
(d) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. To the extent the Excise Tax has not been previously withheld from amounts paid to the Executive, Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Sections 12(b) and 12(d) hereof will be borne by the Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefore and reasonable evidence of his payment thereof.
(f) Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than ten (10) business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (x) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (y) the date that any payment of amount with respect to such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:
(i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;
(ii) take such action in connection with contesting such claim as the Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 12(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 12(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company will determine; provided, however, that if the Company directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(g) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, Executive receives any refund with respect to such claim, Executive will (subject to the Company's complying with the requirements of Section 12(f)) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, a determination is made that Executive will not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid pursuant to this Section 12. If, after the receipt by Executive of a Gross-Up Payment but before the payment by Executive of the Excise Tax, it is determined by the Accounting Firm that the Excise Tax payable by Executive is less than the amount originally computed by the Accounting Firm and consequently that the amount of the Gross-Up Payment is larger than that required by this Section 12, Executive shall promptly refund to the Company the amount by which the Gross-Up Payment initially made to Executive exceeds the Gross-Up Payment required under this Section 12.
12. Continued Performance. Provisions of this Agreement shall survive any
termination of Executive's employment hereunder if so provided herein or if
necessary or desirable fully to accomplish the purposes of such provisions,
including, without limitation, the obligations of the Executive under the terms
and conditions of Sections 9 and 10. Any obligation of the Company to make
payments to or on behalf of the Executive under Section 8 is expressly
conditioned upon the Executive's continued performance of the Executive's
obligations under Sections 9 and 10 for the time periods stated in Sections 9
and 10. The Executive recognizes that, except to the extent, if any, provided in
Section 8, the Executive will earn no compensation from the Company after the
Date of Termination.
13. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Michael I. Wirth
c/o New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
If to the Company:
New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
Attn: Compensation Committee
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer of the Company as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.
(a) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(b) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall deemed to be in an original but all of which together will constitute one and the same instrument.
(c) Disputes. Any dispute or controversy arising under or in connection with this Agreement shall, at the Executive's sole discretion, be settled exclusively by such judicial remedies as the Executive may seek to pursue or by arbitration conducted before a panel of three arbitrators in New York, New York in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction with respect to any violation or threatened violation of the provisions of Sections 9 or 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The expenses of arbitration shall be borne by the Company.
(d) Executive's Legal Expenses. In the event that the Executive institutes any proceeding to enforce his rights under, or to recover damages for breach of this Agreement, the Executive, if he is the prevailing party, shall be entitled to recover from the Company any actual expenses for attorney's fees and disbursements incurred by him.
(e) Indemnification. The Company shall indemnify and hold Executive harmless to the maximum extent permitted by the laws of the State of Maryland (and the law of any other appropriate jurisdiction after any reincorporation of the Company) against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by Executive, in connection with the defense of, or as a result of any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that he is or was an officer or trustee of the Company, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor (or other than by or in the right of the Company); provided, however, that this indemnification provision shall not apply to any action or proceeding relating to a dispute between the Company and the Executive based on any alleged breach or violation of this Agreement.
(f) Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein.
[Signatures next page]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
NEW YORK MORTGAGE TRUST, INC.
Attest:
By:_______________________________ By:______________________________________
Name:
Title:
MICHAEL I. WIRTH
Attest:
By:_____________________________ ______________________________________
|
EXHIBIT 10.96
EMPLOYMENT AGREEMENT OF
JOSEPH V. FIERRO
AGREEMENT made this ___ day of __________, 2004, between The New York Mortgage Company, LLC, a Delaware limited liability company (the "Company"), and Joseph V. Fierro (the "Executive").
The Executive is presently employed as the Chief Operating Officer of the Company. The Board of Directors (the "Board") of New York Mortgage Trust, Inc. (the "Trust") and the members of the Company (the "Members") recognize that the Executive's contribution to the growth and success of the Company has been substantial. The Board and Members desire to provide for the continued employment of the Executive and to make certain changes in the Executive's employment arrangements with the Company which the Board and Members have determined will reinforce and encourage the continued attention and dedication to the Company of the Executive as a member of the Company's management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to continue to serve the Company, on the terms and conditions herein provided. The Executive's continued employment with the Company is contingent on his execution of this Employment Agreement.
In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein.
2. Term. The employment of the Executive by the Company as provided in
Section 1 will commence on the closing date of the Trust's initial public
offering and end on December 31, 2007, unless further extended or sooner
terminated as hereinafter provided. Commencing on January 1, 2005, and each
January 1 thereafter, the term of the Executive's employment shall automatically
be extended for one additional calendar year, unless, not later than the October
31 immediately preceding such January 1, the Company or the Executive shall have
given written notice to the other that it does not wish that the Term of this
Agreement is to be automatically extended as described above. For purposes of
this Agreement, "Term" shall mean the actual duration of Executive's employment
hereunder, taking into account any extensions or notices not to extend pursuant
to this Section 2 or termination of employment pursuant to Section 7.
3. Position and Duties. The Executive shall serve as the Chief Operating Officer of the Company and shall have such responsibilities, duties and authority as he may have as of the date hereof (or any position to which he may be promoted after the date hereof) and as may from time to time be assigned to the Executive by the Board or the Members that are consistent with such responsibilities, duties and authority. The Executive shall also serve as a senior executive officer of certain subsidiaries of the Company, with positions, titles and responsibilities that are suitable
for the Chief Operating Officer of the Company, at the reasonable request of the Board or Members without additional compensation. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company; provided, that nothing in this Agreement shall preclude Executive from serving as a director or trustee in any other firm or from pursuing personal real estate investments and other personal investments, as long as such activities do not interfere with Executive's performance of his duties hereunder or violate Section 9 or 10 of this Agreement. Executive may continue to serve as an owner of Centurion Abstract, LLC, which provides title insurance brokerage services for certain title insurance providers and to which the Company may refer its borrowers from time to time for assistance in obtaining title insurance in connection with mortgage loans they obtain from the Company.
4. Place of Performance. In connection with the Executive's employment by the Company, the Executive shall be based at the principal executive offices of the Company in New York, New York, except for required travel on the Company's business to an extent substantially consistent with present business travel obligations.
5. Compensation and Related Matters.
(a) Base Salary. The Company shall pay the Executive a base salary
annually (the "Base Salary"), which shall be payable in periodic installments
according to the Company's normal payroll practices. The initial Base Salary
shall be $315,000. During the Terms, the Board or the Compensation Committee of
the Board (the "Compensation Committee") shall review the Base Salary at least
once a year to determine whether the Base Salary should be increased effective
the following January 1; provided, however, that on January 1, 2005, the initial
Base Salary shall be increased by 5%, and on each January 1 thereafter during
the Term, the Base Salary shall be increased by a minimum positive amount equal
to the Base Salary in effect on January 1 of the prior year multiplied by the
increase in the Consumer Price Index for such year. The amount of the increase
shall be determined before March 31 of each year and shall be retroactive to
January 1. The Base Salary, including any increases, shall not be decreased
during the Term. For purposes of this Agreement, the term "Base Salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 6(a).
(b) Annual Cash Incentive Awards. The Executive shall be eligible to participate in the Trust's annual cash incentive bonus plan adopted by the Compensation Committee for each fiscal year during the Term of this Agreement ("Bonus Plan"), subject to the terms and conditions of the Bonus Plan. If the Executive or the Trust, as the case may be, satisfies the performance criteria contained in such Bonus Plan for a fiscal year, he shall receive an annual Incentive Bonus (as defined below) in an amount determined by the Compensation Committee and subject to ratification by the Board, if required. If the Executive or the Company, as the case may be, fails to satisfy the performance criteria contained in such Bonus Plan for a fiscal year, the Compensation Committee may determine whether any Incentive Bonus shall be payable to Executive for that year, subject to ratification by the Board, if required. Beginning January 1, 2005, the Bonus Plan shall contain both individual and group goals established by the Compensation Committee. The annual Incentive Bonus shall be paid to the Executive no later than thirty (30) days after the date the Compensation Committee determines whether the criteria
in the Bonus Plan for such fiscal year were satisfied. For purposes of this Agreement, the term "Incentive Bonus" shall mean the amount established pursuant to this Section 6(b).
(c) Stock Based Awards. The Trust has established the 2004 Stock Incentive Plan ("Stock Incentive Plan"). Subject to the terms and conditions of the Stock Incentive Plan, the Executive shall be eligible to participate in the Stock Incentive Plan, and shall be eligible to receive annual stock option and/or restricted stock awards under the Stock Incentive Plan. The Compensation Committee shall approve any such awards made to the Executive pursuant to the Stock Incentive Plan.
(i) 2004 Stock Incentive Plan Option Grants. Option awards under
the Stock Incentive Plan will have an exercise price per share equal to the
closing price of the Trust's common stock on the trading day immediately
preceding the date of grant, will have a term of ten (10) years and will vest
and become exercisable with respect to 1/3 of the underlying shares of Trust
common stock on the first, second and third anniversaries, respectively, of the
date of grant; provided, however, that the Executive will be 100% vested in all
outstanding option awards, including the unvested portion of such awards, upon
(i) a Change in Control (as defined herein), (ii) a termination by the Company
without Cause (as defined herein), (iii) a termination by the Executive for Good
Reason (as defined herein), (iv) the Executive's death, or (v) the Disability
(as defined below) of the Executive, and that the Executive will forfeit all
unvested options if he is terminated for Cause or he terminates his employment
hereunder for other than Good Reason.
(ii) 2004 Stock Incentive Plan Restricted Stock Awards. The Stock Incentive Plan provides for the issuance of shares of Company common stock as restricted common stock ("Restricted Stock Grants") to the extent that such shares of common stock are available thereunder. Restricted Stock Grants awarded to the Executive shall be subject to forfeiture restrictions that will terminate with respect to 1/3 of the awarded shares on the first, second and third anniversaries of the date of the issuance; provided, however, that with respect to the Initial Restricted Stock Grant (as defined below), 33.3% of such shares will be fully vested and unrestricted upon issuance and the forfeiture restrictions with respect to the remaining 66.7% of such shares will terminate with respect to 22.3% of the awarded shares on the first anniversary of the date of issuance, 22.2% of the awarded shares on the second anniversary of the date of issuance and 22.2% of the awarded shares on the third anniversary of the date of issuance. Upon completion of the Company's initial public offering of its common stock (the "IPO"), the Company shall grant to the Executive a Restricted Stock Grant of 31,309 shares of Company common stock (the "Initial Restricted Stock Grant"). In the event the underwriters in the IPO exercise their over-allotment option, the Company shall promptly increase the number of shares of Company common stock granted to the Executive in the Initial Restricted Stock Grant by a percentage equal to the percentage of over-allotment option shares issued relative to the number of initial shares issued in the IPO, e.g. if the underwriters exercise their full 15% over-allotment option, the Company will increase the Initial Restricted Stock Grant by 4,696 shares, or 15%, and there additional shares of common stock will be deemed to be part of the Initial Restricted Stock Grant. Notwithstanding the foregoing, the Executive will be 100% vested and all restrictions on each outstanding Restricted Stock Grant will lapse upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) a termination
by the Executive for Good Reason (as defined herein), (iv) the Executive's death, (v) the Disability (as defined below) of the Executive, or (vi) the Company's failure to renew this Agreement, and that the Executive will forfeit all shares with respect to which the forfeiture restrictions have not terminated if he is terminated for Cause or he terminates for other than Good Reason. The common stock issued as Restricted Stock Grants will have voting and dividend rights.
For purposes of this Agreement:
"Acquiring Person" means that a Person, considered alone or as part of a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is or becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing at least fifty percent (50%) of the Company's then outstanding securities entitled to vote generally in the election of the Board.
"Continuing Director" means any member of the Board, while a member of the Board and (i) who was a member of the Board on the closing date of the Company's initial public offering of the Common Stock or (ii) whose nomination for or election to the Board was recommended or approved by a majority of the Continuing Directors.
"Control Change Date" means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the "Control Change Date" is the date of the last of such transactions.
"Change in Control" means (i) a Person is or becomes an Acquiring Person;
(ii) holders of the securities of the Company entitled to vote thereon approve
any agreement with a Person (or, if such approval is not required by applicable
law and is not solicited by the Company, the closing of such an agreement) that
involves the transfer of all or substantially all of the Company's total assets
on a consolidated basis, as reported in the Company's consolidated financial
statements filed with the Securities and Exchange Commission; (iii) holders of
the securities of the Company entitled to vote thereon approve a transaction
(or, if such approval is not required by applicable law and is not solicited by
the Company, the closing of such a transaction) pursuant to which the Company
will undergo a merger, consolidation, or statutory share exchange with a Person,
regardless of whether the Company is intended to be the surviving or resulting
entity after the merger, consolidation, or statutory share exchange, other than
a transaction that results in the voting securities of the Company carrying the
right to vote in elections of persons to the Board outstanding immediately prior
to the closing of the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% (fifty percent) of the Company's voting securities carrying
the right to vote in elections of persons to the Company's Board, or such
securities of such surviving entity, outstanding immediately after the closing
of such transaction; (iv) the Continuing Directors cease for any reason to
constitute a majority of the Board; (v) holders of the securities of the Company
entitled to vote thereon approve a plan of complete liquidation of the Company
or an agreement for the sale or liquidation by the Company of all or
substantially all of the Company's assets (or, if such approval is not required
by applicable law and is not solicited by the Company, the commencement of
actions constituting such a plan or the closing of such an
agreement); or (vi) the Board adopts a resolution to the effect that, in its judgment, as a consequence of any one or more transactions or events or series of transactions or events, a Change in Control of the Company has effectively occurred. The Board shall be entitled to exercise its sole and absolute discretion in exercising its judgment and in the adoption of such resolution, whether or not any such transaction(s) or event(s) might be deemed, individually or collectively, to satisfy any of the criteria set forth in subparagraphs (i) through (v) above.
"Person" means any human being, firm, corporation, partnership, or other entity. "Person" also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term "Person" does not include the Company or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Company or any Related Entity, or any person or entity organized, appointed, or established by the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan, unless the Board determines that such an employee-benefit plan or such person or entity is a "Person".
"Related Entity" means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code.
(d) Benefits.
(i) Vacation. The Executive shall be entitled to four (4) weeks of paid vacation per full calendar year. The Executive shall be entitled to cash in lieu of any unused vacation time. The Executive shall not be entitled to carry over any unused vacation time from year to year.
(ii) Sick and Personal Days. The Executive shall be entitled to sick and personal days in accordance with the policies of the Company.
(iii) Employee Benefits.
(A) Participation in Employee Benefit Plans. Subject to the terms of any applicable plans, policies or programs, the Executive and his spouse and eligible dependents, if any, and their respective designated beneficiaries where applicable, will be eligible for and entitled to participate in any Company or Trust sponsored employee benefit plans, including but not limited to benefits such as group health, dental, accident, disability insurance, group life insurance, and a 401(k) plan, as such benefits may be offered from time to time, on a basis no less favorable than that applicable to other executives of the Trust or Company.
(B) Disability Insurance. The Company will maintain, at its cost, a renewable long-term Disability plan that, subject to the terms of such plan and any applicable plans, policies or programs, provides for payment of not less than 60% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues. In addition, the Company shall reimburse the Executive the amount of the premiums payable by the Executive with respect to a personal supplemental long-term disability insurance policy providing for
benefits equal to at least 40% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues.
(iv) Annual Physical. If the Executive desires an annual physical examination, the Company shall provide, at its cost, a medical examination for the Executive on an annual basis by a licensed physician in the New York, New York metropolitan area selected by the Executive. The results of the examination and any medical information or records regarding the examination will be provided by the physician to the executive, and not to the Company.
(v) Directors and Officers Insurance. During the Term and for a period of 24 months thereafter, the Executive shall be entitled to director and officer insurance coverage for his acts and omissions while an officer and director of the Company on a basis no less favorable to him than the coverage provided to current officers and directors.
(vi) Life Insurance. The Company will purchase a whole life policy for the benefit of the Executive or the Executive's designated beneficiaries with a death benefit of $3.0 million. The Executive shall be entitled to reimbursement of any income tax that the Executive incurs with respect to the Company's payment of premiums.
(vii) Key Man Life Insurance. The Company may purchase on the life of the Executive up to $15.0 million of key man life insurance with the Company as the beneficiary of the death benefit.
(viii) Expenses, Office and Secretarial Support. The Executive shall be entitled to reimbursement of all reasonable expenses, in accordance with the Company's policy as in effect from time to time and on a basis no less favorable than that applicable to other executives of the Company, including, without limitation, telephone, reasonable travel and reasonable entertainment expenses incurred by the Executive in connection with the business of the Company, promptly upon the presentation by the Executive of appropriate documentation. The Executive shall also be entitled to appropriate office space, administrative support, and such other facilities and services as are suitable to the Executive's positions and adequate for the performance of the Executive's duties.
6. Termination. The Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, in the written opinion of a qualified physician reasonably agreed to by the Company and the Executive, the Executive shall become unable to perform his duties hereunder due to Disability, the Company may terminate the Executive's employment hereunder. As used in this Agreement, the term "Disability" shall mean inability of the Executive, due to physical or mental condition, to perform the essential functions of the Executive's job, after consideration of the availability of reasonable accommodations, for more than 180 total calendar days during any period of 12 consecutive months.
(c) For Cause. The Company may terminate the Executive's employment hereunder for Cause. For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon a determination by at least a majority of the members of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive of such meeting, the purpose thereof and the particulars of the basis for such meeting and the Executive is given an opportunity, together with counsel, to be heard before the Board) that Executive (i) has committed fraud or misappropriated, stolen or embezzled funds or property from the Company or an affiliate of the Company or secured or attempted to secure personally any profit in connection with any transaction entered into on behalf of the Company or any affiliate of the Company, (ii) has been convicted of, or entered a plea of guilty or "nolo contendre" to, a felony which in the reasonable opinion of the Board brings Executive into disrepute or is likely to cause material harm to the Company's (or any affiliate of the Company) business, customer or supplier relations, financial condition or prospects, (iii) has, notwithstanding not less than 30 days' prior written notice from the Board, willfully failed to perform (other than by reason of illness or temporary disability ) his material duties hereunder, (iv) has knowingly violated or breached any material law or regulation to the material detriment of the Company or any affiliates of the Company or its business, or (v) has breached any non-competition, non-disclosure or non-solicitation agreement between Executive and the Company which causes or is reasonably likely to cause material harm to the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that his action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Any notice of termination delivered by the Company to Executive that purports to notify Executive of a termination for Cause, but where the Company has not otherwise followed the procedures set forth in the definition of "Cause" above, shall be deemed to constitute a notice of termination without Cause pursuant to Section 7(d) hereof. Neither a notice from the Company to Executive that a meeting of the Board has been scheduled to determine whether grounds for a termination for "Cause" exist, nor the holding of such a meeting, shall itself be construed as a notice of termination for such purpose.
(d) Without Cause. The Company may at any time terminate the Executive's employment hereunder without Cause.
(e) Termination by the Executive.
(i) The Executive may terminate his employment hereunder (A) for Good Reason, (B) at any time upon 30 days written notice following receipt by the Executive of written notification by the Company that it does not intend to extend the Term of this Agreement as provided in Section 2 (a "Notice of Non-Renewal"), or (C) at any time after the date hereof by giving sixty (60) days prior notice of his intention to terminate.
(ii) For purposes of this Agreement, "Good Reason" shall mean (A) a failure by the Company to comply with any material provision of this Agreement (other than the
Company's payment obligations referred to in clause (E) below) which has not been cured within thirty (30) days after notice of such noncompliance has been given by the Executive to the Company, (B) the assignment to the Executive of any material duties inconsistent with the Executive's position with the Company or a substantial adverse alteration in the nature or status of the Executive's responsibilities without the consent of the Executive, (C) without the consent of the Executive, a material reduction in employee benefits other than a reduction generally applicable to similarly situated executives of the Company, (D) without the consent of the Executive, relocation of the Company's principal place of business outside a fifty (50) mile radius of Midtown Manhattan, or (E) any failure by the Company to pay the Executive Base Salary or any Incentive Bonus to which he is entitled under the Bonus Plan which failure has not been cured within ten (10) days after notice of such noncompliance has been given by the Executive to the Company or any failure of the Compensation Committee to approve a Bonus Plan for any fiscal year.
(f) Any termination of the Executive's employment by the Company or by
the Executive (other than termination pursuant to subsection (a) or (b) of this
Section 7) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 14. 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 the Executive's employment under the provision so indicated.
(g) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated pursuant to subsection (b) above, the date as of which the physician's written opinion is received by the Company, (iii) if the Executive's employment is terminated pursuant to subsection (c) above, the date specified in the Notice of Termination, and (iv) if the Executive's employment is terminated for any other reason, the date sixty (60) days following the date on which a Notice of Termination is given.
7. Compensation Upon Termination, Death or During Disability.
(a) Disability. During any period that the Executive fails to perform
his duties hereunder as a result of his incapacity due to a physical or mental
condition ("disability period"), the Executive shall continue to receive his
full Base Salary at the rate then in effect for such disability period (and
shall not be eligible for payments under the disability plans, programs and
policies maintained by the Company or in connection with employment by the
Company ("Disability Plans")) until his employment is terminated pursuant to
Section 7(b) hereof, and upon such termination, the Executive shall, within ten
(10) days of such termination, be entitled to all amounts to which the Executive
is entitled pursuant to the Disability Plans. The Executive's rights under any
long-term Disability Plan shall be determined in accordance with the provisions
of such plan, but in no event will the Company maintain a long-term Disability
plan that provides for payment of less than 60% of the Executive's Base Salary.
In addition, upon the Executive's termination in accordance with Section 7(b)
hereof, all stock options, restricted stock grants awards and any other equity
awards granted by the Company to the Executive shall become fully vested,
unrestricted and exercisable as of the Date of Termination.
(b) Death. If the Executive's employment is terminated by his death, the Company shall within ten (10) days following the date of the Executive's death, pay to the Executive's designated beneficiary(ies) any amounts due to the Executive under Section 6(d) through the date of and as a result of his death, an amount equal to the Executive's annual Base Salary for the year in which the termination took place, and an amount equal to the Executive's target Bonus for the year in which the termination took place, together with any other amounts to which the Executive is entitled pursuant to death benefit plans, programs and policies. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination.
(c) Cause or other than Good Reason. If the Executive's employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and reimburse the Executive for all reasonable and customary expenses incurred by the Executive in performing services hereunder prior to the Date of Termination in accordance with Section 6(d), and the Company shall have no further obligations to the Executive under this Agreement.
(d) Termination by the Company without Cause (other than for death or Disability) or Termination by the Executive for Good Reason. If the Company shall terminate the Executive's employment other than for death, Disability pursuant to Section 7(b) or Cause, or the Executive shall terminate his employment for Good Reason, then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of
Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the product of (A) the sum of (1) the Executive's Base Salary in effect as of the Date of Termination and (2) the Executive's highest Annual Bonus earned in the last three fiscal years, and (B) the lesser of three (3) or the quotient of the number of whole months remaining in the term of this Agreement as of the Date of Termination divided by twelve (12); such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) In the case of a termination of the Executive's employment by the Company without Cause or for Disability, or by the Executive for Good Reason, the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(d)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
(e) Upon Receipt by the Executive of a Notice of Non-Renewal. If the Company delivers to the Executive a Notice of Non-Renewal, and the Executive elects to terminate his employment with the Company as a result of such Notice of Non-Renewal pursuant to Section 7(e)(i)(B), then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the sum of (A) an amount equal to the Executive's annual Base Salary as then in effect and (B) an amount equal to the Executive's highest Annual Bonus earned
during the preceding three fiscal years; such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(e)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
8. Nondisclosure. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. The agreement made in this Section 9 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law or by separate agreement upon the Executive in respect of confidential information of the Company.
9. Non-Competition and Non-Solicitation. During the Executive's employment with the Company and for a period of twenty four (24) months following the Executive's Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for himself or herself or on behalf of or in conjunction with any other person, persons, company, firm, partnership, corporation, business, group or other entity (each, a "Person"), work in the principal line of business engaged in, or planned to be engaged in, by the Company at the Date of Termination within any state where the Company is doing business or has plans for commencing business as of the Date of Termination. The Executive's passive ownership of less than five percent (5%) of the securities of a public company shall not be treated as an action in competition with the Company.
(a) Executive hereby acknowledges and agrees that his employment with the Company places him in a position of trust and confidence with respect to the business operations,
customers, prospects and personnel of the Company. He agrees that, due to his position and knowledge, his engaging in any business that competes in the principal line of business as the Company will cause the Company significant and irreparable harm.
(b) In consideration of the compensation and benefits extended to him under this Agreement, Executive agrees that, during the term of Executive's employment by the Company and for twenty four (24) months following the Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for any reason whatsoever, directly or indirectly, for himself or herself or on behalf of or in conjunction with any other Person with whom the Executive works or is affiliated:
(i) solicit and/or hire any Person who is on the Date of Termination, or has been within six (6) months prior to the Date of Termination, an employee of the Company or its affiliates;
(ii) solicit, induce or attempt to induce any Person who is, at the Date of Termination, or has been within six (6) months prior to the Date of Termination, an actual customer, client, business partner, or a prospective customer, client, business partner (i.e., a customer, client or business partner who is party to a written proposal (including, with respect to the Company's borrowers, a mortgage loan application) or letter of intent with the Company, in each case written less than six (6) months prior to the Date of Termination) of the Company, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates, (B) enticing or attempting to entice such Person to do business with Executive or any affiliate of Executive, or (C) in any way interfering with the relationship between such Person and the Company or its affiliates; or
(iii) solicit, induce or attempt to induce any Person who is or that is, at the time of the Date of Termination, or has been within six (6) months prior to the Date of Termination, a supplier, licensee or consultant of, or provider of goods or services to the Company or its affiliates, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates or (B) in any way interfering with the relationship between such Person and the Company or its affiliates.
(c) Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, Executive agrees that the foregoing covenants in this Section 10, in addition to and not in limitation of any other rights, remedies or damages available to the Company at law, in equity or under this Agreement, shall be enforced by the Company in the event of the breach or threatened breach by Executive, by injunctions and/or restraining orders.
(d) It is agreed by the parties that the covenants contained in this
Section 10 impose a fair and reasonable restraint on Executive in light of the
activities and business of the Company on the date of the execution of this
Agreement and the current plans of the Company; but it is also the intent of the
Company and Executive that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the Company and its affiliates throughout the term of these covenants. Executive also acknowledges that this restraint will not prevent him from earning a living in his chosen field of work.
(e) The covenants in this Section 10 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth herein are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement shall thereby be reformed to reflect the same.
(f) All of the covenants in this Section 10 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of Executive against the Company whether predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of such covenants. It is specifically agreed that the duration of the period during which the agreements and covenants of Executive made in this Section 10 shall be effective shall be computed by excluding from such computation any time during which Executive is in violation of any provision of this Section 10.
(g) Notwithstanding any of the foregoing, if any applicable law,
judicial ruling or order shall reduce the time period during which Executive
shall be prohibited from engaging in any competitive activity described in
Section 10 hereof, the period of time for which Executive shall be prohibited
pursuant to Section 10 hereof shall be the maximum time permitted by law.
10. Successors; Binding Agreement. This Agreement shall be binding upon and inure to the benefit of successors and permitted assigns of the parties. This Agreement may not be assigned, nor may performance of any duty hereunder be delegated, by either party without the prior written consent of the other; provided, however, the Company may assign this Agreement to any successor to its business, including but not limited to in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or stock of the Company or similar transaction involving the Company or a successor corporation.
11. Additional Payments by the Company.
(a) If it is determined (as hereafter provided) that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any option, share appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then Executive will be entitled to receive an additional payment or payments (a "Gross-Up Payment") in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) All determinations required to be made under this Section 12, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by the Company's then current outside auditors; provided that if that firm is unwilling or unable to provide such services, another accounting firm may be selected by the Company (such accounting firm the "Accounting Firm"). The Company will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after the date of the change in control or the date of Executive's termination of employment, if applicable, and any other such time or times as may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive no later than five calendar days prior to the due date for Executive's income tax return on which the Excise Tax is included. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 12(f) hereof and Executive thereafter is required to make a payment of any Excise Tax, Executive shall so notify the Company, which will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.
(c) The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by Section 12(b) hereof.
(d) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. To the extent the Excise Tax has not been previously withheld from amounts paid to the Executive, Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with
the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Sections 12(b) and 12(d) hereof will be borne by the Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefore and reasonable evidence of his payment thereof.
(f) Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than ten (10) business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (x) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (y) the date that any payment of amount with respect to such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:
(i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;
(ii) take such action in connection with contesting such claim as the Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 12(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 12(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company will determine; provided, however, that if the Company directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(g) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, Executive receives any refund with respect to such claim, Executive will (subject to the Company's complying with the requirements of Section 12(f)) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, a determination is made that Executive will not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid pursuant to this Section 12. If, after the receipt by Executive of a Gross-Up Payment but before the payment by Executive of the Excise Tax, it is determined by the Accounting Firm that the Excise Tax payable by Executive is less than the amount originally computed by the Accounting Firm and consequently that the amount of the Gross-Up Payment is larger than that required by this Section 12, Executive shall promptly refund to the Company the amount by which the Gross-Up Payment initially made to Executive exceeds the Gross-Up Payment required under this Section 12.
12. Continued Performance. Provisions of this Agreement shall survive any
termination of Executive's employment hereunder if so provided herein or if
necessary or desirable fully to accomplish the purposes of such provisions,
including, without limitation, the obligations of the Executive under the terms
and conditions of Sections 9 and 10. Any obligation of the Company to make
payments to or on behalf of the Executive under Section 8 is expressly
conditioned upon the Executive's continued performance of the Executive's
obligations under Sections 9 and 10 for the time periods stated in Sections 9
and 10. The Executive recognizes that, except to the extent, if any, provided in
Section 8, the Executive will earn no compensation from the Company after the
Date of Termination.
13. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Joseph V. Fierro
c/o New York Mortgage Trust, Inc.
7(th) Floor
1301 Avenue of the Americas
New York, NY 10019
If to the Company:
New York Mortgage Trust, Inc.
7(th) Floor 1301 Avenue of the Americas New York, NY 10019 Attn: Compensation Committee
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer of the Company as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.
(a) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(b) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall deemed to be in an original but all of which together will constitute one and the same instrument.
(c) Disputes. Any dispute or controversy arising under or in connection with this Agreement shall, at the Executive's sole discretion, be settled exclusively by such judicial remedies as the Executive may seek to pursue or by arbitration conducted before a panel of three arbitrators in New York, New York in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction with respect to any violation or threatened violation of the provisions of Sections 9 or 10 of this Agreement and the Executive
hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The expenses of arbitration shall be borne by the Company.
(d) Executive's Legal Expenses. In the event that the Executive institutes any proceeding to enforce his rights under, or to recover damages for breach of this Agreement, the Executive, if he is the prevailing party, shall be entitled to recover from the Company any actual expenses for attorney's fees and disbursements incurred by him.
(e) Indemnification. The Company shall indemnify and hold Executive harmless to the maximum extent permitted by the laws of the State of Maryland (and the law of any other appropriate jurisdiction after any reincorporation of the Company) against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by Executive, in connection with the defense of, or as a result of any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that he is or was an officer or trustee of the Company, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor (or other than by or in the right of the Company); provided, however, that this indemnification provision shall not apply to any action or proceeding relating to a dispute between the Company and the Executive based on any alleged breach or violation of this Agreement.
(f) Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
THE NEW YORK MORTGAGE COMPANY, LLC
Attest:
By:_______________________________ By:______________________________________
Name:
Title:
JOSEPH V. FIERRO
Attest:
By:_____________________________ __________________________________________
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EXHIBIT 10.97
EMPLOYMENT AGREEMENT OF
STEVEN R. MUMMA
AGREEMENT made this ___ day of ________, 2004, between New York Mortgage Trust, Inc., a Maryland corporation (the "Company"), and Steven R. Mumma (the "Executive").
The Executive is presently employed as the Chief Operating Officer of the Company. The Board of Directors of the Company (the "Board") recognizes that the Executive's contribution to the growth and success of the Company has been substantial. The Board desires to provide for the continued employment of the Executive and to make certain changes in the Executive's employment arrangements with the Company which the Board has determined will reinforce and encourage the continued attention and dedication to the Company of the Executive as a member of the Company's management, in the best interest of the Company and its shareholders. The Executive is willing to commit himself to continue to serve the Company, on the terms and conditions herein provided. The Executive's continued employment with the Company is contingent on his execution of this Employment Agreement.
In order to effect the foregoing, the Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein.
2. Term. The employment of the Executive by the Company as provided in Section 1 will commence on the closing date of the Company's initial public offering and end on December 31, 2007, unless further extended or sooner terminated as hereinafter provided. Commencing on January 1, 2005, and each January 1 thereafter, the term of the Executive's employment shall automatically be extended for one additional calendar year, unless, not later than the October 31 immediately preceding such January 1, the Company or the Executive shall have given written notice to the other that it does not wish that the Term of this Agreement is to be automatically extended as described above. For purposes of this Agreement, "Term" shall mean the actual duration of Executive's employment hereunder, taking into account any extensions or notices not to extend pursuant to this Section 2 or termination of employment pursuant to Section 7.
3. Position and Duties. The Executive shall serve as the Chief Operating Officer of the Company and shall have such responsibilities, duties and authority as he may have as of the date hereof (or any position to which he may be promoted after the date hereof) and as may from time to time be assigned to the Executive by the Board that are consistent with such responsibilities, duties and authority. The Executive shall also serve as a senior executive officer of certain subsidiaries of the Company, with positions, titles and responsibilities that are suitable for the Chief Operating Officer of the Company, at the reasonable request of the Board without additional compensation. The Executive shall devote substantially all his working time and
efforts to the business and affairs of the Company; provided, that nothing in this Agreement shall preclude Executive from serving as a director or trustee in any other firm or from pursuing personal real estate investments and other personal investments, as long as such activities do not interfere with Executive's performance of his duties hereunder or violate Section 9 or 10 of this Agreement.
4. Place of Performance. In connection with the Executive's employment by the Company, the Executive shall be based at the principal executive offices of the Company in New York, New York, except for required travel on the Company's business to an extent substantially consistent with present business travel obligations.
5. Compensation and Related Matters.
(a) Base Salary. The Company shall pay the Executive a base salary annually (the "Base Salary"), which shall be payable in periodic installments according to the Company's normal payroll practices. The initial Base Salary shall be $212,000. During the Terms, the Board or the Compensation Committee of the Board (the "Compensation Committee") shall review the Base Salary at least once a year to determine whether the Base Salary should be increased effective the following January 1; provided, however, that on January 1, 2005, the initial Base Salary shall be increased to $250,000, and on each January 1 thereafter during the Term, the Base Salary shall be increased by a minimum positive amount equal to the Base Salary in effect on January 1 of the prior year multiplied by the increase in the Consumer Price Index for such year. The amount of the increase shall be determined before March 31 of each year and shall be retroactive to January 1. The Base Salary, including any increases, shall not be decreased during the Term. For purposes of this Agreement, the term "Base Salary" shall mean the amount established and adjusted from time to time pursuant to this Section 6(a).
(b) Annual Cash Incentive Awards. The Executive shall be eligible to participate in the Company's annual cash incentive bonus plan adopted by the Compensation Committee for each fiscal year during the Term of this Agreement ("Bonus Plan"), subject to the terms and conditions of the Bonus Plan. If the Executive or the Company, as the case may be, satisfies the performance criteria contained in such Bonus Plan for a fiscal year, he shall receive an annual Incentive Bonus (as defined below) in an amount determined by the Compensation Committee and subject to ratification by the Board, if required. If the Executive or the Company, as the case may be, fails to satisfy the performance criteria contained in such Bonus Plan for a fiscal year, the Compensation Committee may determine whether any Incentive Bonus shall be payable to Executive for that year, subject to ratification by the Board, if required. Beginning January 1, 2005, the Bonus Plan shall contain both individual and group goals established by the Compensation Committee. Notwithstanding the foregoing, in no event shall the annual Incentive Bonus payable to Executive for the period from the Effective Date through December 31, 2004 be less than $100,000, irrespective of whether the Company or the Executive satisfies the performance criteria contained in the Bonus Plan as in effect for the 2004 fiscal year (the "Guaranteed Bonus"). The annual Incentive Bonus (including for the 2004 fiscal year the Guaranteed Bonus plus the incremental portion of the annual Incentive Bonus in excess of the Guaranteed Bonus amount, if any) shall be paid to the Executive no later than thirty (30) days after the date the Compensation Committee determines whether the criteria in the Bonus Plan for
such fiscal year were satisfied. The annual Incentive Bonus for the future years
during the Term shall be paid to the Executive no later than thirty (30) days
after the date the Compensation Committee determines whether the criteria in the
Bonus Plan for such fiscal year were satisfied. For purposes of this Agreement,
the term "Incentive Bonus" shall mean the amount established pursuant to this
Section 6(b).
(c) Stock Based Awards. The Company has established the 2004 Stock Incentive Plan ("Stock Incentive Plan"). Subject to the terms and conditions of the Stock Incentive Plan, the Executive shall be eligible to participate in the Stock Incentive Plan, and shall be eligible to receive annual stock option and/or restricted stock awards under the Stock Incentive Plan. The Compensation Committee shall approve any such awards made to the Executive pursuant to the Stock Incentive Plan.
(i) 2004 Stock Incentive Plan Option Grants. Option awards under the
Stock Incentive Plan will have an exercise price per share equal to the closing
price of the Company's common stock on the trading day immediately preceding the
date of grant, will have a term of ten (10) years and will vest and become
exercisable with respect to 1/3 of the underlying shares of Company common stock
on the first, second and third anniversaries, respectively, of the date of
grant; provided, however, that the Executive will be 100% vested in all
outstanding option awards, including the unvested portion of such awards, upon
(i) a Change in Control (as defined herein), (ii) a termination by the Company
without Cause (as defined herein), (iii) a termination by the Executive for Good
Reason (as defined herein), (iv) the Executive's death, or (v) the Disability
(as defined below) of the Executive, and that the Executive will forfeit all
unvested options if he is terminated for Cause or he terminates his employment
hereunder for other than Good Reason.
(ii) 2004 Stock Incentive Plan Restricted Stock Awards. The Stock Incentive Plan provides for the issuance of shares of Company common stock as restricted common stock ("Restricted Stock Grants") to the extent that such shares of common stock are available thereunder. Restricted Stock Grants awarded to the Executive shall be subject to forfeiture restrictions that will terminate with respect to 1/3 of the awarded shares on the first, second and third anniversaries of the date of the issuance; provided, however, that with respect to the Initial Restricted Stock Grant (as defined below), 33.3% of such shares will be fully vested and unrestricted upon issuance and the forfeiture restrictions with respect to the remaining 66.7% of such shares will terminate with respect to 22.3% of the awarded shares on the first anniversary of the date of issuance, 22.2% of the awarded shares on the second anniversary of the date of issuance and 22.2% of the awarded shares on the third anniversary of the date of issuance. Upon completion of the Company's initial public offering of its common stock (the "IPO"), the Company shall grant to the Executive a Restricted Stock Grant of 29,205 shares of Company common stock (the "Initial Restricted Stock Grant"). In the event the underwriters in the IPO exercise their over-allotment option, the Company shall promptly increase the number of shares of Company common stock granted to the Executive in the Initial Restricted Stock Grant by a percentage equal to the percentage of over-allotment option shares issued relative to the number of initial shares issued in the IPO, e.g. if the underwriters exercise their full 15% over-allotment option, the Company will increase the Initial Restricted Stock Grant by 4,381 shares, or 15%, and there additional shares of common stock will be deemed to be part of the Initial Restricted Stock
Grant. Notwithstanding the foregoing, the Executive will be 100% vested and all restrictions on each outstanding Restricted Stock Grant will lapse upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) a termination by the Executive for Good Reason (as defined herein), (iv) the Executive's death, (v) the Disability (as defined below) of the Executive, or (vi) the Company's failure to renew this Agreement, and that the Executive will forfeit all shares with respect to which the forfeiture restrictions have not terminated if he is terminated for Cause or he terminates for other than Good Reason. The common stock issued as Restricted Stock Grants will have voting and dividend rights.
For purposes of this Agreement:
"Acquiring Person" means that a Person, considered alone or as part of a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is or becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing at least fifty percent (50%) of the Company's then outstanding securities entitled to vote generally in the election of the Board.
"Continuing Director" means any member of the Board, while a member of the Board and (i) who was a member of the Board on the closing date of the Company's initial public offering of the Common Stock or (ii) whose nomination for or election to the Board was recommended or approved by a majority of the Continuing Directors.
"Control Change Date" means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the "Control Change Date" is the date of the last of such transactions.
"Change in Control" means (i) a Person is or becomes an Acquiring Person;
(ii) holders of the securities of the Company entitled to vote thereon approve
any agreement with a Person (or, if such approval is not required by applicable
law and is not solicited by the Company, the closing of such an agreement) that
involves the transfer of all or substantially all of the Company's total assets
on a consolidated basis, as reported in the Company's consolidated financial
statements filed with the Securities and Exchange Commission; (iii) holders of
the securities of the Company entitled to vote thereon approve a transaction
(or, if such approval is not required by applicable law and is not solicited by
the Company, the closing of such a transaction) pursuant to which the Company
will undergo a merger, consolidation, or statutory share exchange with a Person,
regardless of whether the Company is intended to be the surviving or resulting
entity after the merger, consolidation, or statutory share exchange, other than
a transaction that results in the voting securities of the Company carrying the
right to vote in elections of persons to the Board outstanding immediately prior
to the closing of the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% (fifty percent) of the Company's voting securities carrying
the right to vote in elections of persons to the Company's Board, or such
securities of such surviving entity, outstanding immediately after the closing
of such transaction; (iv) the Continuing Directors cease for any reason to
constitute a majority of the Board; (v) holders of the securities of the Company
entitled to vote thereon approve a plan of complete liquidation of the
Company or an agreement for the sale or liquidation by the Company of all or substantially all of the Company's assets (or, if such approval is not required by applicable law and is not solicited by the Company, the commencement of actions constituting such a plan or the closing of such an agreement); or (vi) the Board adopts a resolution to the effect that, in its judgment, as a consequence of any one or more transactions or events or series of transactions or events, a Change in Control of the Company has effectively occurred. The Board shall be entitled to exercise its sole and absolute discretion in exercising its judgment and in the adoption of such resolution, whether or not any such transaction(s) or event(s) might be deemed, individually or collectively, to satisfy any of the criteria set forth in subparagraphs (i) through (v) above.
"Person" means any human being, firm, corporation, partnership, or other entity. "Person" also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term "Person" does not include the Company or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Company or any Related Entity, or any person or entity organized, appointed, or established by the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan, unless the Board determines that such an employee-benefit plan or such person or entity is a "Person".
"Related Entity" means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code.
(d) Benefits.
(i) Vacation. The Executive shall be entitled to four (4) weeks of paid vacation per full calendar year. The Executive shall be entitled to cash in lieu of any unused vacation time. The Executive shall not be entitled to carry over any unused vacation time from year to year.
(ii) Sick and Personal Days. The Executive shall be entitled to sick and personal days in accordance with the policies of the Company.
(iii) Employee Benefits.
(A) Participation in Employee Benefit Plans. Subject to the terms of any applicable plans, policies or programs, the Executive and his spouse and eligible dependents, if any, and their respective designated beneficiaries where applicable, will be eligible for and entitled to participate in any Company sponsored employee benefit plans, including but not limited to benefits such as group health, dental, accident, disability insurance, group life insurance, and a 401(k) plan, as such benefits may be offered from time to time, on a basis no less favorable than that applicable to other executives of the Company.
(B) Disability Insurance. The Company will maintain, at its cost, a renewable long-term Disability plan that, subject to the terms of such plan and any applicable plans, policies or programs, provides for payment of not less than 60% of the Executive's Base
Salary for so long as any long-term Disability of the Executive continues. In addition, the Company shall reimburse the Executive the amount of the premiums payable by the Executive with respect to a personal supplemental long-term disability insurance policy providing for benefits equal to at least 40% of the Executive's Base Salary for so long as any long-term Disability of the Executive continues.
(iv) Annual Physical. If the Executive desires an annual physical examination, the Company shall provide, at its cost, a medical examination for the Executive on an annual basis by a licensed physician in the New York, New York metropolitan area selected by the Executive. The results of the examination and any medical information or records regarding the examination will be provided by the physician to the executive, and not to the Company.
(v) Directors and Officers Insurance. During the Term and for a period of 24 months thereafter, the Executive shall be entitled to director and officer insurance coverage for his acts and omissions while an officer and director of the Company on a basis no less favorable to him than the coverage provided to current officers and directors.
(vi) Life Insurance. The Company will purchase a whole life policy for the benefit of the Executive or the Executive's designated beneficiaries with a death benefit of $1.5 million. The Executive shall be entitled to reimbursement of any income tax that the Executive incurs with respect to the Company's payment of premiums.
(vii) Key Man Life Insurance. The Company may purchase on the life of the Executive up to $15.0 million of key man life insurance with the Company as the beneficiary of the death benefit.
(viii) Expenses, Office and Secretarial Support. The Executive shall be entitled to reimbursement of all reasonable expenses, in accordance with the Company's policy as in effect from time to time and on a basis no less favorable than that applicable to other executives of the Company, including, without limitation, telephone, reasonable travel and reasonable entertainment expenses incurred by the Executive in connection with the business of the Company, promptly upon the presentation by the Executive of appropriate documentation. The Executive shall also be entitled to appropriate office space, administrative support, and such other facilities and services as are suitable to the Executive's positions and adequate for the performance of the Executive's duties.
6. Termination. The Executive's employment hereunder may be terminated without any breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, in the written opinion of a qualified physician reasonably agreed to by the Company and the Executive, the Executive shall become unable to perform his duties hereunder due to Disability, the Company may terminate the Executive's employment hereunder. As used in this Agreement, the term "Disability" shall mean inability of the Executive, due to physical or mental condition, to perform the essential functions of the Executive's job, after
consideration of the availability of reasonable accommodations, for more than 180 total calendar days during any period of 12 consecutive months.
(c) For Cause. The Company may terminate the Executive's employment hereunder for Cause. For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon a determination by at least a majority of the members of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive of such meeting, the purpose thereof and the particulars of the basis for such meeting and the Executive is given an opportunity, together with counsel, to be heard before the Board) that Executive (i) has committed fraud or misappropriated, stolen or embezzled funds or property from the Company or an affiliate of the Company or secured or attempted to secure personally any profit in connection with any transaction entered into on behalf of the Company or any affiliate of the Company, (ii) has been convicted of, or entered a plea of guilty or "nolo contendre" to, a felony which in the reasonable opinion of the Board brings Executive into disrepute or is likely to cause material harm to the Company's (or any affiliate of the Company) business, customer or supplier relations, financial condition or prospects, (iii) has, notwithstanding not less than 30 days' prior written notice from the Board, willfully failed to perform (other than by reason of illness or temporary disability ) his material duties hereunder, (iv) has knowingly violated or breached any material law or regulation to the material detriment of the Company or any affiliates of the Company or its business, or (v) has breached any non-competition, non-disclosure or non-solicitation agreement between Executive and the Company which causes or is reasonably likely to cause material harm to the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that his action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Any notice of termination delivered by the Company to Executive that purports to notify Executive of a termination for Cause, but where the Company has not otherwise followed the procedures set forth in the definition of "Cause" above, shall be deemed to constitute a notice of termination without Cause pursuant to Section 7(d) hereof. Neither a notice from the Company to Executive that a meeting of the Board has been scheduled to determine whether grounds for a termination for "Cause" exist, nor the holding of such a meeting, shall itself be construed as a notice of termination for such purpose.
(d) Without Cause. The Company may at any time terminate the Executive's employment hereunder without Cause.
(e) Termination by the Executive.
(i) The Executive may terminate his employment hereunder (A) for Good Reason, (B) at any time upon 30 days written notice following receipt by the Executive of written notification by the Company that it does not intend to extend the Term of this Agreement as provided in Section 2 (a "Notice of Non-Renewal"), or (C) at any time after the date hereof by giving sixty (60) days prior notice of his intention to terminate.
(ii) For purposes of this Agreement, "Good Reason" shall mean (A) a
failure by the Company to comply with any material provision of this Agreement
(other than the Company's payment obligations referred to in clause (E) below)
which has not been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Company, (B) the assignment
to the Executive of any material duties inconsistent with the Executive's
position with the Company or a substantial adverse alteration in the nature or
status of the Executive's responsibilities without the consent of the Executive,
(C) without the consent of the Executive, a material reduction in employee
benefits other than a reduction generally applicable to similarly situated
executives of the Company, (D) without the consent of the Executive, relocation
of the Company's principal place of business outside a fifty (50) mile radius of
Midtown Manhattan, or (E) any failure by the Company to pay the Executive Base
Salary or any Incentive Bonus to which he is entitled under the Bonus Plan which
failure has not been cured within ten (10) days after notice of such
noncompliance has been given by the Executive to the Company or any failure of
the Compensation Committee to approve a Bonus Plan for any fiscal year.
(f) Any termination of the Executive's employment by the Company or by the
Executive (other than termination pursuant to subsection (a) or (b) of this
Section 7) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 14. 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 the Executive's employment under the provision so indicated.
(g) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated pursuant to subsection (b) above, the date as of which the physician's written opinion is received by the Company, (iii) if the Executive's employment is terminated pursuant to subsection (c) above, the date specified in the Notice of Termination, and (iv) if the Executive's employment is terminated for any other reason, the date sixty (60) days following the date on which a Notice of Termination is given.
7. Compensation Upon Termination, Death or During Disability.
(a) Disability. During any period that the Executive fails to perform his duties hereunder as a result of his incapacity due to a physical or mental condition ("disability period"), the Executive shall continue to receive his full Base Salary at the rate then in effect for such disability period (and shall not be eligible for payments under the disability plans, programs and
policies maintained by the Company or in connection with employment by the
Company ("Disability Plans")) until his employment is terminated pursuant to
Section 7(b) hereof, and upon such termination, the Executive shall, within ten
(10) days of such termination, be entitled to all amounts to which the Executive
is entitled pursuant to the Disability Plans. The Executive's rights under any
long-term Disability Plan shall be determined in accordance with the provisions
of such plan, but in no event will the Company maintain a long-term Disability
plan that provides for payment of less than 60% of the Executive's Base Salary.
In addition, upon the Executive's termination in accordance with Section 7(b)
hereof, all stock options, restricted stock grants awards and any other equity
awards granted by the Company to the Executive shall become fully vested,
unrestricted and exercisable as of the Date of Termination.
(b) Death. If the Executive's employment is terminated by his death, the Company shall within ten (10) days following the date of the Executive's death, pay to the Executive's designated beneficiary(ies) any amounts due to the Executive under Section 6(d) through the date of and as a result of his death, an amount equal to the Executive's annual Base Salary for the year in which the termination took place, and an amount equal to the Executive's target Bonus for the year in which the termination took place, together with any other amounts to which the Executive is entitled pursuant to death benefit plans, programs and policies. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination.
(c) Cause or other than Good Reason. If the Executive's employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and reimburse the Executive for all reasonable and customary expenses incurred by the Executive in performing services hereunder prior to the Date of Termination in accordance with Section 6(d), and the Company shall have no further obligations to the Executive under this Agreement.
(d) Termination by the Company without Cause (other than for death or Disability) or Termination by the Executive for Good Reason. If the Company shall terminate the Executive's employment other than for death, Disability pursuant to Section 7(b) or Cause, or the Executive shall terminate his employment for Good Reason, then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the product of (A) the sum of (1) the Executive's Base Salary in effect as of the Date of Termination and (2) the Executive's highest Annual Bonus earned in the
last three fiscal years, and (B) the lesser of three (3) or the quotient of the number of whole months remaining in the term of this Agreement as of the Date of Termination divided by twelve (12); such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) In the case of a termination of the Executive's employment by the Company without Cause or for Disability, or by the Executive for Good Reason, the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(d)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
(e) Upon Receipt by the Executive of a Notice of Non-Renewal. If the Company delivers to the Executive a Notice of Non-Renewal, and the Executive elects to terminate his employment with the Company as a result of such Notice of Non-Renewal pursuant to Section 7(e)(i)(B), then:
(i) the Company shall pay the Executive any earned and accrued but unpaid installment of Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and all other unpaid and pro rata amounts to which the Executive is entitled as of the Date of Termination under any compensation plan or program of the Company, including without limitation, the approved annual Bonus Plan for the year in which the Date of Termination occurs and all accrued but unused vacation time, such payments to be made in a lump sum on or before the tenth day following the Date of Termination;
(ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as liquidated damages to the Executive an amount equal to the sum of (A) an amount equal to the Executive's annual Base Salary as then in effect and (B) an amount equal to the Executive's highest Annual Bonus earned during the preceding three fiscal years; such payment to be made in a lump sum on or before the tenth day following the Date of Termination. In addition, all stock options, restricted stock awards and any other equity awards granted by the Company to the Executive shall become fully vested, unrestricted and exercisable as of the Date of Termination;
(iii) the Company shall pay the full cost for the Executive to participate in the health insurance plan in which the Executive was enrolled immediately prior to the Date of
Termination for a period of eighteen (18) months, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan from which his continued participation is barred; and
(iv) The obligations of the Company to make any payments to Executive required under Section 8(e)(ii) hereof shall be conditioned on the execution and delivery by the Executive of a general release of claims in form and substance reasonably satisfactory to the Company.
8. Nondisclosure. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. The agreement made in this Section 9 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law or by separate agreement upon the Executive in respect of confidential information of the Company.
9. Non-Competition and Non-Solicitation. During the Executive's employment with the Company and for a period of twenty four (24) months following the Executive's Date of Termination (or, in the case of any resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for himself or herself or on behalf of or in conjunction with any other person, persons, company, firm, partnership, corporation, business, group or other entity (each, a "Person"), work in the principal line of business engaged in, or planned to be engaged in, by the Company at the Date of Termination within any state where the Company is doing business or has plans for commencing business as of the Date of Termination. The Executive's passive ownership of less than five percent (5%) of the securities of a public company shall not be treated as an action in competition with the Company.
(a) Executive hereby acknowledges and agrees that his employment with the Company places him in a position of trust and confidence with respect to the business operations, customers, prospects and personnel of the Company. He agrees that, due to his position and knowledge, his engaging in any business that competes in the principal line of business as the Company will cause the Company significant and irreparable harm.
(b) In consideration of the compensation and benefits extended to him under this Agreement, Executive agrees that, during the term of Executive's employment by the Company and for twenty four (24) months following the Date of Termination (or, in the case of any
resignation by the Executive following receipt of a Notice of Non-Renewal, for a period of only twelve (12) months following the Executive's Date of Termination), the Executive shall not, for any reason whatsoever, directly or indirectly, for himself or herself or on behalf of or in conjunction with any other Person with whom the Executive works or is affiliated:
(i) solicit and/or hire any Person who is on the Date of Termination, or has been within six (6) months prior to the Date of Termination, an employee of the Company or its affiliates;
(ii) solicit, induce or attempt to induce any Person who is, at the Date of Termination, or has been within six (6) months prior to the Date of Termination, an actual customer, client, business partner, or a prospective customer, client, business partner (i.e., a customer, client or business partner who is party to a written proposal (including, with respect to the Company's borrowers, a mortgage loan application) or letter of intent with the Company, in each case written less than six (6) months prior to the Date of Termination) of the Company, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates, (B) enticing or attempting to entice such Person to do business with Executive or any affiliate of Executive, or (C) in any way interfering with the relationship between such Person and the Company or its affiliates; or
(iii) solicit, induce or attempt to induce any Person who is or that is, at the time of the Date of Termination, or has been within six (6) months prior to the Date of Termination, a supplier, licensee or consultant of, or provider of goods or services to the Company or its affiliates, for the purpose or with the intent of (A) inducing or attempting to induce such Person to cease doing business with the Company or its affiliates or (B) in any way interfering with the relationship between such Person and the Company or its affiliates.
(c) Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, Executive agrees that the foregoing covenants in this Section 10, in addition to and not in limitation of any other rights, remedies or damages available to the Company at law, in equity or under this Agreement, shall be enforced by the Company in the event of the breach or threatened breach by Executive, by injunctions and/or restraining orders.
(d) It is agreed by the parties that the covenants contained in this
Section 10 impose a fair and reasonable restraint on Executive in light of the
activities and business of the Company on the date of the execution of this
Agreement and the current plans of the Company; but it is also the intent of the
Company and Executive that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the Company
and its affiliates throughout the term of these covenants. Executive also
acknowledges that this restraint will not prevent him from earning a living in
his chosen field of work.
(e) The covenants in this Section 10 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth herein are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement shall thereby be reformed to reflect the same.
(f) All of the covenants in this Section 10 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of Executive against the Company whether predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of such covenants. It is specifically agreed that the duration of the period during which the agreements and covenants of Executive made in this Section 10 shall be effective shall be computed by excluding from such computation any time during which Executive is in violation of any provision of this Section 10.
(g) Notwithstanding any of the foregoing, if any applicable law, judicial
ruling or order shall reduce the time period during which Executive shall be
prohibited from engaging in any competitive activity described in Section 10
hereof, the period of time for which Executive shall be prohibited pursuant to
Section 10 hereof shall be the maximum time permitted by law.
10. Successors; Binding Agreement. This Agreement shall be binding upon and inure to the benefit of successors and permitted assigns of the parties. This Agreement may not be assigned, nor may performance of any duty hereunder be delegated, by either party without the prior written consent of the other; provided, however, the Company may assign this Agreement to any successor to its business, including but not limited to in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or stock of the Company or similar transaction involving the Company or a successor corporation.
11. Additional Payments by the Company.
(a) If it is determined (as hereafter provided) that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any option, share appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then Executive will be entitled to receive an additional payment or payments (a "Gross-Up Payment") in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) All determinations required to be made under this Section 12, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by the Company's then current outside auditors; provided that if that firm is unwilling or unable to
provide such services, another accounting firm may be selected by the Company (such accounting firm the "Accounting Firm"). The Company will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after the date of the change in control or the date of Executive's termination of employment, if applicable, and any other such time or times as may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive no later than five calendar days prior to the due date for Executive's income tax return on which the Excise Tax is included. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 12(f) hereof and Executive thereafter is required to make a payment of any Excise Tax, Executive shall so notify the Company, which will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.
(c) The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by Section 12(b) hereof.
(d) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. To the extent the Excise Tax has not been previously withheld from amounts paid to the Executive, Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Sections 12(b) and 12(d) hereof will be borne by the Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefore and reasonable evidence of his payment thereof.
(f) Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than ten (10) business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (x) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (y) the date that any payment of amount with respect to such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:
(i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;
(ii) take such action in connection with contesting such claim as the Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 12(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 12(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company will determine; provided, however, that if the Company directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(g) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, Executive receives any refund with respect to such claim, Executive will (subject to the Company's complying with the requirements of Section 12(f)) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(f) hereof, a determination is made that Executive will not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid pursuant to this Section 12. If, after the receipt by Executive of a Gross-Up Payment but before the payment by Executive of the Excise Tax, it is determined by the Accounting Firm that the Excise Tax payable by Executive is less than the amount originally computed by the Accounting Firm and consequently that the amount of the Gross-Up Payment is larger than that required by this Section 12, Executive shall promptly refund to the Company the amount by which the Gross-Up Payment initially made to Executive exceeds the Gross-Up Payment required under this Section 12.
12. Continued Performance. Provisions of this Agreement shall survive any
termination of Executive's employment hereunder if so provided herein or if
necessary or desirable fully to accomplish the purposes of such provisions,
including, without limitation, the obligations of the Executive under the terms
and conditions of Sections 9 and 10. Any obligation of the Company to make
payments to or on behalf of the Executive under Section 8 is expressly
conditioned upon the Executive's continued performance of the Executive's
obligations under Sections 9 and 10 for the time periods stated in Sections 9
and 10. The Executive recognizes that, except to the extent, if any, provided in
Section 8, the Executive will earn no compensation from the Company after the
Date of Termination.
13. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Steven R. Mumma
c/o New York Mortgage Trust, Inc. 7th Floor
1301 Avenue of the Americas New York, NY 10019
If to the Company:
New York Mortgage Trust, Inc.
7th Floor
1301 Avenue of the Americas
New York, NY 10019
Attn: Compensation Committee
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer of the Company as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.
(a) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(b) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall deemed to be in an original but all of which together will constitute one and the same instrument.
(c) Disputes. Any dispute or controversy arising under or in connection with this Agreement shall, at the Executive's sole discretion, be settled exclusively by such judicial remedies as the Executive may seek to pursue or by arbitration conducted before a panel of three arbitrators in New York, New York in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction with respect to any violation or threatened violation of the provisions of Sections 9 or 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The expenses of arbitration shall be borne by the Company.
(d) Executive's Legal Expenses. In the event that the Executive institutes any proceeding to enforce his rights under, or to recover damages for breach of this Agreement, the Executive, if he is the prevailing party, shall be entitled to recover from the Company any actual expenses for attorney's fees and disbursements incurred by him.
(e) Indemnification. The Company shall indemnify and hold Executive harmless to the maximum extent permitted by the laws of the State of Maryland (and the law of any other appropriate jurisdiction after any reincorporation of the Company) against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by Executive, in connection with the defense of, or as a result of any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that he is or was an officer or trustee of the Company, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor (or other than by or in the right of the Company); provided, however, that this indemnification provision shall not apply to any action or proceeding relating to a dispute between the Company and the Executive based on any alleged breach or violation of this Agreement.
(f) Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein.
[Signatures next page]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
NEW YORK MORTGAGE TRUST, INC.
Attest:
By:_______________________________ By:_____________________________________
Name:
Title:
STEVEN R. MUMMA
Attest:
By:_____________________________ ________________________________________
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