Employment Agreement - American Home Mortgage Inc. and Kenneth Alverson
EMPLOYMENT AGREEMENT
This Employment Agreement, dated as of August 4, 2003 (this "Agreement"), is by
and between American Home Mortgage, Inc., a New York corporation having a place
of business at 520 Broadhollow Road, Melville, NY 11747 (the "Company"), and
Kenneth Alverson, [address omitted] (the "Executive").
Whereas the Company wishes to assure itself of the services of the
Executive, and the Executive desires to be employed by the Company, upon the
terms and conditions hereinafter set forth.
Now, Therefore, the Company and the Executive hereby agree as
follows:
1. Employment. The Company agrees to employ the Executive, and the
Executive hereby accepts such employment by the Company during the term set
forth in Section 2 and on the other terms and conditions of this Agreement.
2. Term. The term of this Agreement shall commence on August 4,
2003, and shall continue until four weeks after the resignation or discharge of
the Executive, or until August 3, 2006.
3. Position, Duties and Responsibilities, Rights.
(a) During the term of this Agreement, the Executive shall serve as,
and be elected to and hold the office and title of Chief Administrative Officer.
As such, the Executive shall have all of the powers and duties usually incident
to such office.
(b) During the term of this Agreement, the Executive agrees to
devote substantially all the Executive's time, efforts and skills to the affairs
of the Company during the Company's normal business hours, except for vacations,
illness and incapacity, but nothing in this Agreement shall preclude the
Executive from devoting reasonable periods to (i) manage the Executive's
personal investments, (ii) participate in professional, educational, public
interest, charitable, civic or community activities, including activities
sponsored by trade organizations, (iii) serve as a director or member of an
advisory committee of any corporation not in competition with the Company or any
of its subsidiaries, or as an officer, trustee or director of any charitable,
educational, philanthropic, civic, social or industry organizations, or as a
speaker or arbitrator; provided, however, that the performance of the
Executive's duties or responsibilities in any of such capacities does not
materially interfere with the regular performance of the Executive's duties and
responsibilities hereunder
(c) Place of Performance. In connection with the Executive's
employment by the Company, the Executive shall be based in an office to be
established in Melville, New York, and shall not be required to be absent from
there on travel status or otherwise for more than a reasonable time each year as
necessary or appropriate for the performance of the Executive's duties
hereunder.
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4. Compensation.
(a) During the term of this Agreement, the Company shall pay the
Executive, and the Executive agrees to accept a base salary at the rate of not
less than $400,000.00 per year (the annual base salary as increased from time to
time during the term of this Agreement being hereinafter referred to as the
"Base Salary"). The Base Salary shall be paid in installments no less frequently
than monthly. Any increase in Base Salary or other compensation shall not limit
or reduce any other obligation of the Company hereunder, and once established at
an increased specified rate, the Executive's Base Salary hereunder shall not
thereafter be reduced.
(b) During the term of this Agreement, the Company shall pay the
Executive, a management evaluation bonus the amount of which will be determined
by the Company's Chief Executive Officer based on his evaluation of the
Executive's overall performance during the year. The amount of the management
evaluation bonus will be between 50% and 100% of the Executive's Base Salary.
The management evaluation bonus for a given year will be paid no later than the
last day of February of the succeeding year. Notwithstanding anything to the
contrary, the Executive will not be entitled to any unpaid bonuses if he is no
longer an employee of the Company.
(c) Upon the Executive commencing employment hereunder, the
Executive will receive a sign-on bonus of $200,000. If the Executive ceases to
be employed by the Company within six months of the Executive commencing
employment hereunder, the Executive shall repay the $200,000 sign-on bonus to
the Company. If the Executive ceases to be employed by the Company, and has been
employed by the Company for six months or longer, but for less than eighteen
months, the Executive shall repay to the Company a portion of the sign-on bonus.
The portion of the sign-on bonus to be repaid shall be the product of $200,000
and a fraction, the numerator of which shall be the difference between eighteen
and the number of months the Executive was employed by the Company, and the
denominator of which shall be twelve. The Executive waives any claim of offset
for amounts due pursuant to this subparagraph, and agrees to repay the Company
within ten days of ceasing to be employed by the Company.
(d) The Executive will be eligible to participate in the Company's
stock option and stock grant plans. Upon the Executive commencing employment
hereunder, the Executive shall receive an option award for 40,000 shares of the
existing class of the common stock of the Company. One-half of the award (20,000
shares) shall vest and be exercisable two years following the date the Executive
commences employment hereunder. The remainder of the award (20,000 shares) shall
vest and be exercisable three years following the date the Executive commences
employment hereunder. Upon the Executive commencing employment hereunder, the
Executive shall receive a stock grant of 15,000 shares of the existing class of
the common stock of the Company. One-half of the award (7,500 shares) shall vest
two years following the date the Executive commences employment hereunder. The
remainder of the award (7,500 shares) shall vest three years following the date
the Executive commences employment hereunder. The complete terms of the option
award and stock grant will be governed by the Company's omnibus stock option
plan. In the event that a person or entity, other than Michael Strauss becomes
the owner or beneficial owner of more than 50% of the voting securities of the
Company that are eligible, without contingency, to vote for the Company's
Directors, the option award and stock grant set forth herein shall vest.
(e) During the term of this Agreement, the Executive shall be
entitled to fringe benefits, in each case at least equal to and on the same
terms and conditions as those attached to
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the Executive's office on the date hereof, as the same may be improved from time
to time during the term of this Agreement, as well as to reimbursement, upon
proper accounting, of all reasonable expenses and disbursements incurred by the
Executive in the course of the Executive's duties.
5. Termination of Employment. The employment created hereby is at
will. The Company may terminate this Agreement by discharging the Executive. The
Executive may terminate this Agreement by resigning with four weeks notice to
the Company. Discharge or resignation may be for any reason or for no reason. If
the company chooses to discharge the Executive, it will deliver a letter of
discharge pursuant to the notice provisions of section 8. If the Executive
chooses to resign, the Executive will deliver a letter of resignation pursuant
to the notice provisions of section 8. If the Company terminates this Agreement
without cause prior to its expiration, the Company will pay the Executive a
severance award equal to twelve months base salary. If the Company terminates
this Agreement as a result of a person or entity, other than Michael Strauss
becomes the owner or beneficial owner of more than 50% of the voting securities
of the Company that are eligible, without contingency, to vote for the Company's
Directors, then, in lieu, of the severance award due the Executive in accordance
with the immediately preceding sentence, the Company will pay the Executive a
severance award equal to the greater of twelve months base salary plus the last
management evaluation award paid the Executive or seventeen months base salary.
6. Entire Agreement; Amendment.
(a) This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all other
agreements between the parties, their predecessors and affiliates.
(b) Any amendment of this Agreement shall not be binding unless in
writing and signed by both (i) the Company's Chief Executive Officer and (ii)
the Executive.
7. Enforceability. In the event that any provision of this Agreement
is determined to be invalid or unenforceable, the remaining terms and conditions
of this Agreement shall be unaffected and shall remain in full force and effect,
and any such determination of invalidity or enforceability shall not affect the
validity or enforceability of any other provision of this Agreement.
8. Notices. All notices which may be necessary or proper for either
the Company or the Executive to give to the other shall be in writing and shall
be sent by hand delivery, registered or certified mail, return receipt requested
or overnight courier, if to the Executive, to him at [address omitted] and, if
to the Company, to it at its principal executive offices at 520 Broadhollow
Road, Melville, NY 11747, Attention: Corporate Counsel, with a copy to
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038,
Attention: Louis Bevilacqua, Esq., and shall be deemed given when sent. Either
party may by like notice to the other party change the address at which it is to
receive notices hereunder.
9. Non-Disparagement, Non-Solicitation, Confidential Information.
The Company and the Executive agree that neither will disparage the other and
that their representatives will not disparage either party hereto. The Executive
agrees that for a period of one year following the termination of this
Agreement, the Executive will not solicit any employee of the Company to leave
the Company or hire any employee of the Company. The
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Company and the Executive agree to keep the terms of this Agreement confidential
except that the Executive may divulge the terms of this Agreement to the
Executive's spouse, attorney, financial advisor and accountant provided they
agree to keep the terms of this Agreement confidential. The Executive agrees to
protect, not disclose, and not use for the Executive's benefit any confidential
information or trade secrets belonging to the Company, including information
regarding proprietary procedures and techniques, accounts, or personnel
(excepting information that was already disclosed by the Company or otherwise
was made public other than by breach of this Agreement by the Executive). The
preceding two sentences shall not apply to disclosures required due to the laws
or regulations of governments, or the orders of courts having jurisdiction over
the Company and the Executive. This section 9 shall survive the termination of
this Agreement.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
ENFORCEABLE IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
American Home Mortgage Corp.
By: /s/ Michael Strauss
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Name: Michael Strauss
Title: Chief Executive Officer
/s/ Kenneth Alverson
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Kenneth Alverson
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