SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment #1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File Number 001-11981
MUNICIPAL MORTGAGE & EQUITY, LLC
--------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 52-1449733
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
218 North Charles Street, Suite 500
Baltimore, Maryland 21201
- ------------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 962-8044
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
Common Shares New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
Preferred Shares
Preferred Capital Distribution Shares
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [x] NO [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the registrant's Common Shares held by
non-affiliates of the registrant as of March 24, 2000 (computed by reference to
the closing price of such stock on the New York Stock Exchange) was
$291,940,842. The Company had 17,433,850 Common Shares outstanding as of March
24, 2000 the latest practicable date.
<PAGE>
DESCRIPTION OF AMENDMENT
AMENDMENT #1:
A) Item 14(c) has been amended to: (i) actually file Employment Agreements
between the Registrant and Messrs. Robert J. Banks, Keith J. Gloeckl
and Ray F. Mathis dated October 20, 1999 and (ii) list and actually
file Employment Agreements between the Registrant and Mark K. Joseph,
Michael L. Falcone and Gary A. Mentesana dated December 31, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT WHERE INCORPORATED
Registrant's definitive Proxy Statement regarding the Part III
2000 AnnualMeeting of Shareholders to the extent
stated herein.
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) (1) List of Financial Statements. The following is a list of the
consolidated financial statements included at the end of this report:
Report of Independent Accountants
Consolidated Balance Sheets as of December 31, 1999 and 1998
Consolidated Statements of Income for the Years Ended December 31,
1999, 1998 and 1997
Consolidated Statements of Comprehensive Income for the Years Ended
December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997
Consolidated Statement of Shareholders' Equity for the Years
Ended December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
(2) List of Financial Statement Schedules.
All schedules prescribed by Regulation S-X have been omitted as the
required information is inapplicable or the information is presented
elsewhere in the consolidated financial statements or related notes.
(3) List of Exhibits. The following is a list of exhibits furnished.
3.1 Amended and Restated Certificate of Formation and Operating
Agreement of the Company (filed as Exhibit 4.1 to the
Company's Registration Statement on Form S-3/A, File No.
333-56049, and incorporated by reference herein).
3.2 By-laws of the Company (filed as Exhibit 4.2 to the Company's
Registration Statement on Form S-3/A, File No. 333-56049, and
incorporated by reference herein).
10.1 Reserved
10.2 Reserved
10.3 Employment Agreement between the Registrant and Thomas R.
Hobbs, dated August 1, 1996 (filed as Item 7 (c) Exhibit 10.3
to the Company's report on Form 8-K, filed with the Commission
on January 28, 1998 and incorporated by reference herein).
10.4 Master Repurchase Agreement among the Registrant, Trio
Portfolio Investors, L.L.C., Rio Portfolio Partners, L.P.,
Blackrock Capital Finance, L.P., Brazos Fund, L.P. and M.F.
Swapco, Inc. dated June 30, 1997 (filed as Item 7 (c) Exhibit
10.4 to the Company's report on Form 8-K, filed with the
Commission on January 28, 1998 and incorporated by reference
herein).
10.5 Stock Purchase and Contribution Agreement among the Registrant
and Messrs. Robert J. Banks, Keith J. Gloeckl and Ray F.
Mathis dated September 30, 1999 (filed as Item 7 (c) Exhibit
2.1 to the Company's report on Form 8-K, filed with the
Commission on November 8, 1999 and incorporated by reference
herein).
<PAGE>
10.6 Registration Rights Agreement among the Registrant and Messrs.
Robert J. Banks, Keith J. Gloeckl and Ray F. Mathis dated
October 20, 1999 (filed as Item 16 Exhibit 2.2 to the
Company's report on Form S-3, File No. 333-56049, filed with
the Commission on January 24, 2000 and incorporated by
reference herein).
10.7 Employment Agreement between the Registrant and Robert J.
Banks, dated October 20, 1999*
10.8 Employment Agreement between the Registrant and Keith J.
Gloeckl, dated October 20, 1999*
10.9 Employment Agreement between the Registrant and Ray F. Mathis,
dated October 20, 1999*
10.10 Employment Agreement between the Registrant and Mark K.
Joseph, dated December 31, 1999*
10.11 Employment Agreement between the Registrant and Michael L.
Falcone, dated December 31, 1999*
10.12 Employment Agreement between the Registrant and Gary A.
Mentesana, dated December 31, 1999*
11 Computation of Earnings Per Share
21 Subsidiaries
23 Consent of PricewaterhouseCoopers LLP
27 Data Schedule
*FILED HEREWITH.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Municipal Mortgage & Equity, LLC
By: /s/Mark K. Joseph
Mark K. Joseph
Chief Executive Officer
Date: May 5, 2000
<PAGE>
EMPLOYMENT AGREEMENT
(Robert J. Banks)
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 20th day of
October, 1999 by and between Municipal Mortgage & Equity, LLC, a Delaware
limited liability company ("Employer") and Robert J. Banks ("Employee").
WHEREAS, Employer is engaged in the business of originating, servicing
and managing real estate and debt and equity investments therein, with a
particular emphasis on investments in, or secured by, multi-family properties,
congregate care and assisted living facilities and similar properties;
WHEREAS, Employee has particular skill, experience and background in
investments and asset management services of the type in which the Employer
primarily engages; and
WHEREAS, Employer and Employee desire to enter into an employment
relationship, the terms of which are to be set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employer and Employee
hereby agree as follows:
1. Employment and Duties.
(a) Midland. Employer agrees to hire Employee, and Employee
agrees to be employed by Employer, as Senior Vice President of Employer on the
terms and conditions provided in this Agreement. As his primary employment duty,
Employee shall throughout the term of this Agreement serve as the Chairman of
the Board of Directors and the Chief Executive Officer of Midland Financial
Holdings, Inc. ("Midland"), a wholly-owned subsidiary of Municipal Mortgage &
Equity, LLC ("MuniMae"). Employee shall perform the duties and responsibilities
appropriate to each such position and such other duties and responsibilities as
may be reasonably determined from time to time by the Chief Executive Officer
("CEO") of MuniMae consistent with the types of duties and responsibilities
typically performed by a person serving in such positions in similar businesses.
Employee agrees to devote sufficient time, attention and skill in performing the
foregoing duties consistent with his practice prior to the date hereof.
(b) Other Subsidiaries. Employee shall throughout the term of
this Agreement serve as Senior Vice President of each direct wholly-owned
subsidiary of MuniMae. Employee shall undertake the duties and responsibilities
appropriate to each such position and such as may be reasonably determined from
time to time by the CEO or the Board of MuniMae.
(c) Assistance. Throughout the term of this Agreement,
Employee shall (i) use reasonable efforts to assist Employer in maintaining the
business and relationships of Midland and its subsidiaries, including without
limitation, Midland's relationships with FannieMae and with MAHGT (as defined
below) and each of its participating trusts, and (ii) recommend that the
President or other representative of MuniMae be elected a Trustee of MAHGT, that
the participating trusts to extend the term of MAHGT, that Midland and its
subsidiaries to remain the investment advisor to MAHGT, and that Midland and its
subsidiaries to remain in control of all low-income housing tax credit equity
partnerships and other investments sponsored or arranged by any of them.
Employee does not warrant that any of the above relationships will or can be
maintained with his assistance or that his recommendation will be effective.
Employee shall not be deemed to be in breach of this Section 1(c) if Employee
must take action or refrain from taking an action contrary to the requirements
of this Section 1(c) in order to fulfill his fiduciary duties as s trustee of
MAHGT.
<PAGE>
(d) Nothing herein shall prohibit Employee (i) from
consulting with or serving as an officer or director of any outside Boards with
or on which he is serving as of the date hereof, all of which are listed on
Exhibit A, and (ii) provided that such activity shall not violate any provision
of this Agreement (including the noncompetition provisions of Section 8 below)
(A) from participating in any other business activities approved in advance by
the CEO or by the Chairman of the Board of Directors of MuniMae (the "Board") in
accordance with any terms and conditions of such approval, such approval not to
be unreasonably withheld or delayed, (B) from engaging in charitable, civil,
fraternal or trade group activities, or (C) from investing in other entities or
business ventures.
2. Compensation. As compensation for performing the services
required by this Agreement, and during the term of this Agreement, Employee
shall compensated as follows:
(a) Base Compensation. Employer shall pay to Employee an
annual salary ("Base Compensation") of Two Hundred Fifty Thousand Dollars
($250,000), payable in accordance with the general policies and procedures of
the Employer for payment of salaries to executive personnel, but in any event no
less frequently than every two weeks, in substantially equal installments,
subject to withholding for applicable federal, state and local taxes. Increases
in Base Compensation shall be determined by the Compensation Committee of the
Board based on the recommendation of the CEO and on periodic reviews of
Employee's performance conducted on at least an annual basis, but shall not be
less than 5% per year during the term of this Agreement. During the term of this
Agreement, Employee's annual Base Compensation shall not be reduced below the
initial Base Compensation set forth above.
(b) Incentive Compensation. In addition to Base Compensation,
Employee shall be eligible to receive additional compensation ("Incentive
Compensation"), pursuant to MuniMae's Incentive Compensation Plan as then in
effect. The Incentive Compensation Plan will provide that the amount of the
bonus will be based on a formula tied to Employer's achievement of specified
targets of growth in eamings available for distribution to shareholders as
determined by the Compensation Committee and the recommendation of the CEO.
During the initial term of this Agreement, Employee's Incentive Compensation
shall be a percentage of Base Compensation as follows: 15-30% if MuniMae
achieves its threshold performance, 25-50% if MuniMae achieves its target
performance and 45-100% if MuniMae achieves its superior performance goals;
provided, however, that no Incentive Compensation shall be payable for any year
in which Midland does not achieve the Earn-out target for such year as set
forth, subject to adjustment as provided in Sections 2.04(a) and 2.04(b) of the
Purchase Agreement (as hereinafter defined). Employee acknowledges that the
formula set forth in the Incentive Compensation Plan may vary for each employee
who participates therein. Incentive Compensation for any given fiscal year shall
be determined no later than 60 days after the end of Employer's fiscal year and
paid no later than 75 days after the end of the fiscal year. If Employee shall
be employed for only a portion of a fiscal year for which Employee is eligible
for Incentive Compensation, the amount of Incentive Compensation payable shall
be the amount payable for the full year reduced by the percentage which the
number of months (including any partial months) worked bears to twelve (the
"Proportionate Share").
<PAGE>
(c) Option to Acquire Shares. MuniMae has established and
Employee shall be entitled to participate throughout the term of this Agreement
in MuniMae's current Share Incentive Plan and any successor plan. Employee's
participation in such plan is subject to the terms thereof. Employee shall
initially be entitled to 87,500 options. Thereafter, the CEO of the Employer
shall from time to time recommend to the Compensation Committee of the Board
that Employee receive options to purchase Employer's Growth Shares. Such options
shall be exercisable at the market value of Growth Shares as of the date the
options are awarded. The CEO shall base his recommendation on comparable option
awards to employees having similar responsibilities in companies of comparable
business and size.
3. Employee Benefits. During the term of this Agreement, Employee and
his eligible dependents shall have the right to participate in any retirement,
pension, insurance, health or other benefit plan or program adopted by Employer
(or in which Employer participates) to the same extent as any other officer of
the Employer, subject, in the case of a plan or program, to all of the terms and
conditions thereof, and to any limitations imposed by law. To the extent that
Employee has similar benefits under a plan or program established by any other
entity, Employee shall nonetheless have the right to the benefits provided by
Employer's plan or program; provided, however, that where by the terms of any
plan or program, or under applicable law, Employee may only participate in one
such plan or program, Employee shall have the option to limit his participation
to the plan or program sponsored by Employer, or to such other plan or program.
Employee shall have the right, to the extent permitted under any applicable law,
to participate concurrently in plans or programs sponsored by others (including
self-employment plans or programs) and in plans or programs sponsored by
Employer. Employer agrees to pay for all club dues related to Employee's club
memberships at Detroit Golf Club, Bay Harbor Golf Club and Belleair County Club.
In addition the Employer agrees to pay for at least 8 season tickets to the
Tampa Bay Buccaneers football games, and at least 2 season tickets to the Tampa
Bay Lightning hockey games. Notwithstanding anything to the contrary contained
herein the Employer agrees to transfer the right to purchase 4 club seat season
tickets to the Tampa Bay Buccaneers and the 2 season tickets to the Tampa Bay
Lightning to Employee upon the termination of Employee's employment no matter
what the reason for such termination.
4. Vacation, Sickness and Leaves of Absence. Employee shall be entitled
to the amount of paid vacation provided to Employee by Midland prior to the date
hereof, but in no event less than 4 weeks during each fiscal year. Employee
shall provide Employer with reasonable notice of anticipated vacation dates. Any
vacation days that are not taken in a given fiscal year shall accrue and
carryover from year to year, and, upon any termination of this Agreement for any
reason whatsoever, all accrued and unused vacation time will be paid to Employee
within 10 days of such termination based on his annual rate of Base Compensation
in effect on the date of such termination; provided, however, that no more than
ten (10) days of accrued vacation may be carried over at any time. In addition,
Employee shall be entitled to such sick leave and holidays, with pay, as
Employer provides to other officers. Unused sick leave shall be carried forward
or compensated upon termination of employment. Employee may also be granted
leaves of absence with or without pay for such valid and legitimate reasons as
the Board on recommendation from the CEO, in its sole and absolute discretion,
may determine. Employee may spend approximately 75% of his time working from his
home in Michigan, including in particular the period from approximately May 15
to October 15 of each year; provided, however, that Employee shall remain
reasonably available for travel and meetings outside of Michigan.
<PAGE>
5. Expenses. Employee shall be entitled to receive, within 14 days after
he has delivered to the Employer an itemized statement thereof, and after
presentation of such invoices or similar records as the Employer may reasonably
require, reimbursement for all necessary and reasonable expenses incurred by him
in connection with the performance of his duties.
6. Term. The initial term of this Agreement shall be for four
years (the "Initial Term"), commencing on October , 1999 (the "Effective
Date") unless terminated sooner as provided herein. Any termination
under of this Agreement shall be subject to Section 7 below.
7. Termination and Termination Benefits.
(a) Termination by Employer.
(i) Without Cause. Employer may terminate
this Agreement and Employee's employment at any time upon ninety (90) days prior
written notice to Employee, during which period Employer shall have the option
to require Employee to continue to perform his duties under this Agreement.
Employee shall be paid his Base Compensation and all other benefits to which he
is entitled under this Agreement up through the effective date of termination,
plus his Proportionate Share of Incentive Compensation for the year in which the
termination occurs. In addition all Earn-out Shares (as defined in the Stock
Purchase and Contribution Agreement dated September 30, 1999 between the
Employer, Employee and others (the "Stock Purchase Agreement")) (i) which have
been eamed through the date of Employee's termination, and (ii) which may become
payable with respect to periods ending after the date of Employee's termination
notwithstanding that the Net Income (as defined in the Stock Purchase Agreement)
for such periods has not yet been determined, shall be immediately and
irrevocably issued by Employer to Employee.
(ii) With Cause. Employer may terminate
this Agreement with cause upon ten (10) days prior written notice to Employee.
In such event, Employee shall be paid his Base Compensation and all other
benefits to which he is entitled under this Agreement up through the effective
date of termination, plus his Proportionate Share of Incentive Compensation for
the year in which termination occurs. For purposes of this Section, termination
for cause shall mean (A) acts or omissions by the Employee with respect to the
Employer which constitute a knowing violation of law (unless consented to or
directed by Employer); (B) receipt by the Employee of money, property or
services from the Employer or from another person dealing with Employer in
violation of law or this Agreement, (C) breach by Employee of the noncompetition
provisions of this Agreement, (D) gross negligence by the Employee in the
performance of his duties, or repeated failure by the Employee to perform
services that have been reasonably requested of him by the Board, following
notice in writing of such failure or negligence specifying the actions or
omissions constituting such failure and a reasonable opportunity to cure and if
such requests are consistent with this Agreement. Notwithstanding any
termination of Employee for cause pursuant to this Section 7(a)(ii), Employee
shall continue to be entitled to Earn-out Shares to the extent provided in the
Stock Purchase Agreement.
<PAGE>
(iii) Disability. If due to illness, physical
or mental disability, or other incapacity, Employee shall fail to perform the
duties required by this Agreement, Employer may terminate this Agreement upon 30
days written notice to Employee. In such event, Employee shall be paid his Base
Compensation and receive all benefits owing to him under this Agreement through
the effective date of termination and shall receive his Proportionate Share of
Incentive Compensation for the year in which the termination occurs. Employee
shall only be considered disabled under this paragraph if he is unable to work
due to disability for a total of 120 or more business days during any 12-month
period. Nothing in this paragraph shall be construed to limit Employee's rights
to the benefits of any disability insurance policy provided by Employer and this
Section shall not be construed as varying the terms of any such policy in any
manner adverse to Employee. Notwithstanding any termination of Employee as a
result of disability pursuant to this Section 7(a)(iii), Employee shall continue
to be entitled to Eam-out Shares to the extent provided in the Stock Purchase
Agreement.
(b) Termination by Employee.
(i) Employee may terminate this
Agreement only upon good reason as defined in this Section 7(b) and only
upon 90 days prior written notice to Employer. In such event, Employee shall be
paid his Base Compensation and shall receive all benefits through the date of
termination and shall receive his Proportionate Share of Incentive Compensation
for the year of termination.
(ii) Employee shall have "good reason"
to terminate his employment if (A) his Base Compensation, as in effect at any
given time, shall be reduced, (B) Employer shall fail to provide any of the
payments or benefits provided for under this Agreement, the Stock Purchase
Agreement, or the Registration Rights Agreement by and among Employee, Midland
and others, (C) Employer shall materially reduce or alter Employee's duties, (D)
Employer shall require Employee to take any act which would be a violation of
federal, state or local criminal law, and (E) Employer shall require Employee to
take any act which would not be in the best interests of the Employer and its
shareholders; (F) Employer shall require Employee to change the location of his
residence; (G) Employee is removed without his consent from the Board of
Directors of MuniMae or Midland; or (H) if MuniMae undertakes actions which the
Employee reasonably believes would affect the operations of Midland in a way
which would materially and adversely affect the ability of the Employee to eam
the Eam-out Shares, and the Employer and Employee are unable within sixty (60)
days after notice to Employer by Employee of Employee's objections to MuniMae's
actions to resolve in good faith such dispute.
<PAGE>
(iii) In the event the Employee terminates
his employment with Employer for good reason as defined in Section
7(b)(ii)(A)-(G), all Earn-out Shares (i) which have been eamed through the date
of Employee's termination, and (ii) which may become payable with respect to
periods ending after the date of Employee's termination notwithstanding that the
Net Income for such periods has not yet been determined, shall be immediately
and irrevocably issued by Employer to Employee. In the event the Employee
terminates his employment with Employer for good reason as described in Section
7(b)(ii)(H), (x) all Eam-out Shares which have been earned through the date of
Employee's termination and one-half of all Earn-out Shares which may become
payable with respect to periods ending after the date of Employee's termination
notwithstanding that the Net Income for such periods has not yet been determined
shall be immediately and irrevocably issued by MuniMae to Employee, (y) Employee
shall continue to be entitled to Earn-out Shares to the extent provided in the
Stock Purchase Agreement; and (z) the stock ownership requirements set forth in
Section 10(g) shall be reduced to $3,600,000 and $1,500,000, respectively.
(c) Termination Compensation.
(i) Termination Without Cause or for
Good Reason. In the event of a termination of this Agreement prior to the end of
the Term, pursuant to Section 7(a)(i), 7(a)(iii) or 7(b), Employer, in addition
to the Base Compensation, benefits and Incentive Compensation payable as
provided in such sections, shall pay to Employee additional compensation
("Termination Compensation") as follows. If the termination does not follow a
Change in Control (as defined in subparagraph (ii) below), Termination
Compensation shall be equal to the Base Compensation that Employee would have
received during the remaining Term of this Agreement. Termination Compensation
shall be paid in four equal quarterly payments beginning on the first day of the
first calendar month following the termination date, unless Employer elects to
make such payments sooner.
(ii) Chance in Control. The acquisition
of voting control of MuniMae by any one or more persons or entities who are
directly, or indirectly through one or more intermediaries, under common
control, or who are related to each other within the meaning of Sections 267 and
707(b) of the Internal Revenue Code, shall be deemed a "Change in Control." In
the event Employee is terminated within eighteen months of a Change in Control,
Termination Compensation shall be equal to the Base Compensation Employee would
have received during the remaining term of this Agreement, payable in a lump sum
on the effective date of Employee's termination. Such Termination Compensation
shall be in addition to all other compensation and benefits to which Employee is
entitled for a termination without cause under Section 7(a)(i) above, and shall
be payable even in the event of a termination effective as of the end of the
Term. In addition, in the event of a Change of Control, all Earn-out Shares (i)
which have been earned through the date of such Change of Control, and (ii)
which may become payable with respect to periods ending after the date of the
Change of Control notwithstanding that the Net Income for such periods has not
yet been determined, shall be immediately and irrevocably issued by Employer to
Employee.
(d) Death Benefit. Notwithstanding any other provision
of this Agreement, this Agreement shall terminate on the date of Employee's
death. In such event, Employee's estate shall be entitled only to the balance of
the Earn-Out Shares described in, and eamed pursuant to the Stock Purchase
Agreement.
<PAGE>
8. Covenant Not to Compete.
(a) Noncompetition. From and after the Effective Date and
continuing for 24 months following the termination of this Agreement, Employee
shall not without the prior written consent of the Board engage in or carry on,
directly or indirectly, whether as an advisor, principal, agent, partner,
officer, director, employee, shareholder, associate or consultant of or to any
person, partnership, corporation or any other business entity, the business of
financing or asset management of multi-family apartment properties financed by
tax-exempt bonds or by loans funded by the participating trusts in the Midland
Affordable Housing Group Trust ("MAHGT") or by loans intended to be sold to
FannieMae; provided, however, if Employer terminates Employee without cause
under Section 7(a)(i) above, or the Employee resigns for good reason under
Section 7(b) above, this Section 8(a) shall not apply.
(b) Reasonable Restrictions. Employee acknowledges that the
restrictions of subparagraph (a) above are reasonable, fair and equitable in
scope, term and duration, are necessary to protect the legitimate business
interests of the Employer, and are a material inducement to the Employer to
enter into this Agreement. Employer and Employee both agree that in the event a
court shall determine any portion of the restrictions in subparagraph (a) are
not reasonable, the court may change such restrictions, including without
limitation the imposition of a geographical restriction and a different duration
restriction, to reflect a restriction which the court will enforce as
reasonable. In determining the reasonableness of the restrictions in
subparagraph (a), a Court shall consider the overall terms of this Agreement,
the acquisition by Municipal Mortgage & Equity, LLC of Employee's Stock in
Midland Financial Holdings, Inc., and the national scope of Employer's and
Midland's business.
(c) Specific Performance. Employee acknowledges that the
obligations undertaken by him pursuant to this Agreement are unique and that if
Employee shall fail to abide by any of the restrictions set forth in
subparagraph (a), or shall terminate this Agreement or his employment without
good reason as defined in Section 7(b), Employer will have no adequate remedy at
law. Employee therefore confirms that Employer shall have the right, in the
event of a violation of subparagraph (a), or a termination by Employee without
good reason, to injunctive relief to enforce the terms of this Section 8 or, in
the alternative, (i) in the case of a violation of subparagraph (a) and not
involving a termination by Employee without good reason, the right to liquidated
damages of $100,000, and (ii) in the case of a termination by Employee without
good reason, the right to the greater of (A) a forfeiture by Employee of all
Earn-Out Shares payable by MuniMae to Employee and not yet paid, or (B) $500,000
in liquidated damages. This right to injunctive relief or liquidated damages
shall be Employer's exclusive remedy at law or in equity.
<PAGE>
9. Indemnification and Liability Insurance. Employer hereby agrees to
indemnify and hold Employee harmless, to the maximum extent allowed by law, from
any and all liability for acts or omissions of Employee performed in the course
of Employee's employment (or reasonably believed by Employee to be within the
scope of his employment) provided that such acts or omissions do not constitute
(a) criminal conduct, (b) willful misconduct, or (c) a fraud upon, or breach of
Employee's duty of loyalty to, the Employer. Employer shall at all times carry
Directors' and Officers' liability insurance in commercially reasonable amounts,
but in any event not less than One Million Dollars ($1,000,000).
10. Miscellaneous.
(a) Complete Agreement. This Agreement and the Stock Purchase
Agreement (the relevant terms of which are hereby incorporated by reference)
constitutes the entire agreement among the parties with respect to the matters
set forth herein and supersedes all prior understandings and agreements between
the parties as to such matters. No amendments or modifications shall be binding
unless set forth in writing and signed by both parties.
(b) Successors and Assigns. Neither party may assign its
rights or interest under this Agreement without the prior written consent of the
other party, except that Employer's interest in this Agreement may be assigned
to (I) a successor by operation of law, (ii) or to a purchaser purchasing
substantially all of Employer's business, or (iii) to any subsidiary of MuniMae
which is directly or indirectly wholly-owned by MuniMae, and the term "Employer"
as used in this Agreement shall thereafter refer to such assignee.. This
Agreement shall be binding upon and shall inure to the benefit of each of the
parties and their respective permitted successors and assigns.
(c) Severability. Each provision of this Agreement is
severable, such that if any part of this Agreement shall be deemed invalid or
unenforceable, the balance of this Agreement shall be enforced so as to give
effect as to the intent of the parties.
(d) Representations of Employer. Employer represents and
warrants to Employee that it has the requisite limited liability company power
to enter into this Agreement and perform the terms hereof and that the
execution, delivery and performance of this Agreement have been duly authorized
by all appropriate company action.
(e) Construction. This Agreement shall be governed in all
respects by the internal laws of the State of Maryland (excluding reference to
principles of conflicts of law). As used herein, the singular shall include the
plural, the plural shall include the singular, and the use of any pronoun shall
be construed to refer to the masculine, feminine or neuter, all as the context
may require.
(f) Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed given on the date sent if
delivered by hand or by facsimile, and on the next business day if sent by
overnight courier or by United States mail, postage prepaid, to each party at
the following address (or at such other address as a party may specify by notice
under this section):
<PAGE>
If to Employer:
Municipal Mortgage & Equity, LLC
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Attention: Chief Executive Officer
If to Employee:
Robert J. Banks
33 N. Garden Avenue
Suite 1200
Clearwater, Florida 33755
with a copy to:
Honigman, Miller, Schwartz and Cohn
2290 1" National Building
Detroit, Michigan 48226
Attention: Gregory J. DeMars
(g) MuniMae Stock Ownership. At all times during the first 3
years of the Initial Term of this Agreement, Employee shall hold MuniMae Growth
Shares with a value of not less than $7,200,000, and during the last year of
this Agreement Employee shall hold Growth Shares with a value of not less than
$3,000,000, in each case based on the value of such shares on the date acquired.
(h) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Agreement as of the date and year first above written.
WITNESS: EMPLOYER:
MUNICIPAL MORTGAGE & EQUITY, LLC
/s/Chelsie Wolfe By: /s/Michael L. Falcone
Chelsie Wolfe Name: Michael L. Falcone
Title: President
EMPLOYEE:
/s/Myra Peppi /s/Robert J. Banks
Myra Peppi Robert J. Banks
<PAGE>
Exhibit A to Banks Employment Agreement
Permitted Outside Board Memberships
Director, First National Bank of Florida
Trustee, Gulf Coast Museum of Art
Trustee, Robert J. Banks Trust
<PAGE>
EMPLOYMENT AGREEMENT
(Keith J. Gloecki)
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 20th day of
October, 1999 by and between Municipal Mortgage & Equity, LLC, a Delaware
limited liability company ("Employer") and Keith J. Gloecki ("Employee").
WHEREAS, Employer is engaged in the business of originating, servicing
and managing real estate and debt and equity investments therein, with a
particular emphasis on investments in, or secured by, multi-family properties,
congregate care and assisted living facilities and similar properties;
WHEREAS, Employee has particular skill, experience and background in
investments and asset management services of the type in which the Employer
primarily engages; and
WHEREAS, Employer and Employee desire to enter into an employment
relationship, the terms of which are to be set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employer and Employee
hereby agree as follows:
1. Employment and Duties.
(a) Midland. Employer agrees to hire Employee, and Employee
agrees to be employed by Employer, as Senior Vice President of Employer on the
terms and conditions provided in this Agreement. As his primary employment duty,
Employee shall throughout the term of this Agreement serve as a member of the
Board of Directors and the Chief Operating Officer of Midland Financial
Holdings, Inc. ("Midland"), a wholly-owned subsidiary of Municipal Mortgage &
Equity, LLC ("MuniMae"), and as President and COO of Midland Mortgage Investment
Corporation, President of Midland Capital Corporation, and Executive Vice
President of Midland Equity Corporation, each a wholly-owned subsidiary of
Midland. Employee shall perform the duties and responsibilities appropriate to
each such position and such other duties and responsibilities as may be
reasonably determined from time to time by the Chief Executive Officer ("CEO")
of Midland consistent with the types of duties and responsibilities typically
performed by a person serving in such positions in similar businesses. Employee
agrees to devote his best efforts and full time, attention and skill in
performing the foregoing duties.
(b) Other Subsidiaries. Employee shall throughout the term of
this Agreement serve as Senior Vice President of each direct wholly-owned
subsidiary of MuniMae. Employee shall undertake the duties and responsibilities
appropriate to each such position and such as may be reasonably determined from
time to time by the CEO or the Board of MuniMae.
<PAGE>
(c) Assistance. Throughout the term of this Agreement,
Employee shall (i) use reasonable efforts to assist Employer in maintaining the
business and relationships of Midland and its subsidiaries, including without
limitation, maintaining Midland's relationships with FannieMae and with MAHGT
(as defined below) and each of its participating trusts, and (ii) recommend that
the President or other representative of MuniMae be elected a Trustee of MAHGT,
that the participating trusts extend the term of MAHGT, that Midland and its
subsidiaries remain the investment advisor to MAHGT, and that Midland and its
subsidiaries remain in control of all low-income housing tax credit equity
partnerships and other investments sponsored or arranged by any of them.
Employee does not warrant that any of the above relationships will or can be
maintained with his assistance or that his recommendation will be effective.
Employee shall not be deemed to be in breach of this Section 1(c) if Employee
must take action or refrain from taking an action contrary to the requirements
of this Section 1(c) in order to fulfill his fiduciary duties as s trustee of
MAHGT.
(d) Provided that such activity shall not violate any
provision of this Agreement (including the noncompetition provisions of Section
8 below) or materially interfere with his performance of his duties hereunder,
nothing herein shall prohibit Employee (i) from consulting with or serving as an
officer or director of any outside Boards with or on which he serves as of the
date hereof, a list of which is attached hereto, (ii) from participating in any
other business activities approved in advance by the CEO or by the Chairman of
the Board of Directors of MuniMae (the "Board") in accordance with any terms and
conditions of such approval, such approval not to be unreasonably withheld or
delayed, (iii) from engaging in charitable, civil, fraternal or trade group
activities, or (iv) from investing in other entities or business ventures.
2. Compensation. As compensation for performing the services
required by this Agreement, and during the term of this Agreement, Employee
shall compensated as follows:
(a) Base Compensation. Employer shall pay to Employee an
annual salary ("Base Compensation") of Two Hundred Fifty Thousand Dollars
($250,000), payable in accordance with the general policies and procedures of
the Employer for payment of salaries to executive personnel, but in any event no
less frequently than every two weeks, in substantially equal installments,
subject to withholding for applicable federal, state and local taxes. Increases
in Base Compensation shall be determined by the Compensation Committee of the
Board based on the recommendation of the CEO of MuniMae and on periodic reviews
of Employee's performance conducted on at least an annual basis, but shall not
be less than 5% per year during the term of this Agreement. During the term of
this Agreement, Employee's annual Base Compensation shall not be reduced below
the initial Base Compensation set forth above.
(b) Incentive Compensation. In addition to Base
Compensation, Employee shall be eligible to receive additional compensation
("Incentive Compensation"), pursuant to MuniMae's Incentive Compensation Plan as
then in effect. The Incentive Compensation Plan will provide that the amount of
the bonus will be based on a formula tied to Employer's achievement of specified
targets of growth in earnings available for distribution to shareholders as
determined by the Compensation Committee and the recommendation of the CEO of
MuniMae and the CEO of Midland. During the initial term of this Agreement,
Employee's Incentive Compensation shall be a percentage of Base Compensation as
follows: 15-30% if MuniMae achieves its threshold performance, 25-50% if MuniMae
achieves its target performance and 45-100% if MuniMae achieves its superior
performance goals; provided, however, that no Incentive Compensation shall be
payable for any year in which Midland does not achieve the Earn-out targets
subject to adjustment as provided in Sections 2.04(a) and 2.04(b) of the
Purchase Agreement (as hereinafter defined). Employee acknowledges that the
formula set forth in the Incentive Compensation Plan may vary for each employee
who participates therein. Incentive Compensation for any given fiscal year shall
be determined no later than 60 days after the end of Employer's fiscal year and
paid no later than 75 days after the end of the fiscal year. If Employee shall
be employed for only a portion of a fiscal year for which Employee is eligible
for Incentive Compensation, the amount of Incentive Compensation payable shall
be the amount payable for the full year reduced by the percentage which the
number of months (including any partial months) worked bears to twelve (the
"Proportionate Share").
<PAGE>
(c) Option to Acquire Shares. MuniMae has established and
Employee shall be entitled to participate throughout the term of this Agreement
in MuniMae's current Share Incentive Plan and any successor plan. Employee's
participation in such plan is subject to the terms thereof. Employee shall
initially be entitled to 87,500 options. Thereafter, the CEO of the Employer
shall from time to time recommend to the Compensation Committee of the Board
that Employee receive options to purchase Employer's Growth Shares. Such options
shall be exercisable at the market value of Growth Shares as of the date the
options are awarded. The CEO shall base his recommendation on comparable option
awards to employees having similar responsibilities in companies of comparable
business and size.
3. Employee Benefits. During the term of this Agreement, Employee and
his eligible dependents shall have the right to participate in any retirement,
pension, insurance, health or other benefit plan or program adopted by Employer
(or in which Employer participates) to the same extent as any other officer of
the Employer, subject, in the case of a plan or program, to all of the terms and
conditions thereof, and to any limitations imposed by law. To the extent that
Employee has similar benefits under a plan or program established by any other
entity, Employee shall nonetheless have the right to the benefits provided by
Employer's plan or program; provided, however, that where by the terms of any
plan or program, or under applicable law, Employee may only participate in one
such plan or program, Employee shall have the option to limit his participation
to the plan or program sponsored by Employer, or to such other plan or program.
Employee shall have the right, to the extent permitted under any applicable law,
to participate concurrently in plans or programs sponsored by others (including
self-employment plans or programs) and in plans or programs sponsored by
Employer. Employer agrees to pay for all club dues related to Employee's club
membership at Belleair Country Club.
4. Vacation, Sickness and Leaves of Absence. Employee shall be entitled
to the normal and customary amount of paid vacation provided to Employee by
Midland prior to the date hereof, but in no event less than 4 weeks during each
fiscal year . Employee shall provide Employer with reasonable notice of
anticipated vacation dates. Any vacation days that are not taken in a given
fiscal year shall accrue and carryover from year to year, and, upon any
termination of this Agreement for any reason whatsoever, all accrued and unused
vacation time will be paid to Employee within 10 days of such termination based
on his annual rate of Base Compensation in effect on the date of such
termination; provided, however, that no more than ten (10) days of accrued
vacation may be carried over at any time. In addition, Employee shall be
entitled to such sick leave and holidays, with pay, as Employer provides to
other officers. Unused sick leave shall be carried forward or compensated upon
termination of employment. Employee may also be granted leaves of absence with
or without pay for such valid and legitimate reasons as the Board on
recommendation from the CEO, in its sole and absolute discretion, may determine.
<PAGE>
5. Expenses. Employee shall be entitled to receive, within 14 days after
he has delivered to the Employer an itemized statement thereof, and after
presentation of such invoices or similar records as the Employer may reasonably
require, reimbursement for all necessary and reasonable expenses incurred by him
in connection with the performance of his duties.
6. Term. The initial term of this Agreement shall be for four years (the
"Initial Term"), commencing on October --, 1999 (the "Effective Date") unless
terminated sooner as provided in this Agreement, and shall automatically renew
for successive one year periods (each, a "Successive Term"), unless terminated
by either party in writing at least sixty (60) days prior to the end of the
Initial Term or any Successive Term. Any termination under this Agreement, other
than at the end of the Initial Term or any Successive Term, shall be subject to
Section 7 below.
7. Termination and Termination Benefits.
(a) Termination by Employer.
(i) Without Cause. Employer may terminate
this Agreement and Employee's employment at any time upon ninety (90) days prior
written notice to Employee, during which period Employer shall have the option
to require Employee to continue to perform his duties under this Agreement.
Employee shall be paid his Base Compensation and all other benefits to which he
is entitled under this Agreement up through the effective date of termination,
plus his Proportionate Share of Incentive Compensation for the year in which the
termination occurs. In addition all Eam-out Shares (as defined in the Stock
Purchase and Contribution Agreement dated September 30, 1999 between MuniMae,
Employee and others (the "Stock Purchase Agreement")) (i) which have been eamed
through the date of Employee's termination, and (ii) which may become payable
with respect to periods ending after the date of Employee's termination
notwithstanding that the Net Income (as defined in the Stock Purchase Agreement)
for such periods has not yet been determined, shall be immediately and
irrevocably issued by MuniMae to Employee.
(ii) With Cause. Employer may terminate
this Agreement with cause upon ten (10) days prior written notice to Employee.
In such event, Employee shall be paid his Base Compensation and all other
benefits to which he is entitled under this Agreement up through the effective
date of termination, plus his Proportionate Share of Incentive Compensation for
the year in which termination occurs. For purposes of this Section, termination
for cause shall mean (A) acts or omissions by the Employee with respect to the
Employer which constitute a knowing violation of law (unless consented to or
directed by Employer); (B) receipt by the Employee of money, property or
services from the Employer or from another person dealing with Employer in
violation of law or this Agreement, (C) breach by Employee of the noncompetition
provisions of this Agreement, or (D) gross negligence by the Employee in the
performance of his duties, or repeated failure by the Employee to perform
services that have been reasonably requested of him by the Board, following
notice in writing of such failure specifying the actions or omissions
constituting such failure or negligence and a reasonable opportunity to cure,
and if such requests are consistent with this Agreement. Notwithstanding any
termination of Employee for cause pursuant to this Section 7(a)(ii), Employee
shall continue to be entitled to Earn-out Shares to the extent provided in the
Stock Purchase Agreement.
<PAGE>
(iii) Disability. If due to illness, physical
or mental disability, or other incapacity, Employee shall fail to perform the
duties required by this Agreement, Employer may terminate this Agreement upon 30
days written notice to Employee. In such event, Employee shall be paid his Base
Compensation and receive all benefits owing to him under this Agreement through
the effective date of termination and shall receive his Proportionate Share of
Incentive Compensation for the year in which the termination occurs. Employee
shall be only considered disabled under this paragraph if he is unable to work
due to disability for a total of 120 or more business days during any 12-month
period. Nothing in this paragraph shall be construed to limit Employee's rights
to the benefits of any disability insurance policy provided by Employer and this
Section shall not be construed as varying the terms of any such policy in any
manner adverse to Employee. Notwithstanding any termination of Employee as a
result of disability pursuant to this Section 7(a)(iii), Employee shall continue
to be entitled to Earn-out Shares to the extent provided in the Stock Purchase
Agreement.
(b) Termination by Employee.
(i) Employee may terminate this
Agreement only upon good reason as defined in this Section 7(b) and only upon 90
days prior written notice to Employer. In such event, Employee shall be paid his
Base Compensation and shall receive all benefits through the date of termination
and shall receive his Proportionate Share of Incentive Compensation for the year
of termination.
(ii) Employee shall have "good reason"
to terminate his employment if (A) his Base Compensation, as in effect at any
given time, shall be reduced, (B) Employer shall fail to provide any of the
payments or benefits provided for under this Agreement, the Stock Purchase
Agreement, or the Registration Rights Agreement by and among Employee, Midland
and others, (C) Employer shall materially reduce or alter Employee's duties, (D)
Employer shall require Employee to take any act which would be a violation of
federal, state or local criminal law, and (E) Employer shall require Employee to
take any act which would not be in the best interests of the Employer and its
shareholders; (F) Employer shall require Employee to change the location of his
residence; (G) Employee is removed without his consent from the Board of
Directors of Midland; or (H) if MuniMae undertakes actions which the Employee
reasonably believes would affect the operations of Midland in a way which would
materially and adversely affect the ability of the Employee to earn the Eam-out
Shares, and the Employer and Employee are unable within sixty (60) days after
notice to Employer by Employee of Employee's objections to MuniMae's actions to
resolve in good faith such dispute.
<PAGE>
(iii) In the event the Employee terminates
his employment with Employer for good reason as defined in Section
7(b)(ii)(A)-(G), all Earn-out Shares (i) which have been earned through the date
of Employee's termination, and (ii) which may become payable with respect to
periods ending after the date of Employee's termination notwithstanding that the
Net Income for such periods has not yet been determined, shall be immediately
and irrevocably issued by MuniMae to Employee. In the event the Employee
terminates his employment with Employer for good reason as described in Section
7(b)(ii)(H), (x) all Earn-out Shares which have been earned through the date of
Employee's termination and one-half of all Earn-out Shares which may become
payable with respect to periods ending after the date of Employee's termination
notwithstanding that the Net Income for such periods has not yet been determined
shall be immediately and irrevocably issued by MuniMae to Employee, (y) Employee
shall continue to be entitled to Earn-out Shares to the extent provided in the
Stock Purchase Agreement; and (z) the stock ownership requirements set forth in
Section 10(g) shall be reduced to $1,200,000 and $500,000, respectively.
(c) Termination Compensation.
(i) Termination Without Cause or for
Good Reason. In the event of a termination of this Agreement prior to the end of
the Term, pursuant to Section 7(a)(i), 7(a)(iii) or 7(b), Employer, in addition
to the Base Compensation, benefits and Incentive Compensation payable as
provided in such sections, shall pay to Employee additional compensation
("Termination Compensation") as follows. If the termination does not follow a
Change in Control (as defined in subparagraph (ii) below), Termination
Compensation shall be equal to the Base Compensation that Employee would have
received during the remaining Term of this Agreement. Termination Compensation
shall be paid in four equal quarterly payments beginning on the first day of the
first calendar month following the termination date, unless Employer elects to
make such payments sooner.
(ii) Change in Control. The acquisition
of voting control of MuniMae by any one or more persons or entities who are
directly, or indirectly through one or more intermediaries, under common
control, or who are related to each other within the meaning of Sections 267 and
707(b) of the Internal Revenue Code, shall be deemed a "Change in Control." In
the event Employee is terminated within eighteen months of a Change in Control,
Termination Compensation shall be equal to the Base Compensation Employee would
have received during the remaining term of this Agreement, payable in a lump sum
on the effective date of Employee's termination. Such Termination Compensation
shall be in addition to all other compensation and benefits to which Employee is
entitled for a termination without cause under Section 7(a)(i) above, and shall
be payable even in the event of a termination effective as of the end of the
Term. In addition, in the event of a Change of Control, all Eam-out Shares (i)
which have been earned through the date of such Change of Control and (ii) which
may become payable with respect to periods ending after the date of the Change
of Control notwithstanding that the Net Income for such periods has not yet been
determined, shall be immediately and irrevocably issued by MuniMae to Employee.
(d) Death Benefit. Notwithstanding any other provision of
this Agreement, this Agreement shall terminate on the date of Employee's death.
In such event, Employee's estate shall be entitled only to the balance of the
Earn-Out Shares described in, and earned pursuant to, the Stock Purchase
Agreement.
<PAGE>
8. Covenant Not to Compete.
(a) Noncompetition. From and after the Effective Date and
continuing for 24 months following the termination of this Agreement,, Employee
shall not without the prior written consent of the Board engage in or carry on,
directly or indirectly, whether as an advisor, principal, agent, partner,
officer, director, employee, shareholder, associate or consultant of or to any
person, partnership, corporation or any other business entity, the business of
financing or asset management of multi-family apartment properties financed by
tax-exempt bonds or by loans funded by the participating trusts in the Midland
Affordable Housing Group Trust ("MAHGT") or by loans intended to be sold to
FannieMae; provided, however, if Employer terminates Employee without cause
under Section 7(a)(i) above, or the Employee resigns for good reason under
Section 7(b) above, this Section 8(a) shall not apply.
(b) Reasonable Restrictions. Employee acknowledges that the
restrictions of subparagraph (a) above are reasonable, fair and equitable in
scope, term and duration, are necessary to protect the legitimate business
interests of the Employer, and are a material inducement to the Employer to
enter into this Agreement. Employer and Employee both agree that in the event a
court shall determine any portion of the restrictions in subparagraph (a) are
not reasonable, the court may change such restrictions, including without
limitation the imposition of a geographical restriction and a different duration
restriction, to reflect a restriction which the court will enforce as
reasonable. In determining the reasonableness of the restrictions in
subparagraph (a), a Court shall consider the overall terms of this Agreement,
the acquisition by Municipal Mortgage & Equity, LLC of Employee's Stock in
Midland Financial Holdings, Inc., and the national scope of Employer's and
Midland's business.
(c) Specific Performance. [Under Discussion] Employee
acknowledges that the obligations undertaken by him pursuant to this Agreement
are unique and that if Employee shall fail to abide by any of the restrictions
set forth in subparagraph (a), or shall terminate this Agreement or his
employment without good reason as defined in Section 7(b), Employer will have no
adequate remedy at law. Employee therefore confirms that Employer shall have the
right, in the event of a violation of subparagraph (a), or a termination by
Employee without good reason, to injunctive relief to enforce the terms of this
Section 8 or, in the alternative, (i) in the case of a violation of subparagraph
(a) and not involving a termination by Employee without good reason, the right
to liquidated damages of $100,000, and (ii) in the case of a termination by
Employee without good reason, the right to the greater of (A) a forfeiture by
Employee of all Eam-Out Shares payable by MuniMae to Employee and not yet paid,
or (B) $500,000 in liquidated damages. This right to injunctive relief or
liquidated damages shall be Employer's exclusive remedy at law or in equity.
<PAGE>
9. Indemnification and Liability Insurance. Employer hereby agrees to
indemnify and hold Employee harmless, to the maximum extent allowed by law, from
any and all liability for acts or omissions of Employee performed in the course
of Employee's employment (or reasonably believed by Employee to be within the
scope of his employment) provided that such acts or omissions do not constitute
(a) criminal conduct, (b) willful misconduct, or (c) a fraud upon, or breach of
Employee's duty of loyalty to, the Employer. Employer shall at all times carry
Directors' and Officers' liability insurance in commercially reasonable amounts,
but in any event not less than One Million Dollars ($1,000,000).
10. Miscellaneous.
(a) Complete Agreement. This Agreement and the Stock Purchase
Agreement (the relevant terms of which are hereby incorporated by reference)
constitute the entire agreement among the parties with respect to the matters
set forth herein and supersedes all prior understandings and agreements between
the parties as to such matters. No amendments or modifications shall be binding
unless set forth in writing and signed by both parties.
(b) Successors and Assigns. Neither party may assign its
rights or interest under this Agreement without the prior written consent of the
other party, except that Employer's interest in this Agreement may be assigned
to (i) a successor by operation of law, (ii) or to a purchaser purchasing
substantially all of Employer's business, or (iii) to any subsidiary of MuniMae
which is directly or indirectly wholly-owned by MuniMae, and the term "Employer"
as used in this Agreement shall thereafter refer to such assignee.. This
Agreement shall be binding upon and shall inure to the benefit of each of the
parties and their respective permitted successors and assigns.
(c) Severability. Each provision of this Agreement is
severable, such that if any part of this Agreement shall be deemed invalid or
unenforceable, the balance of this Agreement shall be enforced so as to give
effect as to the intent of the parties.
(d) Representations of Employer. Employer represents and
warrants to Employee that it has the requisite limited liability company power
to enter into this Agreement and perform the terms hereof and that the
execution, delivery and performance of this Agreement have been duly authorized
by all appropriate company action.
(e) Construction. This Agreement shall be governed in all
respects by the internal laws of the State of Maryland (excluding reference to
principles of conflicts of law). As used herein, the singular shall include the
plural, the plural shall include the singular, and the use of any pronoun shall
be construed to refer to the masculine, feminine or neuter, all as the context
may require.
(f) Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed given on the date sent if
delivered by hand or by facsimile, and on the next business day if sent by
overnight courier or by United States mail, postage prepaid, to each party at
the following address (or at such other address as a party may specify by notice
under this section):
<PAGE>
If to Employer:
Municipal Mortgage & Equity, LLC
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Attention: Chief Executive Officer
If to Employee:
Keith J. Gloeckl
33 N. Garden Avenue
Suite 1200
Clearwater, Florida 33755
with a copy to:
Honigman, Miller, Schwartz and Cohn
2290 Pt National Building
Detroit, Michigan 48226
Attention: Gregory J. DeMars
(g) MuniMae Stock Ownership. At all times during the first
three years of the Initial Term of this Agreement, Employee shall hold MuniMae
Growth Shares with a value of not less than $2,400,000, and during the last year
of this Agreement Employee shall hold Growth Shares with a value of not less
than $1,000,000, in each case based on the value of such shares on the date
acquired.
(h) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Agreement as of the date and year first above written.
WITNESS: EMPLOYER:
MUNICIPAL MORTGAGE & EQUITY, LLC
/s/Chelsie Wolff By: /s/Michael L. Falcone
Chelsie Wolff Name: Michael L. Falcone
Title: President
EMPLOYEE:
/s/ Keith J. Gloeckl
Keith J. Gloeckl
<PAGE>
Exibit A to Gloeckl Employment Agreement
Permitted Outside Board Memberships
Director, National Housing and Rehabilitation Association
<PAGE>
EMPLOYMENT AGREEMENT
(Ray F. Mathis)
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 20th day of
October, 1999 by and between Municipal Mortgage & Equity, LLC, a Delaware
limited liability company ("Employer") and Ray F. Mathis ("Employee").
WHEREAS, Employer is engaged in the business of originating, servicing
and managing real estate and debt and equity investments therein, with a
particular emphasis on investments in, or secured by, multi-family properties,
congregate care and assisted living facilities and similar properties;
WHEREAS, Employee has particular skill, experience and background in
investments and asset management services of the type in which the Employer
primarily engages; and
WHEREAS, Employer and Employee desire to enter into an employment
relationship, the terms of which are to be set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employer and Employee
hereby agree as follows:
1. Employment and Duties.
(a) Midland. Employer agrees to hire Employee, and Employee
agrees to be employed by Employer, as Senior Vice President of Employer on the
terms and conditions provided in this Agreement. As his primaiy employment duty,
Employee shall throughout the term of this Agreement serve as a member of the
Board of Directors and the Chief Financial Officer of Midland Financial
Holdings, Inc. ("Midland"), a wholly-owned subsidiary of Municipal Mortgage &
Equity, LLC ("MuniMae"). Employee shall perform the duties and responsibilities
appropriate to each such position and such other duties and responsibilities as
may be reasonably determined from time to time by the Chief Executive Officer
("CEO") of Midland consistent with the types of duties and responsibilities
typically performed by a person serving in such positions in similar businesses.
Employee agrees to devote his best efforts and full time, attention and skill in
performing the foregoing duties.
(b) Other Subsidiaries. Employee shall throughout the term of
this Agreement serve as Senior Vice President of each direct wholly-owned
subsidiary of MuniMae. Employee shall undertake the duties and responsibilities
appropriate to each such position and such as may be reasonably determined from
time to time by the CEO or the Board of MuniMae.
(c) Assistance. Throughout the term of this Agreement,
Employee shall (i) use reasonable efforts to assist Employer in maintaining the
business and relationships of Midland and its subsidiaries, including without
limitation, maintaining Midland's relationships with FannieMae and with MAHGT
(as defined below) and each of its participating trusts, and (ii) recommend
that the President or other representative of MuniMae be elected a Trustee of
MAHGT, that the participating trusts extend the term of MAHGT, that Midland and
its subsidiaries remain the investment advisor to MAHGT, and that Midland and
its subsidiaries remain in control of all low-income housing tax credit equity
partnerships and other investments sponsored or arranged by any of them.
Employee does not warrant that any of the above relationships will or can be
maintained with his assistance or that his recommendation will be effective.
Employee shall not be deemed to be in breach of this Section 1(c) if Employee
must take action or refrain from taking an action contrary to the requirements
of this Section 1(c) in order to fulfill his fiduciary duties as s trustee of
MAHGT.
<PAGE>
(d) Provided that such activity shall not violate any
provision of this Agreement (including the noncompetition provisions of Section
8 below) or materially interfere with his performance of his duties hereunder,
nothing herein shall prohibit Employee (i) from consulting with or serving as an
officer or director of any outside Boards with or on which he serves as of the
date hereof, a list of which is attached hereto, (ii) from participating in any
other business activities approved in advance by the CEO or by the Chairman of
the Board of Directors of MuniMae (the "Board") in accordance with any terms and
conditions of such approval, such approval not to be unreasonably withheld or
delayed, (iii) from engaging in charitable, civil, fraternal or trade group
activities, or (iv) from investing in other entities or business ventures.
2. Base Compensation. As compensation for performing the services
required by this Agreement, and during the term of this Agreement, Employer
shall pay to Employee an annual salary ("Base Compensation") of One Hundred
Fifty Thousand Dollars ($150,000), payable in accordance with the general
policies and procedures of the Employer for payment of salaries to executive
personnel, but in any event no less frequently than every two weeks, in
substantially equal installments, subject to withholding for applicable federal,
state and local taxes. Increases in Base Compensation shall be determined by the
Compensation Committee of the Board based on the recommendation of the CEO of
MuniMae and on periodic reviews of Employee's performance conducted on at least
an annual basis, but shall not be less than 5% per year during the term of this
Agreement. During the term of this Agreement, Employee's annual Base
Compensation shall not be reduced below the initial Base Compensation set forth
above.
3. Employee Benefits. During the term of this Agreement, Employee and
his eligible dependents shall have the right to participate in any retirement,
pension, insurance, health or other benefit plan or program adopted by Employer
(or in which Employer participates) to the same extent as any other officer of
the Employer, subject, in the case of a plan or program, to all of the terms and
conditions thereof, and to any limitations imposed by law. To the extent that
Employee has similar benefits under a plan or program established by any other
entity, Employee shall nonetheless have the right to the benefits provided by
Employer's plan or program; provided, however, that where by the terms of any
plan or program, or under applicable law, Employee may only participate in one
such plan or program, Employee shall have the option to limit his participation
to the plan or program sponsored by Employer, or to such other plan or program.
Employee shall have the right, to the extent permitted under any applicable law,
to participate concurrently in plans or programs sponsored by others (including
self-employment plans or programs) and in plans or programs sponsored by
Employer.
<PAGE>
4. Vacation, Sickness and Leaves of Absence. Employee shall be entitled
to the normal and customary amount of paid vacation provided to Employee by
Midland prior to the date hereof, but in no event less than eight weeks during
each fiscal year. Employee shall provide Employer with reasonable notice of
anticipated vacation dates. Any vacation days that are not taken in a given
fiscal year shall accrue and carryover from year to year, and, upon any
termination of this Agreement for any reason whatsoever, all accrued and unused
vacation time will be pald to Employee within 10 days of such termination based
on his annual rate of Base Compensation in effect on the date of such
termination; provided, however, that no more than ten (10) days of accrued
vacation may be carried over at any time. In addition, Employee shall be
entitled to such sick leave and holidays, with pay, as Employer provides to
other officers. Unused sick leave shall be carried forward or compensated upon
termination of employment. Employee may also be granted leaves of absence with
or without pay for such valid and legitimate reasons as the Board on
recommendation from the CEO, in its sole and absolute discretion, may determine.
5. Expenses. Employee shall be entitled to receive, within 14 days
after he has delivered to the Employer an itemized statement thereof, and after
presentation of such invoices or similar records as the Employer may reasonably
require, reimbursement for all necessary and reasonable expenses incurred by him
in connection with the performance of his duties.
6. Term. The initial term of this Agreement shall be for one year (the
"Initial Term"), commencing on October , 1999 (the "Effective Date")
unless terminated sooner as provided herein. Any termination of this
Agreement shall be subject to Section 7 below.
7. Termination and Termination Benefits.
(a) Termination by Employer.
(i) Without Cause. Employer may
terminate this Agreement and Employee's employment at any time upon ninety (90)
days prior written notice to Employee, during which period Employer shall have
the option to require Employee to continue to perform his duties under this
Agreement. Employee shall be paid his Base Compensation and all other benefits
to which he is entitled under this Agreement up through the effective date of
termination, plus his Proportionate Share of Incentive Compensation for the year
in which the termination occurs. In addition all Earn-out Shares (as defined in
the Stock Purchase and Contribution Agreement dated September 30, 1999 between
MuniMae, Employee and others (the "Stock Purchase Agreement")) (i) which have
been earned through the date of Employee's termination, and (ii) which may
become payable with respect to periods ending after the date of Employee's
termination notwithstanding that the Net Income (as defined in the Stock
Purchase Agreement) for such periods has not yet been determined, shall be
immediately and irrevocably issued by MuniMae to Employee.
(ii) With Cause. Employer may terminate
this Agreement with cause upon ten (10) days prior written notice to Employee.
In such event, Employee shall be paid his Base Compensation and all other
benefits to which he is entitled under this Agreement up through the effective
date of termination, plus his Proportionate Share of Incentive Compensation for
the year in which termination occurs. For purposes of this Section, termination
for cause shall mean (A) acts or omissions by the Employee with respect to the
Employer which constitute a knowing violation of law (unless consented to or
directed by Employer); (B) receipt by the Employee of money, property or
services from the Employer or from another person dealing with Employer in
violation of law or this Agreement, (C) breach by Employee of the noncompetition
provisions of this Agreement, or (D) gross negligence by the Employee in the
performance of his duties, or repeated failure by the Employee to perform
services that have been reasonably requested of him by the Board, following
notice in writing of such failure or negligence specifying the actions or
omissions constituting such failure and a reasonable opportunity to cure, and if
such requests are consistent with this Agreement. Notwithstanding any
termination of Employee for cause pursuant to this Section 7(a)(ii), Employee
shall continue to be entitled to Earn-out Shares to the extent provided in the
Stock Purchase Agreement.
<PAGE>
(iii) Disability. If due to illness,
physical or mental disability, or other incapacity, Employee shall fail to
perform the duties required by this Agreement, Employer may terminate this
Agreement upon 30 days written notice to Employee. In such event, Employee shall
be paid his Base Compensation and receive all benefits owing to him under this
Agreement through the effective date of termination and shall receive his
Proportionate Share of Incentive Compensation for the year in which the
termination occurs. Employee shall be only considered disabled under this
paragraph if he is unable to work due to disability for a total of 120 or more
business days during any 12-month period. Nothing in this paragraph shall be
construed to limit Employee's rights to thebenefits of any disability insurance
policy provided by Employer and this Section shall not be construed as varying
the terms of any such policy in any manner adverse to Employee. Notwithstanding
any termination of Employee as a result of disability pursuant to this Section
7(a) (iii), Employee shall continue to be entitled to Earn-out Shares to the
extent provided in the Stock Purchase Agreement.
(b) Termination by Employee.
(i) Employee may terminate this
Agreement only upon good reason as defined in this Section 7(b) and only upon 90
days prior written notice to Employer. In such event, Employee shall be paid his
Base Compensation and shall receive all benefits through the date of termination
and shall receive his Proportionate Share of Incentive Compensation for the year
of termination.
(ii) Employee shall have "good reason"
to terminate his employment if (A) his Base Compensation, as in effect at any
given time, shall be reduced, (B) Employer shall fall to provide any of the
payments or benefits provided for under this Agreement, the Stock Purchase
Agreement, or the Registration Rights Agreement by and among Employee, MuniMae
and others, (C) Employer shall materially reduce or alter Employee's duties, (D)
Employer shall require Employee to take any act which would be a violation of
federal, state or local criminal law, and (E) Employer shall require Employee to
take any act which would not be in the best interests of the Employer and its
shareholders; (F) Employer shall require Employee to change the location of his
residence; (G) Employee is removed without his consent from the Board of
Directors of Midland; or (H) if MuniMae undertakes actions which the Employee
reasonably believes would affect the operations of Midland in a way which would
materially and adversely affect the ability of the Employee to earn the Earn-out
Shares, and the Employer and Employee are unable within sixty (60)days after
notice to Employer by Employee of Employee's objections to MuniMae's actions to
resolve in good faith such dispute.
<PAGE>
(iii) In the event the Employee
terminates his employment with Employer for good reason as defined in Section
7(b)(ii)(A)-(G), all Earn-out Shares (i) which have been earned through the date
of Employee's termination, and (ii) which may become payable with respect to
periods ending after the date of Employee's termination notwithstanding that the
Net Income for such periods has not yet been determined, shall be immediately
and irrevocably issued by MuniMae to Employee. In the event the Employee
terminates his employment with Employer for good reason as described in Section
7(b)(ii)(H), (x) all Earn-out Shares which have been earned through the date of
Employee's termination and one-half of all Earn-out Shares which may become
payable with respect to periods ending after the date of Employee's termination
notwithstanding that the Net Income for such periods has not yet been determined
shall be immediately and irrevocably issued by MuniMae to Employee, (y) Employee
shall continue to be entitled to Earn-out Shares to the extent provided in the
Stock Purchase Agreement; and (z) the stock ownership requirement set forth in
Section 10(g) shall be reduced to $1,200,000.
(c) Termination Compensation.
(i) Termination Without Cause or for
Good Reason. In the event of a termination of this Agreement prior to the end of
the Term, pursuant to Section 7(a)(i), 7(a)(iii) or 7(b), Employer, in addition
to the Base Compensation, benefits and Incentive Compensation payable as
provided in such sections, shall pay to Employee additional compensation
("Termination Compensation") as follows. If the termination does not follow a
Change in Control (as defined in subparagraph (ii) below), Termination
Compensation shall be equal to the Base Compensation that Employee would have
received during the remaining Term of this Agreement. Termination Compensation
shall be paid in four equal quarterly payments beginning on the first day of the
first calendar month following the termination date, unless Employer elects to
make such payments sooner.
<PAGE>
(ii) Change in Control. The acquisition
of voting control of MuniMae by any one or more persons or entities who are
directly, or indirectly through one or more intermediaries, under common
control, or who are related to each other within the meaning of Sections 267 and
707(b) of the Internal Revenue Code, shall be deemed a "Change in Control." In
the event Employee is terminated within eighteen months of a Change in Control,
Termination Compensation shall be equal to the Base Compensation Employee would
have received during the remaining term of this Agreement, payable in a lump sum
on the effective date of Employee's termination. Such Termination Compensation
shall be in addition to all other compensation and benefits to which Employee is
entitled for a termination without cause under Section 7(a)(i) above, and shall
be payable even in the event of a termination effective as of the end of the
Term. In addition, in the event of a Change of Control, all Earn-out Shares (i)
which have been earned through the date of such Change of Control and (ii) which
may become payable with respect to periods ending after the date of the Change
of Control notwithstanding that the Net Income for such periods has not yet been
determined, shall be immediately and irrevocably issued by MuniMae to Employee.
(d) Death Benefit. Notwithstanding any other provision of
this Agreement, this Agreement shall terminate on the date of Employee's death.
In such event, Employee's estate shall be entitled only to the balance of the
Earn-Out Shares described in, and earned pursuant to, the Stock Purchase
Agreement.
8. Covenant Not to Compete.
(a) Noncompetition. From and after the Effective Date and
continuing for 24 months following the termination of this Agreement,, Employee
shall not without the prior written consent of the Board engage in or carry on,
directly or indirectly, whether as an advisor, principal, agent, partner,
officer, director, employee, shareholder, associate or consultant of or to any
person, partnership, corporation or any other business entity, the business of
financing or asset management of multi-family apartment properties financed by
tax-exempt bonds or by loans funded by the participating trusts in the Midland
Affordable Housing Group Trust ("MAHGT") or by loans intended to be sold to
FannieMae; provided, however, if Employer terminates Employee without cause
under Section 7(a)(i) above, or the Employee resigns for good reason under
Section 7(b) above, this Section 8(a) shall not apply.
(b) Reasonable Restrictions. Employee acknowledges that the
restrictions of subparagraph (a) above are reasonable, fair and equitable in
scope, term and duration, are necessary to protect the legitimate business
interests of the Employer, and are a material inducement to the Employer to
enter into this Agreement. Employer and Employee both agree that in the event a
court shall determine any portion of the restrictions in subparagraph (a) are
not reasonable, the court may change such restrictions, including without
limitation the imposition of a geographical restriction and a different duration
restriction, to reflect a restriction which the court will enforce as
reasonable. In determining the reasonableness of the restrictions in
subparagraph (a), a Court shall consider the overall terms of this Agreement,
the acquisition by Municipal Mortgage & Equity, LLC of Employee's Stock in
Midland Financial Holdings, Inc., and the national scope of Employer's and
Midland's business.
<PAGE>
(c) Specific Performance. Employee acknowledges that the
obligations undertaken by him pursuant to this Agreement are unique and that if
Employee shall fail to abide by any of the restrictions set forth in
subparagraph (a), or shall terminate this Agreement or his employment without
good reason as defined in Section 7(b), Employer will have no adequate remedy at
law. Employee therefore confirms that Employer shall have the right, in the
event of a violation of subparagraph (a), or a termination by Employee without
good reason, to injunctive relief to enforce the terms of this Section 8 or, in
the alternative, (i) in the case of a violation of subparagraph (a) and not
involving a termination by Employee without good reason, the right to liquidated
damages of $100,000, and (ii) in the case of a termination by Employee without
good reason, the right to the greater of (A) a forfeiture by Employee of all
Earn-Out Shares payable by Munimae to Employee and not yet paid, or (B) $500,000
in liquidated damages. This right to injunctive relief or liquidated damages
shall be Employer's exclusive remedy at law or in equity.
9. Indemnification and Liability Insurance. Employer hereby agrees to
indenuiify and hold Employee harmless, to the maximum extent allowed by law,
from any and all liability for acts or omissions of Employee performed in the
course of Employee's employment (or reasonably believed by Employee to be within
the scope of his employment) provided that such acts or omissions do not
constitute (a) criminal conduct, (b) willful misconduct, or (c) a fraud upon, or
breach of Employee's duty of loyalty to, the Employer. Employer shall at all
times carry Directors' and Officers' liability insurance in commercially
reasonable amounts, but in any event not less than One Million Dollars
($1,000,000).
10. Miscellaneous.
(a) Complete Agreement. This Agreement and the Stock Purchase
Agreement (the relevant terms of which are hereby incorporated by reference)
constitute the entire agreement among the parties with respect to the matters
set forth herein and supersedes all prior understandings and agreements between
the parties as to such matters. No amendments or modifications shall be binding
unless set forth in writing and signed by both parties.
(b) Successors and Assigns. Neither party may assign its
rights or interest under this Agreement without the prior written consent of the
other party, except that Employer's interest in this Agreement may be assigned
to (1) a successor by operation of law, (ii) or to a purchaser purchasing
substantially all of Employer's business, or (iii) to any subsidiary of MuniMae
which is directly or indirectly wholly-owned by MuniMae, and the term "Employer"
as used in this Agreement shall thereafter refer to such assignee.. This
Agreement shall be binding upon and shall inure to the benefit of each of the
parties and their respective permitted successors and assigns.
(c) Severability. Each provision of this Agreement is
severable, such that if any part of this Agreement shall be deemed invalid or
unenforceable, the balance of this Agreement shall be enforced so as to give
effect as to the intent of the parties.
(d) Representations of Employer. Employer represents and
warrants to Employee that it has the requisite limited liability company
power to enter into this Agreement and perform the terms hereof and that the
execution, delivery and performance of this Agreement have been duly authorized
by all appropriate company action.
<PAGE>
(e) Construction. This Agreement shall be governed in all
respects by the internal laws of the State of Maryland (excluding reference to
principles of conflicts of law). As used herein, the singular shall include the
plural, the plural shall include the singular, and the use of any pronoun shall
be construed to refer to the masculine, feminine or neuter, all as the context
may require.
(f) Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed given on the date sent if
delivered by hand or by facsimile, and on the next business day if sent by
overnight courier or by United States mail, postage prepaid, to each party at
the following address (or at such other address as a party may specify by notice
under this section):
If to Employer:
Municipal Mortgage & Equity, LLC
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Attention: Chief Executive Officer
If to Employee:
Ray F. Mathis
33 N. Garden Avenue
Suite 1200
Clearwater, Florida 33755
with a copy to:
Honigman, Miller, Schwartz and Cohn
2290 Pt National Building
Detroit, Michigan 48226
Attention: Gregory J. DeMars
(g) MuniMae Stock Ownership. At all times during the Initial
Term of this Agreement, Employee shall hold MuniMae Growth Shares with a value
of not less than $2,400,000, based on the value of such shares on the date
acquired.
(h) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Agreement as of the date and year first above written.
WITNESS: EMPLOYER:
MUNICIPAL MORTGAGE & EQUITY, LLC
/s/Chelsie Wolff By: /s/Michael L. Falcone
Chelsie Wolff Name: Michael L. Falcone
Title: President
EMPLOYEE:
/s/William Budd /s/ Ray F. Mathis
William Budd Ray F. Mathis
<PAGE>
Exhibit A to Mathis Employment Agreement
Permitted Outside Board Memberships
Trustee, Ray F. Mathis Trust
<PAGE>
EMPLOYMENT AGREEMENT
(Mark K. Joseph)
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 31th day of
December, 1999 by and between Municipal Mortgage & Equity, LLC, a Delaware
limited liability company ("Employer") and Mark K. Joseph ("Employee").
WHEREAS, Employer is engaged in the business of acquiring and providing
asset management services for real estate and debt and equity investments
therein, with a particular emphasis on investments generating tax-exempt income
and investments in, or secured by, multi-family properties, congregate care and
assisted living facilities and similar properties;
WHEREAS, Employee has particular skill, experience and background in
investments and asset management services of the type in which the Employer
primarily engages; and
WHEREAS, Employer and Employee desire to enter into an employment
relationship, the terms of which are to be set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employer and Employee
hereby agree as follows:
1. Employment and Duties. Employer agrees to hire Employee, and Employee
agrees to be employed by Employer, as Chairman and Chief Executive Officer
("CEO") of Employer on the terms and conditions provided in this Agreement.
Employee shall perform the duties and responsibilities reasonably determined
from time to time by the Board of Directors of the Employer (the "Board")
consistent with the types of duties and responsibilities typically performed by
a person serving as Chairman and CEO of businesses similar to that of Employer.
Employee agrees to devote his best efforts, attention, skill and such time as he
determines is required to perform the duties of Chairman and CEO. Nothing herein
shall prohibit Employee (a) from being employed by, consulting with or serving
as an officer or director of Shelter Development Holdings, Inc. and its
subsidiaries and affiliates, (b) from participating in any other business
activities, (c) from engaging in charitable, civil, fraternal or trade group
activities, or (d) from investing in other entities or business ventures.
2. Compensation. As compensation for performing the services
required by this Agreement, and during the term of this Agreement, Employee
shall compensated as follows:
(a) Base Compensation. Employer shall pay to Employee an
annual salary ("Base Compensation") of Two Hundred Fifty Thousand Dollars
($250,000), payable in accordance with the general policies and procedures of
the Employer for payment of salaries to executive personnel, but in any event no
less frequently than every two weeks, in substantially equal installments,
subject to withholding for applicable federal, state and local taxes. Increases
in Base Compensation, if any, shall be determined by the Compensation Committee
of the Board (the "Compensation Committee"), but shall not be less than the
percentage increase per year in the Consumer Price Index - All Urban Wage
Earners and Clerical Workers. During the term of this Agreement, Employee's
annual Base Compensation shall not be less than the initial Base Compensation
plus the minimum percentage increases set forth in the previous sentence.
(b) Incentive Compensation. In addition to Base Compensation,
Employee shall be eligible to receive additional compensation ("Incentive
Compensation"), pursuant to an Incentive Compensation Plan to be adopted by the
Employer. The Incentive Compensation Plan will provide that Employee is eligible
to receive an annual cash bonus of up to 150% of Employee's Base Compensation
then in effect. The Incentive Compensation Plan will provide that the amount of
the bonus will be based on a program determined annually in advance by the
Compensation Committee. Employee acknowledges that the formula set forth in the
Incentive Compensation Plan may vary for each employee who participates therein.
Incentive Compensation for any given fiscal year shall be determined no later
than 60 days after the end of Employer's fiscal year and paid no later than 75
days after the close of the fiscal year. If Employee shall be employed for only
a portion of a fiscal year for which Employee is eligible for Incentive
Compensation, the amount of Incentive Compensation payable shall be the amount
payable for the full year reduced by the percentage which the number of months
(including any partial months) worked bears to twelve (the "Proportionate
Share").
(c) Long-Term Incentive Compensation. Employer has established
and Employee shall be entitled to participate throughout the term of this
Agreement in Employer's 1995 Share Incentive Plan and any successor plan.
Employee's participation in such plan is subject to the terms thereof. Employee
shall also be entitled to such other incentives as the Company may establish
from time to time on the recommendation of the Compensation Committee, including
without limitation stock options, share awards, opportunities to invest and
co-invest with or in Employer and its subsidiaries, and similar programs (all of
the foregoing being herein referred to as "Long-Term Incentives").
(d) Total Compensation Goal. Employer and Employee acknowledge
that, providing the Employee achieves yearly performance goals set out by the
CEO (or Compensation Committee in the case of Mark K. Joseph) and Employer
achieves targeted performance goals and is otherwise operating in sound
financial condition, it is their mutual objective for Employee's total annual
compensation (i.e., Base Compensation plus Incentive Compensation plus Long-Term
Incentives) to include sufficient Long-Term Incentives to achieve at least Six
Hundred Seventy-Five Thousand Dollars ($675,000) (the "Total Compensation
Goal"). Achieving this Total Compensation Goal or, in the case of superior
performance of both the Employer and Employee, a higher compensation, will be in
the discretion of the Compensation Committee and shall be based on Employee's
performance and the ability of Employer to pay such amount without adversely
impacting Employer's other financial objectives.
3. Employee Benefits.
(a) During the term of this Agreement, Employee and his
eligible dependents shall have the right to participate in any retirement,
pension, insurance, health or other benefit plan or program adopted by Employer
(or in which Employer participates) to the same extent as any other officer of
the Employer, subject, in the case of a plan or program, to all of the terms and
conditions thereof, and to any limitations imposed by law. To the extent that
Employee has similar benefits under a plan or program established by any other
entity, Employee shall nonetheless have the right to the benefits provided by
Employer's plan or program; provided, however, that where by the terms of any
plan or program, or under applicable law, Employee may only participate in one
such plan or program, Employee shall have the option to limit his participation
to the plan or program sponsored by Employer, or to such other plan or program.
Employee shall have the right, to the extent permitted under any applicable law,
to participate concurrently in plans or programs sponsored by others (including
self-employment plans or programs) and in plans or programs sponsored by
Employer.
(b) Tax Benefit Adjustment. If, as a result of any acquisition
of Growth Shares by Employee, Employee shall either lose personal income tax
deductions, be required to report additional personal taxable income, or be
required to pay additional taxes or charges, which deductions, income or taxes
would not have been lost, reportable, or payable, as the case may be, had
Employee not owned any Growth Shares, Employer shall pay Employee a bonus on
April 1 of each calendar year equal to all additional taxes or charges Employee
is required to pay, attributable to the prior calendar year, which would not
have been payable had Employee not owned Growth Shares.
4. [Reserved].
5. Expenses. Employee shall be entitled to receive, within 14 days after
he has delivered to the Employer an itemized statement thereof, and after
presentation of such invoices or similar records as the Employer may reasonably
require, reimbursement for all necessary and reasonable expenses incurred by him
in connection with the performance of his duties.
6. Term. The initial term of this Agreement shall be for three years
(the "Initial Term"), commencing on the date set forth in the opening paragraph
of this Agreement (the "Effective Date"). The term of this Agreement in effect
at any given time is herein referred to as the "Term". Any termination under of
this Agreement shall be subject to Section 7 below.
7. Termination and Termination Benefits.
(a) Termination by Employer.
(i) Without Cause. Employer may
terminate this Agreement and Employee's employment at any time upon ninety (90)
days prior written notice to Employee, during which period Employer shall have
the option to require Employee to continue to perform his duties under this
Agreement. Employee shall be paid his Base Compensation and all other benefits
to which he is entitled under this Agreement up through the effective date of
termination, plus his Proportionate Share of Incentive Compensation for the year
in which the termination occurs.
(ii) With Cause. Employer may terminate
this Agreement with cause upon ten (10) days prior written notice to Employee.
In such event, Employee shall be paid his Base Compensation and all other
benefits to which he is entitled under this Agreement up through the effective
date of termination, plus his Proportionate Share of Incentive Compensation for
the year in which termination occurs. For purposes of this Section, termination
for cause shall mean (A) acts or omissions by the Employee with respect to the
Employer which constitute intentional misconduct or a knowing violation of law;
(B) receipt by the Employee of money, property or services from the Employer or
from another person dealing with Employer in violation of law or this Agreement,
(C) breach by Employee of the non-competition provisions of this Agreement, (D)
breach by the Employee of his duty of loyalty to the Employer, (E) gross
negligence by the Employee in the performance of his duties, or (F) repeated
failure by the Employee to perform services that have been reasonably requested
of him by the Board, following notice and an opportunity to cure and if such
requests are consistent with this Agreement.
(iii) Disability. If due to illness, physical or mental disability, or other
incapacity, Employee shall fail to perform the duties required by this
Agreement, Employer may terminate this Agreement upon 30 days written notice to
Employee. In such event, Employee shall be paid his Base Compensation and
receive all benefits owing to him under this Agreement through the effective
date of termination and shall receive his Proportionate Share of Incentive
Compensation for the year in which the termination occurs. Employee shall be
considered disabled under this paragraph if he is unable to work due to
disability for a total of 120 or more business days during any 12-month period.
Nothing in this paragraph shall be construed to limit Employee's rights to the
benefits of any disability insurance policy provided by Employer and this
Section shall not be construed as varying the terms of any such policy in any
manner adverse to Employee.
(b) Termination by Employee. Employee may terminate this
Agreement for good reason upon 90 days prior written notice to Employer. In such
event, Employee shall be paid his Base Compensation and shall receive all
benefits through the date of termination and shall receive his Proportionate
Share of Incentive Compensation for the year of termination. Employee shall have
"good reason" to terminate his employment if (i) his Base Compensation, as in
effect at any given time, shall be reduced without his consent, (ii) Employer
shall fail to provide any of the payments or benefits provided for under this
Agreement, (iii) Employer shall materially reduce or alter Employee's duties as
Chairman and CEO, (iv) Employer shall require Employee to take any act which
would be a violation of federal, state or local criminal law, and (v) Employer
shall require Employee to take any act which would not be in the best interests
of the Employer and its shareholders.
(c) Termination Compensation.
(i) Termination Without Cause or for
Good Reason. In the event of a termination of this Agreement prior to the end of
the Term, pursuant to Section 7(a)(i), 7(a)(iii) or 7(b), or in the event of
nonrenewal by the Employer at the end of the Term for reasons other than as set
forth in Section 7(a)(ii), Employer, in addition to the Base Compensation,
benefits and Incentive Compensation payable as provided in such sections, shall
pay to Employee additional compensation ("Termination Compensation") as follows.
If the termination does not follow a Change in Control (as defined in
subparagraph (ii) below), Termination Compensation shall be equal to 36 months
Base Compensation. Termination Compensation shall be paid in four equal
quarterly payments beginning on the first day of the first calendar month
following the termination date, unless Employer elects to make such payments
sooner.
(ii) Change in Control. The acquisition
of voting control of the Employer by any one or more persons or entities who are
directly, or indirectly through one or more intermediaries, under common
control, or who are related to each other within the meaning of Sections 267 and
707(b) of the Internal Revenue Code, shall be deemed a "Change in Control." In
the event Employee ceases to be employed by the Company within two years of a
Change in Control, Termination Compensation shall be equal to three times the
Total Compensation Goal, payable in a lump sum on the effective date of a Change
in Control. Such Termination Compensation shall be in addition to all other
compensation and benefits to which Employee is entitled for a termination
without cause under Section 7(a)(i) above, and shall be payable even in the
event of a termination effective as of the end of the Term.
(d) Death Benefit. Notwithstanding any other provision of this
Agreement, this Agreement shall terminate on the date of Employee's death. In
such event, Employee's estate shall be paid two years' Base Compensation as
follows: to the extent of any insurance carried by Employer on Employee's life,
the death benefit shall be payable in a lump sum within five (5) business days'
of Employer's receipt of the insurance proceeds; any portion of the death
benefit not covered by insurance shall be paid in eight equal installments
payable on the first day of each calendar quarter following Employee's death.
Employer shall carry as much life insurance on Employee's life as the Board may
from time to time determine.
8. Covenant Not to Compete.
(a) Non-competition. From and after the Effective Date and
continuing for the longer of (i) 12 months following the termination of this
Agreement or (ii) the remainder of the Term of this Agreement, Employee shall
not within the State of Maryland engage in or carry on, directly or indirectly,
whether as an advisor, principal, agent, partner, officer, director, employee,
shareholder, associate or consultant of or to any person, partnership,
corporation or any other business entity, the business of financing or asset
management of multi-family apartment properties without the prior written
consent of the Board; provided, however, if Employer terminates Employee without
cause under Section 7(a)(i) above, the Employee resigns for good reason under
Section 7(b) above, or a Change in Control occurs, this Section 8(a) shall not
apply.
(b) Reasonable Restrictions. Employee acknowledges that the
restrictions of subparagraph (a) above are reasonable, fair and equitable in
scope, term and duration, are necessary to protect the legitimate business
interests of the Employer, and are a material inducement to the Employer to
enter into this Agreement. Employer and Employee both agree that in the event a
court shall determine any portion of the restrictions in subparagraph (a) are
not reasonable, the court may change such restrictions, including without
limitation the geographical restrictions and the duration restrictions, to
reflect a restriction which the court will enforce as reasonable.
(c) Specific Performance. Employee acknowledges that the
obligations undertaken by him pursuant to this Agreement are unique and that if
Employee shall fail to abide by any of the restrictions set forth in
subparagraph (a), Employer will have no adequate remedy at law. Employee
therefore confirms that Employer shall have the right, in the event of a
violation of subparagraph (a), to injunctive relief to enforce the terms of this
Section 8 or, in the alternative, the right to $150,000 in liquidated damages.
This right to injunctive relief or liquidated damages shall be Employer's
exclusive remedy at law or in equity.
9. Indemnification and Liability Insurance. Employer hereby agrees to
indemnify and hold Employee harmless, to the maximum extent allowed by law, from
any and all liability for acts or omissions of Employee performed in the course
of Employee's employment (or reasonably believed by Employee to be within the
scope of his employment) provided that such acts or omissions do not constitute
(a) criminal conduct, (b) willful misconduct, or (c) a fraud upon, or breach of
Employee's duty of loyalty to, the Employer. Employer shall at all times carry
Directors' and Officers' liability insurance in commercially reasonable amounts,
but in any event not less than One Million Dollars ($1,000,000).
10. Miscellaneous.
(a) Complete Agreement. This Agreement and any existing stock
option or other Share Award plans constitute the entire agreement among the
parties with respect to the matters set forth herein and supersedes all prior
understandings and agreements between the parties as to such matters. No
amendments or modifications shall be binding unless set forth in writing and
signed by both parties.
(b) Successors and Assigns. Neither party may assign its
rights or interest under this Agreement without the prior written consent of the
other party, except that Employer's interest in this Agreement may be assigned
to a successor by operation of law or to a purchaser purchasing substantially
all of Employer's business. This Agreement shall be binding upon and shall inure
to the benefit of each of the parties and their respective permitted successors
and assigns.
(c) Severability. Each provision of this Agreement is
severable, such that if any part of this Agreement shall be deemed invalid or
unenforceable, the balance of this Agreement shall be enforced so as to give
effect as to the intent of the parties.
(d) Representations of Employer. Employer represents and
warrants to Employee that it has the requisite limited liability company power
to enter into this Agreement and perform the terms hereof and that the
execution, delivery and performance of this Agreement have been duly authorized
by all appropriate company action.
(e) Construction. This Agreement shall be governed in all
respects by the internal laws of the State of Maryland (excluding reference to
principles of conflicts of law). As used herein, the singular shall include the
plural, the plural shall include the singular, and the use of any pronoun shall
be construed to refer to the masculine, feminine or neuter, all as the context
may require.
(f) Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed given on the date sent if
delivered by hand or by facsimile, and on the next business day if sent by
overnight courier or by United States mail, postage prepaid, to each party at
the following address (or at such other address as a party may specify by notice
under this section):
If to Employer:
Municipal Mortgage & Equity, LLC
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Attention: President
If to Employee:
Mark K. Joseph
1006 Winding Way
Baltimore, Maryland 21210
(g) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one instrument.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Agreement as of the date and year first above written.
WITNESS: EMPLOYER:
MUNICIPAL MORTGAGE & EQUITY, LLC
/s/Melva Balducci By:
Melva Balducci /s/ Michael L. Falcone
Michael L. Falcone
President
EMPLOYEE:
/s/Melva Balducci /s/ Mark K. Joseph
Melva Balducci Mark K. Joseph
<PAGE>
EMPLOYMENT AGREEMENT
(Michael L. Falcone)
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 31st day of
December, 1999 by and between Municipal Mortgage & Equity, LLC, a Delaware
limited liability company ("Employer") and Michael L. Falcone ("Employee").
WHEREAS, Employer is engaged in the business of acquiring and providing
asset management services for real estate and debt and equity investments
therein, with a particular emphasis on investments generating tax-exempt income
and investments in, or secured by, multi-family properties, congregate care and
assisted living facilities and similar properties;
WHEREAS, Employee has particular skill, experience and background in
investments and asset management services of the type in which the Employer
primarily engages; and
WHEREAS, Employer and Employee desire to enter into an employment
relationship, the terms of which are to be set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employer and Employee
hereby agree as follows:
1. Employment and Duties. Employer agrees to hire Employee, and Employee
agrees to be employed by Employer, as President and Chief Operating Officer
("COO") of Employer on the terms and conditions provided in this Agreement.
Employee shall perform the duties and responsibilities reasonably determined
from time to time by the Chief Executive Officer ("CEO") of the Employer
consistent with the types of duties and responsibilities typically performed by
a person serving as President and COO of businesses similar to that of Employer.
Employee agrees to devote his best efforts and full time, attention and skill in
performing the duties of President and COO. Provided that such activity shall
not violate any provision of this Agreement (including the non-competition
provisions of Section 8 below) or materially interfere with his performance of
his duties hereunder, nothing herein shall prohibit Employee (a) from consulting
with or serving as an officer or member of Shelter Development, LLC and its
subsidiaries and affiliates, (b) from participating in any other business
activities approved in advance by the CEO or by the Chairman of the Board of
Directors (the "Board") in accordance with any terms and conditions of such
approval, such approval not to be unreasonably withheld or delayed, (c) from
engaging in charitable, civil, fraternal or trade group activities, or (d) from
investing in other entities or business ventures.
2. Compensation. As compensation for performing the services
required by this Agreement, and during the term of this Agreement, Employee
shall compensated as follows:
(a) Base Compensation. Employer shall pay to Employee an
annual salary ("Base Compensation") of Two Hundred Fifty Thousand Dollars
($250,000), payable in accordance with the general policies and procedures of
the Employer for payment of salaries to executive personnel, but in any event no
less frequently than every two weeks, in substantially equal installments,
subject to withholding for applicable federal, state and local taxes. Increases
in Base Compensation, if any, shall be determined by the Compensation Committee
of the Board (the "Compensation Committee") based on the recommendation of the
CEO and on periodic reviews of Employee's performance conducted on at least an
annual basis, but shall not be less than the percentage increase per year in the
Consumer Price Index - All Urban Wage Earners and Clerical Workers. During the
term of this Agreement, Employee's annual Base Compensation shall not be less
than the initial Base Compensation plus the minimum percentage increases set
forth in the previous sentence.
(b) Incentive Compensation. In addition to Base Compensation,
Employee shall be eligible to receive additional compensation ("Incentive
Compensation"), pursuant to an Incentive Compensation Plan to be adopted by the
Employer. The Incentive Compensation Plan will provide that Employee is eligible
to receive an annual cash bonus of up to 100% of Employee's Base Compensation
then in effect. The Incentive Compensation Plan will provide that the amount of
the bonus will be based on a program determined annually in advance by the
Compensation Committee on the recommendation of the CEO. Employee acknowledges
that the formula set forth in the Incentive Compensation Plan may vary for each
employee who participates therein. Incentive Compensation for any given fiscal
year shall be determined no later than 60 days after the end of Employer's
fiscal year and paid no later than 75 days after the close of the fiscal year.
If Employee shall be employed for only a portion of a fiscal year for which
Employee is eligible for Incentive Compensation, the amount of Incentive
Compensation payable shall be the amount payable for the full year reduced by
the percentage which the number of months (including any partial months) worked
bears to twelve (the "Proportionate Share").
(c) Long-Term Incentive Compensation. Employer has established
and Employee shall be entitled to participate throughout the term of this
Agreement in Employer's 1995 Share Incentive Plan and any successor plan.
Employee's participation in such plan is subject to the terms thereof. Employee
shall also be entitled to such other incentives as the Company may establish
from time to time on the recommendation of the Compensation Committee, including
without limitation stock options, share awards, opportunities to invest and
co-invest with or in Employer and its subsidiaries, and similar programs (all of
the foregoing being herein referred to as "Long-Term Incentives").
(d) Total Compensation Goal. Employer and Employee acknowledge
that, providing the Employee achieves yearly performance goals set out by the
CEO (or Compensation Committee in the case of Mark K. Joseph) and Employer
achieves targeted performance goals and is otherwise operating in sound
financial condition, it is their mutual objective for Employee's total annual
compensation (i.e., Base Compensation plus Incentive Compensation plus Long-Term
Incentives) to include sufficient Long-Term Incentives to achieve at least Six
Hundred Fifty Thousand Dollars ($650,000) (the "Total Compensation Goal").
Achieving this Total Compensation Goal or, in the case of superior performance
of both the Employer and Employee, a higher compensation, will be in the
discretion of the Compensation Committee and shall be based on Employee's
performance and the ability of Employer to pay such amount without adversely
impacting Employer's other financial objectives.
3. Employee Benefits.
(a) During the term of this Agreement, Employee and his
eligible dependents shall have the right to participate in any retirement,
pension, insurance, health or other benefit plan or program adopted by Employer
(or in which Employer participates) to the same extent as any other officer of
the Employer, subject, in the case of a plan or program, to all of the terms and
conditions thereof, and to any limitations imposed by law. To the extent that
Employee has similar benefits under a plan or program established by any other
entity, Employee shall nonetheless have the right to the benefits provided by
Employer's plan or program; provided, however, that where by the terms of any
plan or program, or under applicable law, Employee may only participate in one
such plan or program, Employee shall have the option to limit his participation
to the plan or program sponsored by Employer, or to such other plan or program.
Employee shall have the right, to the extent permitted under any applicable law,
to participate concurrently in plans or programs sponsored by others (including
self-employment plans or programs) and in plans or programs sponsored by
Employer.
(b) Tax Benefit Adjustment. If, as a result of any acquisition
of Growth Shares by Employee, Employee shall either lose personal income tax
deductions, be required to report additional personal taxable income, or be
required to pay additional taxes or charges, which deductions, income or taxes
would not have been lost, reportable, or payable, as the case may be, had
Employee not owned any Growth Shares, Employer shall pay Employee a bonus on
April 1 of each calendar year equal to all additional taxes or charges Employee
is required to pay, attributable to the prior calendar year, which would not
have been payable had Employee not owned Growth Shares.
4. Vacation, Sickness and Leaves of Absence. Employee shall be entitled
to the normal and customary amount of paid vacation provided to officers of
Employer, but in no event less than six weeks during each fiscal year. Employee
shall provide Employer with reasonable notice of anticipated vacation dates. Any
vacation days that are not taken in a given fiscal year shall accrue and
carryover from year to year, and, upon any termination of this Agreement for any
reason whatsoever, all accrued and unused vacation time will be paid to Employee
within 10 days of such termination based on his annual rate of Base Compensation
in effect on the date of such termination; provided, however, that no more than
20 days of accrued vacation may be carried over at any time. In addition,
Employee shall be entitled to such sick leave and holidays, with pay, as
Employer provides to other officers. Unused sick leave shall be carried forward
or compensated upon termination of employment. Employee may also be granted
leaves of absence with or without pay for such valid and legitimate reasons as
the Board on recommendation from the CEO, in its sole and absolute discretion,
may determine.
5. Expenses. Employee shall be entitled to receive, within 14 days after
he has delivered to the Employer an itemized statement thereof, and after
presentation of such invoices or similar records as the Employer may reasonably
require, reimbursement for all necessary and reasonable expenses incurred by him
in connection with the performance of his duties.
6. Term. The initial term of this Agreement shall be for three years
(the "Initial Term"), commencing on the date set forth in the opening paragraph
of this Agreement (the "Effective Date"). The term of this Agreement in effect
at any given time is herein referred to as the "Term". Any termination under of
this Agreement shall be subject to Section 7 below.
7. Termination and Termination Benefits.
(a) Termination by Employer.
(i) Without Cause. Employer may
terminate this Agreement and Employee's employment at any time upon ninety (90)
days prior written notice to Employee, during which period Employer shall have
the option to require Employee to continue to perform his duties under this
Agreement. Employee shall be paid his Base Compensation and all other benefits
to which he is entitled under this Agreement up through the effective date of
termination, plus his Proportionate Share of Incentive Compensation for the year
in which the termination occurs.
(ii) With Cause. Employer may terminate
this Agreement with cause upon ten (10) days prior written notice to Employee.
In such event, Employee shall be paid his Base Compensation and all other
benefits to which he is entitled under this Agreement up through the effective
date of termination, plus his Proportionate Share of Incentive Compensation for
the year in which termination occurs. For purposes of this Section, termination
for cause shall mean (A) acts or omissions by the Employee with respect to the
Employer which constitute intentional misconduct or a knowing violation of law;
(B) receipt by the Employee of money, property or services from the Employer or
from another person dealing with Employer in violation of law or this Agreement,
(C) breach by Employee of the non-competition provisions of this Agreement, (D)
breach by the Employee of his duty of loyalty to the Employer, (E) gross
negligence by the Employee in the performance of his duties, or (F) repeated
failure by the Employee to perform services that have been reasonably requested
of him by the Board, following notice and opportunity to cure and if such
requests are consistent with this Agreement.
(iii) Disability. If due to illness,
physical or mental disability, or other incapacity, Employee shall fail to
perform the duties required by this Agreement, Employer may terminate this
Agreement upon 30 days written notice to Employee. In such event, Employee shall
be paid his Base Compensation and receive all benefits owing to him under this
Agreement through the effective date of termination and shall receive his
Proportionate Share of Incentive Compensation for the year in which the
termination occurs. Employee shall be considered disabled under this paragraph
if he is unable to work due to disability for a total of 120 or more business
days during any 12-month period. Nothing in this paragraph shall be construed to
limit Employee's rights to the benefits of any disability insurance policy
provided by Employer and this Section shall not be construed as varying the
terms of any such policy in any manner adverse to Employee.
(b) Termination by Employee. Employee may terminate this
Agreement for good reason upon 90 days prior written notice to Employer. In such
event, Employee shall be paid his Base Compensation and shall receive all
benefits through the date of termination and shall receive his Proportionate
Share of Incentive Compensation for the year of termination. Employee shall have
"good reason" to terminate his employment if (i) his Base Compensation, as in
effect at any given time, shall be reduced without his consent, (ii) Employer
shall fail to provide any of the payments or benefits provided for under this
Agreement, (iii) Employer shall materially reduce or alter Employee's duties as
President, (iv) Employer shall require Employee to take any act which would be a
violation of federal, state or local criminal law, and (v) Employer shall
require Employee to take any act which would not be in the best interests of the
Employer and its shareholders.
(c) Termination Compensation.
(i) Termination Without Cause or for
Good Reason. In the event of a termination of this Agreement prior to the end of
the Term, pursuant to Section 7(a)(i), 7(a)(iii) or 7(b), Employer, in addition
to the Base Compensation, benefits and Incentive Compensation payable as
provided in such sections, shall pay to Employee additional compensation
("Termination Compensation") as follows. If the termination does not follow a
Change in Control (as defined in subparagraph (ii) below), Termination
Compensation shall be equal to the greater of (a) 18 months Base Compensation or
(b) the Base Compensation that Employee would have received during the remaining
Term of this Agreement. Termination Compensation shall be paid in four equal
quarterly payments beginning on the first day of the first calendar month
following the termination date, unless Employer elects to make such payments
sooner.
(ii) Change in Control. The acquisition
of voting control of the Employer by any one or more persons or entities who are
directly, or indirectly through one or more intermediaries, under common
control, or who are related to each other within the meaning of Sections 267 and
707(b) of the Internal Revenue Code, shall be deemed a "Change in Control." In
the event Employee ceases to be employed by the Company within eighteen months
of a Change in Control, Termination Compensation shall be equal to three times
the Total Compensation Goal, payable in a lump sum on the effective date of the
Change in Control. Such Termination Compensation shall be in addition to all
other compensation and benefits to which Employee is entitled for a termination
without cause under Section 7(a)(i) above, and shall be payable even in the
event of a termination effective as of the end of the Term.
(d) Death Benefit. Notwithstanding any other provision of this
Agreement, this Agreement shall terminate on the date of Employee's death. In
such event, Employee's estate shall be paid two years' Base Compensation as
follows: to the extent of any insurance carried by Employer on Employee's life,
the death benefit shall be payable in a lump sum within five (5) business days'
of Employer's receipt of the insurance proceeds; any portion of the death
benefit not covered by insurance shall be paid in eight equal installments
payable on the first day of each calendar quarter following Employee's death.
Employer shall carry as much life insurance on Employee's life as the Board on
recommendation of the CEO may from time to time determine.
8. Covenant Not to Compete.
(a) Non-competition. From and after the Effective Date and
continuing for the longer of (i) 12 months following the termination of this
Agreement or (ii) the remainder of the Term of this Agreement, Employee shall
not within the State of Maryland engage in or carry on, directly or indirectly,
whether as an advisor, principal, agent, partner, officer, director, employee,
shareholder, associate or consultant of or to any person, partnership,
corporation or any other business entity, the business of financing or asset
management of multi-family apartment properties without the prior written
consent of the Board; provided, however, if Employer terminates Employee without
cause under Section 7(a)(i) above, the Employee resigns for good reason under
Section 7(b) above, or a Change in Control occurs, this Section 8(a) shall not
apply.
(b) Reasonable Restrictions. Employee acknowledges that the
restrictions of subparagraph (a) above are reasonable, fair and equitable in
scope, term and duration, are necessary to protect the legitimate business
interests of the Employer, and are a material inducement to the Employer to
enter into this Agreement. Employer and Employee both agree that in the event a
court shall determine any portion of the restrictions in subparagraph (a) are
not reasonable, the court may change such restrictions, including without
limitation the geographical restrictions and the duration restrictions, to
reflect a restriction which the court will enforce as reasonable.
(c) Specific Performance. Employee acknowledges that the
obligations undertaken by him pursuant to this Agreement are unique and that if
Employee shall fail to abide by any of the restrictions set forth in
subparagraph (a), Employer will have no adequate remedy at law. Employee
therefore confirms that Employer shall have the right, in the event of a
violation of subparagraph (a), to injunctive relief to enforce the terms of this
Section 8 or, in the alternative, the right to $150,000 in liquidated damages.
This right to injunctive relief or liquidated damages shall be Employer's
exclusive remedy at law or in equity.
9. Indemnification and Liability Insurance. Employer hereby agrees to
indemnify and hold Employee harmless, to the maximum extent allowed by law, from
any and all liability for acts or omissions of Employee performed in the course
of Employee's employment (or reasonably believed by Employee to be within the
scope of his employment) provided that such acts or omissions do not constitute
(a) criminal conduct, (b) willful misconduct, or (c) a fraud upon, or breach of
Employee's duty of loyalty to, the Employer. Employer shall at all times carry
Directors' and Officers' liability insurance in commercially reasonable amounts,
but in any event not less than One Million Dollars ($1,000,000).
10. Miscellaneous.
(a) Complete Agreement. This Agreement and any existing stock
option or other Share Award plan constitute the entire agreement among the
parties with respect to the matters set forth herein and supersedes all prior
understandings and agreements between the parties as to such matters. No
amendments or modifications shall be binding unless set forth in writing and
signed by both parties.
(b) Successors and Assigns. Neither party may assign its
rights or interest under this Agreement without the prior written consent of the
other party, except that Employer's interest in this Agreement may be assigned
to a successor by operation of law or to a purchaser purchasing substantially
all of Employer's business. This Agreement shall be binding upon and shall inure
to the benefit of each of the parties and their respective permitted successors
and assigns.
(c) Severability. Each provision of this Agreement is
severable, such that if any part of this Agreement shall be deemed invalid or
unenforceable, the balance of this Agreement shall be enforced so as to give
effect as to the intent of the parties.
(d) Representations of Employer. Employer represents and
warrants to Employee that it has the requisite limited liability company power
to enter into this Agreement and perform the terms hereof and that the
execution, delivery and performance of this Agreement have been duly authorized
by all appropriate company action.
(e) Construction. This Agreement shall be governed in all
respects by the internal laws of the State of Maryland (excluding reference to
principles of conflicts of law). As used herein, the singular shall include the
plural, the plural shall include the singular, and the use of any pronoun shall
be construed to refer to the masculine, feminine or neuter, all as the context
may require.
(f) Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed given on the date sent if
delivered by hand or by facsimile, and on the next business day if sent by
overnight courier or by United States mail, postage prepaid, to each party at
the following address (or at such other address as a party may specify by notice
under this section):
If to Employer:
Municipal Mortgage & Equity, LLC
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Attention: Chief Executive Officer
If to Employee:
Michael L. Falcone
8 Englewood Road
Baltimore, Maryland 21210
(g) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Agreement as of the date and year first above written.
WITNESS: EMPLOYER:
MUNICIPAL MORTGAGE & EQUITY, LLC
By:
/s/Melva Balducci /s/ Mark K. Joseph
Melva Balducci Mark K. Joseph
Chief Executive Officer
EMPLOYEE:
/s/Melva Balducci /s/ Michael L. Falcone
Melva Balducci Michael L. Falcone
<PAGE>
EMPLOYMENT AGREEMENT
(Gary A. Mentesana)
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 31st day of
December, 1999 by and between Municipal Mortgage & Equity, LLC, a Delaware
limited liability company ("Employer") and Gary A. Mentesana ("Employee").
WHEREAS, Employer is engaged in the business of acquiring and providing
asset management services for real estate and debt and equity investments
therein, with a particular emphasis on investments generating tax-exempt income
and investments in, or secured by, multi-family properties, congregate care and
assisted living facilities and similar properties;
WHEREAS, Employee has particular skill, experience and background in
investments and asset management services of the type in which the Employer
primarily engages; and
WHEREAS, Employer and Employee desire to enter into an employment
relationship, the terms of which are to be set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employer and Employee
hereby agree as follows:
1. Employment and Duties. Employer agrees to hire Employee, and Employee
agrees to be employed by Employer, as Senior Vice President of Employer on the
terms and conditions provided in this Agreement. Employee shall perform the
duties and responsibilities reasonably determined from time to time by the Chief
Executive Officer ("CEO") of the Employer consistent with the types of duties
and responsibilities typically performed by a person serving as Senior Vice
President of businesses similar to that of Employer. Employee agrees to devote
his best efforts and full time, attention and skill in performing the duties of
Senior Vice President. Provided that such activity shall not violate any
provision of this Agreement (including the non-competition provisions of Section
8 below) or materially interfere with his performance of his duties hereunder,
nothing herein shall prohibit Employee (a) from participating in any other
business activities approved in advance by the CEO or by the Chairman of the
Board of Directors (the "Board") in accordance with any terms and conditions of
such approval, such approval not to be unreasonably withheld or delayed, (b)
from engaging in charitable, civil, fraternal or trade group activities, or (c)
from investing in other entities or business ventures.
2. Compensation. As compensation for performing the services
required by this Agreement, and during the term of this Agreement, Employee
shall compensated as follows:
(a) Base Compensation. Employer shall pay to Employee an
annual salary ("Base Compensation") of One Hundred Sixty Thousand Dollars
($160,000), payable in accordance with the general policies and procedures of
the Employer for payment of salaries to executive personnel, but in any event no
less frequently than every two weeks, in substantially equal installments,
subject to withholding for applicable federal, state and local taxes. Increases
in Base Compensation, if any, shall be determined by the Compensation Committee
of the Board (the "Compensation Committee") based on the recommendation of the
CEO and on periodic reviews of Employee's performance conducted on at least an
annual basis, but shall not be less than the percentage increase per year in the
Consumer Price Index - All Urban Wage Earners and Clerical Workers. During the
term of this Agreement, Employee's annual Base Compensation shall not be less
than the initial Base Compensation plus the minimum percentage increases set
forth in the previous sentence.
(b) Incentive Compensation. In addition to Base Compensation,
Employee shall be eligible to receive additional compensation ("Incentive
Compensation"), pursuant to an Incentive Compensation Plan to be adopted by the
Employer. The Incentive Compensation Plan will provide that Employee is eligible
to receive an annual cash bonus of up to 100% of Employee's Base Compensation
then in effect. The Incentive Compensation Plan will provide that the amount of
the bonus will be based on a program determined annually in advance by the
Compensation Committee on the recommendation of the CEO. Employee acknowledges
that the formula set forth in the Incentive Compensation Plan may vary for each
employee who participates therein. Incentive Compensation for any given fiscal
year shall be determined no later than 60 days after the end of Employer's
fiscal year and paid no later than 75 days after the close of the fiscal year.
If Employee shall be employed for only a portion of a fiscal year for which
Employee is eligible for Incentive Compensation, the amount of Incentive
Compensation payable shall be the amount payable for the full year reduced by
the percentage which the number of months (including any partial months) worked
bears to twelve (the "Proportionate Share").
(c) Long-Term Incentive Compensation. Employer has established
and Employee shall be entitled to participate throughout the term of this
Agreement in Employer's 1995 Share Incentive Plan and any successor plan.
Employee's participation in such plan is subject to the terms thereof. Employee
shall also be entitled to such other incentives as the Company may establish
from time to time on the recommendation of the Compensation Committee, including
without limitation stock options, share awards, opportunities to invest and
co-invest with or in Employer and its subsidiaries, and similar programs (all of
the foregoing being herein referred to as "Long-Term Incentives").
(d) Total Compensation Goal. Employer and Employee acknowledge
that, providing the Employee achieves yearly performance goals set out by the
CEO (or Compensation Committee in the case of Mark K. Joseph) and Employer
achieves targeted performance goals and is otherwise operating in sound
financial condition, it is their mutual objective for Employee's total annual
compensation (i.e., Base Compensation plus Incentive Compensation plus Long-Term
Incentives) to include sufficient Long-Term Incentives to achieve at least Three
Hundred Fifty Thousand Dollars ($350,000) (the "Total Compensation Goal").
Achieving this Total Compensation Goal or, in the case of superior performance
of both the Employer and Employee, a higher compensation, will be in the
discretion of the Compensation Committee and shall be based on Employee's
performance and the ability of Employer to pay such amount without adversely
impacting Employer's other financial objectives.
3. Employee Benefits.
(a) During the term of this Agreement, Employee and his
eligible dependents shall have the right to participate in any retirement,
pension, insurance, health or other benefit plan or program adopted by Employer
(or in which Employer participates) to the same extent as any other officer of
the Employer, subject, in the case of a plan or program, to all of the terms and
conditions thereof, and to any limitations imposed by law. To the extent that
Employee has similar benefits under a plan or program established by any other
entity, Employee shall nonetheless have the right to the benefits provided by
Employer's plan or program; provided, however, that where by the terms of any
plan or program, or under applicable law, Employee may only participate in one
such plan or program, Employee shall have the option to limit his participation
to the plan or program sponsored by Employer, or to such other plan or program.
Employee shall have the right, to the extent permitted under any applicable law,
to participate concurrently in plans or programs sponsored by others (including
self-employment plans or programs) and in plans or programs sponsored by
Employer.
(b) Tax Benefit Adjustment. If, as a result of any acquisition
of Growth Shares by Employee, Employee shall either lose personal income tax
deductions, be required to report additional personal taxable income, or be
required to pay additional taxes or charges, which deductions, income or taxes
would not have been lost, reportable, or payable, as the case may be, had
Employee not owned any Growth Shares, Employer shall pay Employee a bonus on
April 1 of each calendar year equal to all additional taxes or charges Employee
is required to pay, attributable to the prior calendar year, which would not
have been payable had Employee not owned Growth Shares.
4. Vacation, Sickness and Leaves of Absence. Employee shall be entitled
to the normal and customary amount of paid vacation provided to officers of
Employer, but in no event less than six weeks during each fiscal year. Employee
shall provide Employer with reasonable notice of anticipated vacation dates. Any
vacation days that are not taken in a given fiscal year shall accrue and
carryover from year to year, and, upon any termination of this Agreement for any
reason whatsoever, all accrued and unused vacation time will be paid to Employee
within 10 days of such termination based on his annual rate of Base Compensation
in effect on the date of such termination; provided, however, that no more than
20 days of accrued vacation may be carried over at any time. In addition,
Employee shall be entitled to such sick leave and holidays, with pay, as
Employer provides to other officers. Unused sick leave shall be carried forward
or compensated upon termination of employment. Employee may also be granted
leaves of absence with or without pay for such valid and legitimate reasons as
the Board on recommendation from the CEO, in its sole and absolute discretion,
may determine.
5. Expenses. Employee shall be entitled to receive, within 14 days after
he has delivered to the Employer an itemized statement thereof, and after
presentation of such invoices or similar records as the Employer may reasonably
require, reimbursement for all necessary and reasonable expenses incurred by him
in connection with the performance of his duties.
6. Term. The initial term of this Agreement shall be for three years
(the "Initial Term"), commencing on the date set forth in the opening paragraph
of this Agreement (the "Effective Date"). The term of this Agreement in effect
at any given time is herein referred to as the "Term". Any termination under of
this Agreement shall be subject to Section 7 below.
7. Termination and Termination Benefits.
(a) Termination by Employer.
(i) Without Cause. Employer may
terminate this Agreement and Employee's employment at any time upon ninety (90)
days prior written notice to Employee, during which period Employer shall have
the option to require Employee to continue to perform his duties under this
Agreement. Employee shall be paid his Base Compensation and all other benefits
to which he is entitled under this Agreement up through the effective date of
termination, plus his Proportionate Share of Incentive Compensation for the year
in which the termination occurs.
(ii) With Cause. Employer may terminate
this Agreement with cause upon ten (10) days prior written notice to Employee.
In such event, Employee shall be paid his Base Compensation and all other
benefits to which he is entitled under this Agreement up through the effective
date of termination, plus his Proportionate Share of Incentive Compensation for
the year in which termination occurs. For purposes of this Section, termination
for cause shall mean (A) acts or omissions by the Employee with respect to the
Employer which constitute intentional misconduct or a knowing violation of law;
(B) receipt by the Employee of money, property or services from the Employer or
from another person dealing with Employer in violation of law or this Agreement,
(C) breach by Employee of the non-competition provisions of this Agreement, (D)
breach by the Employee of his duty of loyalty to the Employer, (E) gross
negligence by the Employee in the performance of his duties, or (F) repeated
failure by the Employee to perform services that have been reasonably requested
of him by the Board, following notice and an opportunity to cure and if such
requests are consistent with this Agreement.
(iii) Disability. If due to illness,
physical or mental disability, or other incapacity, Employee shall fail to
perform the duties required by this Agreement, Employer may terminate this
Agreement upon 30 days written notice to Employee. In such event, Employee shall
be paid his Base Compensation and receive all benefits owing to him under this
Agreement through the effective date of termination and shall receive his
Proportionate Share of Incentive Compensation for the year in which the
termination occurs. Employee shall be considered disabled under this paragraph
if he is unable to work due to disability for a total of 120 or more business
days during any 12-month period. Nothing in this paragraph shall be construed to
limit Employee's rights to the benefits of any disability insurance policy
provided by Employer and this Section shall not be construed as varying the
terms of any such policy in any manner adverse to Employee. Employer shall
provide Employee with disability coverage at least as favorable to Employee as
that provided to Employee by its prior employer.
(b) Termination by Employee. Employee may terminate this
Agreement for good reason upon 90 days prior written notice to Employer. In such
event, Employee shall be paid his Base Compensation and shall receive all
benefits through the date of termination and shall receive his Proportionate
Share of Incentive Compensation for the year of termination. Employee shall have
"good reason" to terminate his employment if (i) his Base Compensation, as in
effect at any given time, shall be reduced without his consent, (ii) Employer
shall fail to provide any of the payments or benefits provided for under this
Agreement, (iii) Employer shall materially reduce or alter Employee's duties as
Senior Vice President, (iv) Employer shall require Employee to take any act
which would be a violation of federal, state or local criminal law, and (v)
Employer shall require Employee to take any act which would not be in the best
interests of the Employer and its shareholders.
(c) Termination Compensation.
(i)Termination Without Cause or for Good Reason. In
the event of a termination of this Agreement prior to the end of the Term,
pursuant to Section 7(a)(i), 7(a)(iii) or 7(b), Employer, in addition to the
Base Compensation, benefits and Incentive Compensation payable as provided in
such sections, shall pay to Employee additional compensation ("Termination
Compensation") as follows. If the termination does not follow a Change in
Control (as defined in subparagraph (ii) below), Termination Compensation shall
be equal to the greater of (a) 18 months Base Compensation or (b) the Base
Compensation that Employee would have received during the remaining Term of this
Agreement. Termination Compensation shall be paid in four equal quarterly
payments beginning on the first day of the first calendar month following the
termination date, unless Employer elects to make such payments sooner.
(ii) Change in Control. The acquisition
of voting control of the Employer by any one or more persons or entities who are
directly, or indirectly through one or more intermediaries, under common
control, or who are related to each other within the meaning of Sections 267 and
707(b) of the Internal Revenue Code, shall be deemed a "Change in Control." In
the event Employee ceases to be employed by the Company within eighteen months
of a Change in Control, Termination Compensation shall be equal to three times
the Total Compensation Goal, payable in a lump sum on the effective date of the
Change in Control. Such Termination Compensation shall be in addition to all
other compensation and benefits to which Employee is entitled for a termination
without cause under Section 7(a)(i) above, and shall be payable even in the
event of a termination effective as of the end of the Term.
(d) Death Benefit. Notwithstanding any other provision of this
Agreement, this Agreement shall terminate on the date of Employee's death. In
such event, Employee's estate shall be paid two years' Base Compensation as
follows: to the extent of any insurance carried by Employer on Employee's life,
the death benefit shall be payable in a lump sum within five (5) business days'
of Employer's receipt of the insurance proceeds; any portion of the death
benefit not covered by insurance shall be paid in eight equal installments
payable on the first day of each calendar quarter following Employee's death.
Employer shall carry as much life insurance on Employee's life as the Board on
the recommendation of the CEO may from time to time determine.
8. Covenant Not to Compete.
(a) Non-competition. From and after the Effective Date and
continuing for the longer of (i) 12 months following the termination of this
Agreement or (ii) the remainder of the Term of this Agreement, Employee shall
not within the State of Maryland engage in or carry on, directly or indirectly,
whether as an advisor, principal, agent, partner, officer, director, employee,
shareholder, associate or consultant of or to any person, partnership,
corporation or any other business entity, the business of financing or asset
management of multi-family apartment properties without the prior written
consent of the Board; provided, however, if Employer terminates Employee without
cause under Section 7(a)(i) above, the Employee resigns for good reason under
Section 7(b) above, or a Change in Control occurs, this Section 8(a) shall not
apply.
(b) Reasonable Restrictions. Employee acknowledges that the
restrictions of subparagraph (a) above are reasonable, fair and equitable in
scope, term and duration, are necessary to protect the legitimate business
interests of the Employer, and are a material inducement to the Employer to
enter into this Agreement. Employer and Employee both agree that in the event a
court shall determine any portion of the restrictions in subparagraph (a) are
not reasonable, the court may change such restrictions, including without
limitation the geographical restrictions and the duration restrictions, to
reflect a restriction which the court will enforce as reasonable.
(c) Specific Performance. Employee acknowledges that the
obligations undertaken by him pursuant to this Agreement are unique and that if
Employee shall fail to abide by any of the restrictions set forth in
subparagraph (a), Employer will have no adequate remedy at law. Employee
therefore confirms that Employer shall have the right, in the event of a
violation of subparagraph (a), to injunctive relief to enforce the terms of this
Section 8 or, in the alternative, the right to $100,000 in liquidated damages.
This right to injunctive relief or liquidated damages shall be Employer's
exclusive remedy at law or in equity.
9. Indemnification and Liability Insurance. Employer hereby agrees to
indemnify and hold Employee harmless, to the maximum extent allowed by law, from
any and all liability for acts or omissions of Employee performed in the course
of Employee's employment (or reasonably believed by Employee to be within the
scope of his employment) provided that such acts or omissions do not constitute
(a) criminal conduct, (b) willful misconduct, or (c) a fraud upon, or breach of
Employee's duty of loyalty to, the Employer. Employer shall at all times carry
Directors' and Officers' liability insurance in commercially reasonable amounts,
but in any event not less than One Million Dollars ($1,000,000).
10. Miscellaneous.
(a) Complete Agreement. This Agreement and any existing stock
option or other Share Award plans constitute the entire agreement among the
parties with respect to the matters set forth herein and supersedes all prior
understandings and agreements between the parties as to such matters. No
amendments or modifications shall be binding unless set forth in writing and
signed by both parties.
(b) Successors and Assigns. Neither party may assign its
rights or interest under this Agreement without the prior written consent of the
other party, except that Employer's interest in this Agreement may be assigned
to a successor by operation of law or to a purchaser purchasing substantially
all of Employer's business. This Agreement shall be binding upon and shall inure
to the benefit of each of the parties and their respective permitted successors
and assigns.
(c) Severability. Each provision of this Agreement is
severable, such that if any part of this Agreement shall be deemed invalid or
unenforceable, the balance of this Agreement shall be enforced so as to give
effect as to the intent of the parties.
(d) Representations of Employer. Employer represents and
warrants to Employee that it has the requisite limited liability company power
to enter into this Agreement and perform the terms hereof and that the
execution, delivery and performance of this Agreement have been duly authorized
by all appropriate company action.
(e) Construction. This Agreement shall be governed in all
respects by the internal laws of the State of Maryland (excluding reference to
principles of conflicts of law). As used herein, the singular shall include the
plural, the plural shall include the singular, and the use of any pronoun shall
be construed to refer to the masculine, feminine or neuter, all as the context
may require.
(f) Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed given on the date sent if
delivered by hand or by facsimile, and on the next business day if sent by
overnight courier or by United States mail, postage prepaid, to each party at
the following address (or at such other address as a party may specify by notice
under this section):
If to Employer:
Municipal Mortgage & Equity, LLC
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Attention: Chief Executive Officer
If to Employee:
Gary A. Mentesana
382 Willet Court
Severna Park, Maryland 21146
(g) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Agreement as of the date and year first above written.
WITNESS: EMPLOYER:
MUNICIPAL MORTGAGE & EQUITY, LLC
By:
/s/Melva Balducci /s/ Mark K. Joseph
Melva Balducci Mark K. Joseph
Chief Executive Officer
EMPLOYEE:
/s/Angela Barone /s/ Gary A. Mentesana
Angela Barone Gary A. Mentesana
<PAGE>
