EMPLOYMENT
AGREEMENT
Amended and Restated as of
December 29, 2008
This Amended and Restated Employment Agreement
(“ Agreement ”) is dated as of December 29, 2008
by and between RESOURCE AMERICA, INC., a Delaware corporation
having its principal place of business at 1 Crescent Drive, Suite
203, Navy Yard, Philadelphia, Pennsylvania 19112 (“
RAI ”) and JONATHAN Z. COHEN (“ Cohen
”).
BACKGROUND
WHEREAS , Cohen and RAI are parties to an Employment
Agreement dated October 5, 1999 (“ Existing Agreement
”); and
WHEREAS , RAI and Cohen desire to amend the Existing
Agreement to comply with section 409A of the Code (as defined
below) and to make other appropriate changes to comply with
applicable law.
TERMS
NOW, THEREFORE, in consideration of the mutual
promises set forth herein, and intending to be legally bound
hereby, RAI and Cohen agree that the Existing Agreement is amended
and restated to read as follows:
1.
Employment . During the term of this
Agreement, Cohen shall be employed as the President and Chief
Executive Officer of RAI.
2.
Duties . Cohen shall report to and accept
direction from the Chairman of the Board (as defined below) and
from the Board. Cohen shall serve RAI diligently and to
the best of his abilities, but Cohen shall be required to devote
only so much of his time and attention to the business of RAI as
may be required to fulfill his duties. It is recognized
that Cohen in the past has participated, and it is agreed that
Cohen in the future may participate in business endeavors separate
and apart from RAI.
3.
Term . Cohen’s employment hereunder
shall continue in full force and effect for a period of three (3)
years, unless sooner terminated in accordance with the provisions
hereof. Such term shall automatically extend so that on
any day that this Agreement is in effect, it shall have a then
current term of three (3) years. Such automatic
extensions shall cease upon RAI’s written notice to Cohen of
its election to terminate this Agreement at the end of the three
(3) year period then in effect.
(a)
Base Compensation . During the period of
employment, RAI shall pay to Cohen "Base Compensation" to be
established by the Board, which was initially as of the date of the
Existing Agreement in an amount equal to Two Hundred Thousand
Dollars ($200,000) per annum base compensation (the “
Initial Level ”). The Base Compensation
will be payable in accordance with the general payroll practices by
which RAI pays its executive officers, and the historical practice
of RAI’s compensation of Cohen. It is understood
that RAI, through the compensation committee of the Board, will
review Cohen’s performance on an annual basis and increase or
decrease (but in no event below the Initial Level) such Base
Compensation, based upon Cohen’s performance.
(b)
Incentive Compensation . During the period of
employment Cohen may receive incentive compensation in the form of
cash bonus payments, stock option grants and other forms of
incentive compensation, based upon Cohen’s
performance.
(c)
Reimbursement of Expenses . RAI shall reimburse
Cohen for all reasonable expenses incurred by Cohen in the
performance of his duties, including (without limitation) expenses
incurred during business-related travel.
5.
Benefits . Cohen shall be entitled to
receive the following benefits from RAI independent of any other
benefits which Cohen may receive from RAI or otherwise:
(a)
Participation in Benefit Plans . Cohen will
participate in all employee benefit plans in effect during the term
of Cohen’s employment hereunder.
(b)
Temporary Disability . During any period that
Cohen fails to perform his duties hereunder as a result of
incapacity due to physical or mental illness, Cohen shall continue
to receive his full compensation at the rate then in effect for
such period until his employment is terminated pursuant to
paragraph 6(b) hereof.
6.
Termination . Cohen’s employment
hereunder shall terminate as follows:
(a)
Death . Cohen’s employment shall terminate
automatically upon the death of Cohen.
(b)
Disability . RAI may terminate this Agreement if
Cohen becomes disabled by reason of any physical or mental
disability whatsoever for more than two hundred forty (240) days in
the aggregate during any calendar year and the Board determines
that Cohen, by reason of such physical or mental disability, is
rendered unable to perform his duties and services hereunder (a
“ Disability ”).
(c)
Termination by Cohen for Cause . Cohen may
terminate his employment for “cause” upon thirty (30)
days’ prior written notice to RAI, which notice shall set
forth the grounds for such termination. The notice must
be provided within sixty (60) days after the event giving rise to
the termination for “cause” occurs. RAI
shall have a period of thirty (30) days during which it may cure
any condition reasonably susceptible of cure. If RAI
does not correct the grounds for termination during the thirty (30)
day period following the notice of termination, Cohen’s
termination of employment for “cause” must become
effective within thirty (30) days after the end of the cure period,
in order for such termination to be treated as a termination for
“cause” under this Agreement. For the
purposes of this paragraph 6(c), “cause” shall be
deemed to exist if any of the following shall occur: (i) without
the written consent of Cohen, a substantial change in the services
or duties required of Cohen hereunder or the imposition
of any services or duties substantially inconsistent with, or in
diminution of Cohen’s current position, services
or duties, or status with RAI; (ii) failure to continue
Cohen’s coverage under any RAI benefit plan as required under
paragraph 5(a) except pursuant to a change to a benefit plan that
applies to senior executives of RAI generally or is required by law
or regulation; or (iii) any material breach by RAI of any provision
of this Agreement;
(d)
Termination by Cohen Without Cause . Cohen may
terminate this Agreement without cause upon one hundred eighty
(180) days prior written notice to RAI.
(e)
Change of Control . Cohen may, in his discretion,
terminate his employment upon a Change of Control or Potential
Change of Control by sending a Notice of Termination.
(f)
Termination by RAI . Subject to the requirements of Section
7, RAI may terminate this Agreement for any reason upon sixty (60)
days prior written notice to Cohen.
7.
Effect of Termination .
(a)
Death . Upon the termination of Cohen’s
employment pursuant to paragraph 6(a) hereof due to Cohen’s
death, a death benefit shall be paid to Cohen’s estate equal
to the total amount payable to Cohen under this Agreement until
expiration of the term in effect as of Cohen’s Date of
Termination, as provided under Section 3, assuming that
Cohen’s total compensation for each year would be equal to
the Average Compensation. The amount to be paid under
this Section shall be paid as described in Section 7(d).
(b)
Disability . Upon the termination of
Cohen’s employment pursuant to paragraph 6(b) hereof due to
Cohen’s Disability, Cohen shall be entitled to receive annual
compensation equal to the product of (i) the Average Compensation,
multiplied by (ii) seventy-five percent (75%). The
disability benefit described above shall be paid to Cohen,
beginning within thirty (30) days after the Date of Termination
pursuant to Section 6(b). Cohen’s disability
benefit shall cease if he resumes his employment with RAI on the
terms provided in this Agreement. The amount to be paid
under this Section shall be paid as described in Section 7(d) and
shall not be reduced by any payments made directly to Cohen by an
insurance company.
(c)
For Cause; Change of Control . Upon the
termination of this Agreement either (i) by Cohen for cause
pursuant to paragraph 6(c) hereof, (ii) by Cohen pursuant to
paragraph 6(e) after a Change of Control or Potential Change of
Control or (iii) by RAI pursuant to section 6(f) hereof, then RAI
shall provide to Cohen the benefits described below (the “
Severance Benefits ”). All Severance
Benefits shall be paid as described in Section 7(d).
(1)
Severance Payment . In lieu of any further
compensation payments to Cohen for periods subsequent to the Date
of Termination, RAI shall pay to Cohen an amount equal to the sum
of the total amount payable to Cohen under this Agreement until
expiration of the term in effect as of Cohen’s Date of
Termination, as provided under Section 3, assuming that
Cohen’s total compensation for each year would be equal to
the Average Compensation.
(A) During
the thirty-six (36)-month period following Cohen’s Date of
Termination (the “Separation Period”), Cohen may elect
continued health coverage under RAI’s health plan in which
Cohen participated at the Date of Termination, as in effect from
time to time, provided that Cohen shall be responsible for paying
the full monthly cost of such coverage, which shall be equal to the
premium determined for purposes of continued coverage under section
4980B(f)(4) of the Code (“COBRA Premium”) in effect
from time to time.
(B) RAI
shall pay Cohen an amount equal to the COBRA Premium cost of
continued health coverage under RAI’s health plan for the
Separation Period, less the premium charge that is paid by RAI
employees for such coverage, as in effect on Cohen’s Date of
Termination. The cash payments under this subsection (B)
shall be increased by a tax gross up payment equal to Cohen’s
income and FICA tax imposed on the payment under this subsection
(B).
(C) RAI
shall pay Cohen an amount equal to the cost that RAI would incur
for life, disability and accident insurance coverage (as calculated
below) for the Separation Period as if Cohen had continued in
employment and participated in RAI’s plans, less the premium
charge that is paid by active RAI employees for such coverage as in
effect at Cohen’s Date of Termination. The monthly
cost of disability, life and accident insurance coverage shall be
calculated based on RAI’s monthly cost of such coverage on
Cohen’s Date of Termination. The cash payments under this
subsection (C) shall be increased by a tax gross up payment equal
to Cohen’s income and FICA tax imposed on the payment under
this subsection (C).
(1) Except
as provided in subsection (2) below, all amounts paid upon
Cohen’s termination of employment as described in Sections
7(a), 7(b), and 7(c) shall be payable in regular payroll
installments over the applicable period described in such
Sections. Such installments shall commence within thirty
(30) days after the date of Cohen’s Date of Termination,
subject to Cohen’s delivery to RAI of an effective release of
all claims against RAI and its affiliates in the standard form
provided by RAI for employee terminations (“ Release
”) and Cohen’s compliance with Section 12 below.
Notwithstanding anything to the contrary in this Agreement, if RAI
is paying Severance Benefits to Cohen pursuant to this Section
7(d), then COBRA Premiums paid pursuant to Section 7(c)(2)(B) shall
be paid by RAI to Cohen only for the period during which Cohen
elects to participate in continued health coverage under
RAI’s health plan. Notwithstanding anything in
this subsection (d) to the contrary, no Release shall be required
with respect to death benefits under Section 7(a).
(2) If
Cohen’s employment is terminated upon or within two (2) years
after a Change of Control that is a 409A Change of Control, all
amounts paid as upon Cohen’s termination of employment as
described in Sections 7(a), 7(b), and 7(c) shall be payable in a
single lump sum payment instead of installments. The
lump sum payment shall be made within thirty (30) days after
Cohen’s Date of Termination, subject to Cohen’s
delivery to RAI of an effective Release and compliance with Section
12 below. For purposes of determining the amounts to be
paid pursuant to Section 7(c)(2)(B) and Section 7(c)(2)(C), the
single lump sum payment shall equal the total amount that would
otherwise have been paid to Cohen under Section 7(c)(2)(B) and
Section 7(c)(2)(C) for the duration of the Separation Period as
determined as of the Date of Termination.
(3) Notwithstanding
the foregoing, all payments that are subject to the section 409A
six-month delay shall be postponed as described in Section 12
below.
(e)
Vesting of Options . Upon any termination of this
Agreement, the vesting of all options to purchase securities of RAI
granted to Cohen during his employment with RAI shall be
accelerated to the later of the effective date of termination of
this Agreement, or six (6) months
