Exhibit 10.3
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 STEVEN J. KESSLER (“ Kessler
”).
BACKGROUND
WHEREAS , Kessler and RAI are parties to an Employment
Agreement dated October 5, 1999 (“Existing Agreement”);
and
WHEREAS , RAI and Kessler 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 Kessler agree that the Existing Agreement is
amended and restated to read as follows:
1.
Employment . During the term of this
Agreement, Kessler shall be employed as the Executive Vice
President and Chief Financial Officer of RAI.
2.
Duties . Kessler shall report to and
accept direction from the Chairman of the Board (as defined below)
and from the Board. Kessler shall serve RAI diligently
and to the best of his abilities, but Kessler 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 Kessler in the past has participated, and it is
agreed that Kessler in the future may participate in business
endeavors separate and apart from RAI.
3.
Term . Kessler’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 Kessler
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 Kessler “Base
Compensation” to be established by the Board, which was
initially as of the date of the Existing Agreement in an amount
equal to Three Hundred Thousand Dollars ($300,000) 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 Kessler. It is understood that RAI,
through the compensation committee of the Board, will review
Kessler’s performance on an annual basis and increase or
decrease (but in no event below the Initial Level) such Base
Compensation, based upon Kessler’s performance.
b)
Incentive Compensation . During the period of
employment Kessler may receive incentive compensation in the form
of cash bonus payments, stock option grants and other forms of
incentive compensation, based upon Kessler’s
performance.
c)
Reimbursement of Expenses . RAI shall reimburse
Kessler for all reasonable expenses incurred by Kessler in the
performance of his duties, including (without limitation) expenses
incurred during business-related travel.
5.
Benefits .
Kessler shall be entitled to receive the
following benefits from RAI independent of any other benefits which
Kessler may receive from RAI or otherwise:
a)
Participation in Benefit Plans . Kessler will
participate in all employee benefit plans in effect during the term
of Kessler’s employment hereunder.
b)
Temporary Disability . During any period that
Kessler fails to perform his duties hereunder as a result of
incapacity due to physical or mental illness Kessler 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 .
Kessler’s employment hereunder shall
terminate as follows:
a)
Death . Kessler’s employment shall
terminate automatically upon the death of Kessler.
b)
Disability . RAI may terminate this Agreement if
Kessler 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 Kessler, by reason of such physical or mental disability, is
rendered unable to perform his duties and services hereunder (a
“ Disability ”);
c)
Termination by Kessler for Cause . Kessler 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, Kessler’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 Kessler, a substantial change in the
services or duties required of Kessler hereunder or the imposition
of any services or duties substantially inconsistent with, or in
diminution of Kessler’s current position, services
or duties, or status with RAI; (ii) failure to continue
Kessler’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 Kessler Without Cause . Kessler
may terminate this Agreement without cause upon one hundred eighty
(180) days prior written notice to RAI.
e)
Change of Control . Kessler may, in his
discretion, terminate his employment upon a 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 Kessler.
7.
Effect of Termination .
a)
Death . Upon the termination of Kessler’s
employment pursuant to paragraph 6(a) hereof due to Kessler’s
death, a death benefit shall be paid to Kessler’s estate
equal to the total amount payable to Kessler under this Agreement
until expiration of the term in effect as of Kessler’s Date
of Termination, as provided under Section 3, assuming that
Kessler’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
Kessler’s employment pursuant to paragraph 6(b) hereof due to
Kessler’s Disability, Kessler shall be entitled to receive
compensation equal to the product of (i) the Average Compensation,
multiplied by (ii) seventy-five percent (75%). 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 Kessler by an insurance company.
c)
For Cause; Change of Control . Upon the
termination of this Agreement either (i) by Kessler for cause
pursuant to paragraph 6(c) hereof, (ii) by Kessler pursuant to
paragraph 6(e) after a Change of Control or (iii) by RAI pursuant
to section 6(f) hereof, then RAI shall provide to Kessler the
benefits described (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 Kessler for periods subsequent to the Date
of Termination, RAI shall pay to Kessler an amount equal to the sum
of the total amount payable to Kessler under this Agreement until
expiration of the term in effect as of Kessler’s Date of
Termination, as provided under Section 3, assuming that
Kessler’s total compensation for each year would be equal to
the Average Compensation.
(2)
Benefits .
(A) During
the thirty-six (36)-month period following Kessler’s Date of
Termination (the “Separation Period”), Kessler may
elect continued health coverage under RAI’s health plan in
which Kessler participated at the Date of Termination, as in effect
from time to time, provided that Kessler 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 Kessler 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 Kessler’s Date
of Termination. The cash payments under this subsection
(B) shall be increased by a tax gross up payment equal to
Kessler’s income and FICA tax imposed on the payment under
this subsection (B).
(C) RAI
shall pay Kessler 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 Kessler 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 Kessler’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 Kessler’s Date of Termination. The cash payments
under this subsection (C) shall be increased by a tax gross up
payment equal to Kessler’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
Kessler’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 Kessler’s Date of Termination, subject
to Kessler’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 Kessler’s compliance with Section 12 below.
Notwithstanding anything to the contrary in this Agreement, if RAI
is paying Severance Benefits to Kessler pursuant to this Section
7(d), then COBRA Premiums paid pursuant to Section 7(c)(2)(B) shall
be paid by RAI to Kessler only for the period during which Kessler
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
Kessler’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 Kessler’s termination of employment
as described in Sections 7(a), 7(b), and 7(c) shall be payable in a
single lump sump payment instead of installments. The
lump sum payment shall be made within thirty (30) days after
Kessler’s Date of Termination, subject to Kessler’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 Kessler 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.
(4)
Vesting of Options . Upon any termination
o
