Exhibit 10.4
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
dated
February 25, 2008 (the "Effective Date"), is entered into by and
between
Wellington Denahan-Norris (the "Executive") and Annaly Capital
Management, Inc.,
a Maryland corporation (the "Company").
WHEREAS, the Company and the Executive entered into an
employment
agreement, dated January 27, 1997 (the "Employment Agreement") and
amended and
restated on December 31, 2003; and
WHEREAS, the Company desires to establish its right to the
continued
services of the Executive upon the Effective Date, in the capacity
described
below, on the terms and conditions and subject to the rights of
termination
hereinafter set forth, and the Executive is willing to accept such
employment on
such terms and conditions.
NOW, THEREFORE, in consideration of the mutual promises and
agreements
herein made and intending to be legally bound hereby, the parties
agree to the
Employment Agreement in its entirety to read as follows:
In consideration of the mutual agreements hereinafter set forth,
the
Executive and the Company have agreed and do hereby agree as
follows:
Definitions. Capitalized terms used in this Agreement shall have
the
respective meanings assigned to them below:
1.1 "Book Value" of the Company shall be equal to the aggregate
amounts
reported as Stockholders Equity on the Company's balance sheet as
of the end of
each fiscal year determined in accordance with generally accepted
accounting
principles (GAAP) but without taking into account any valuation
reserves (i.e.,
changes in the value of the Company's portfolio of investments as a
result of
mark-to-market valuation changes, referred to in the financial
statements as
"Accumulated Other Comprehensive Gain or Loss").
1.2 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.3 "Compensation Committee" shall mean the Compensation Committee
of
the Board of Directors of the Company.
1.4 "Good Reason" shall mean the occurrence of one or more of
the
following without the Executive's written consent: (i) a material
breach of this
Agreement by the Company, or (ii) a materially significant change
in the
Executive's duties, authorities or responsibilities, or (iii) the
relocation of
the Executive's principal place of employment more than 60 miles
from New York,
New York, or (iv) the failure of the Company to obtain the
assumption in writing
of its obligations to perform this Agreement by any successor to
all or
substantially all of the assets or business of the Company within
fifteen (15)
days upon a merger, consolidation, sale or similar transaction,
provided however
that none of the events specified in (i), (ii) or (iii) shall
constitute Good
Reason unless the Executive shall have notified the Company in
writing
describing the events which constitute Good Reason and the Company
shall have
failed to cure such event within a reasonable period, not to exceed
thirty (30)
days, after the Company's actual receipt of such written
notice.
Employment as Chief Investment Officer and Chief Operating
Officer of the Company. The Company hereby employs and engages the
Executive as
Chief Investment Officer and Chief Operating Officer of the
Company, and the
Executive does hereby accept and agree to such employment and
engagement. The
Executive's duties as Chief Investment Officer and Chief Operating
Officer shall
be such duties typically required of a Chief Investment Officer and
Chief
Operating Officer, and as shall from time to time be agreed upon by
the
Executive and the Board of Directors of the Company. The Executive
shall report
solely and directly to the Company's Chief Executive Officer. The
Executive's
services shall be performed in the Company's offices in New York,
New York or
such other location as the Company and Executive shall agree.
Except for periods
of Disability (as defined below), during the Term, the Executive
shall devote
substantially all of her business time, attention and energies to
the
performance of her duties under this Agreement; provided, however,
that the
Executive shall be allowed, to the extent such activities do not
substantially
interfere with the performance by the Executive of her duties
and
responsibilities hereunder, (a) to manage the Executive's personal,
financial
and legal affairs, and (b) serve on civic or charitable boards or
committees.
Furthermore, the Executive shall exercise due diligence and care in
the
performance of her duties to the Company under this Agreement.
<PAGE>
Term of Agreement.
Effective Date. The term ("Term") of this Agreement shall
commence
as of the Effective Date and shall continue through the first
anniversary of the
Effective Date. From and after such first anniversary and upon each
anniversary
thereafter, the Term of the Agreement shall automatically be
extended for
successive one-year periods unless, not later than three months
prior to such
first anniversary or any subsequent anniversary, as applicable,
either party
shall have given written notice to the other that it does not wish
to extend the
Term of the Agreement.
Compensation.
Base Salary. The Company shall pay the Executive, and the
Executive
agrees to accept from the Company, in payment for her services to
the Company, a
base salary equal to a per annum amount of $2,430,000, ("Base
Salary"), payable
in equal biweekly installments or at such other time or times as
the Executive
and the Company shall agree. The Base Salary can be increased (but
not
decreased) at any time by the Compensation Committee or the Board
of Directors
of the Company, as the case may be. The Executive's salary as
increased shall be
deemed to be the Base Salary for all purposes under this
Agreement.
Performance Bonus. With respect to each fiscal year, the
Executive
shall be eligible to receive an amount equal to the sum of: (A) the
excess, if
any, of (i) 0.250% of the Book Value of the Company for such fiscal
year over
(ii) the Executive's Base Salary as of the last day of such fiscal
year;
provided, however, that the Compensation Committee must approve
such amount,
plus (B) additional amounts as may be recommended by management and
approved by
the Compensation Committee (such sum being the "Performance
Bonus").
Annual Review. The Board of Directors shall, at least annually,
review the Executive's entire compensation package to determine if
it should be
increased (but not decreased) in order for it to continue to meet
the Company's
compensation objectives.
Fringe Benefits. The Executive shall be entitled to participate
in
any benefit programs adopted from time to time by the Company for
the benefit of
its senior executive employees, and the Executive shall be entitled
to receive
such other fringe benefits as may be granted to her from time to
time by the
Compensation Committee or the Board of Directors of the Company, as
the case may
be.
Benefit Plans. The Executive shall be entitled to participate
in
any benefit plans relating to stock options, stock purchases,
awards, pension,
thrift, profit sharing, life insurance, medical coverage,
education, or other
retirement or employee benefits available to other senior executive
employees of
the Company, subject to any restrictions (including waiting
periods) specified
in such plans.
Vacation. The Executive shall be entitled to such number of
weeks
of paid vacation per calendar year as determined by the Board of
Directors of
the Company after review of industry standards, but shall in no
event be
entitled to fewer than five weeks of paid vacation per calendar
year.
Business Expenses. The Company shall reimburse the Executive
for
any and all necessary, customary and usual expenses, properly
receipted in
accordance with Company policies, incurred by Executive on behalf
of the
Company.
Termination of Executive's Employment.
Death. If the Executive dies while employed by the Company, her
employment shall immediately terminate. The Company's obligation to
pay the
Executive's Base Salary shall cease as of the date of Executive's
death, except
that any earned, but unpaid Base Salary and Performance Bonus shall
be paid to
the Executive's beneficiaries as soon as practicable after her
death. In
addition, the Executive's beneficiaries shall receive the pro rata
portion of
the Performance Bonus for the year of the Executive's death, which
shall be
equal to the Performance Bonus (as determined at the end of the
year of the
Executive's death) multiplied by a ratio equal to (A) the number of
days the
Executive was employed in the year of her death, divided by (B)
365. The
Performance Bonus shall be paid to the Executive's beneficiaries at
the same
time and in the same manner as such Performance Bonus would have
been paid to
the Executive had the Executive not died or been terminated.
Thereafter,
Executive's beneficiaries or her estate shall receive benefits in
accordance
with the Company's retirement, insurance and other applicable
programs and plans
then in effect.
<PAGE>
Disability. If, as a result of the Executive's incapacity due
to
physical or mental illness ("Disability"), Executive shall have
been absent from
the full-time performance of her duties with the Company for six
(6) consecutive
months, and, within thirty (30) days after written notice is
provided to her by
the Company, the Executive shall not have returned to the full-time
performance
of her duties, the Executive's employment under this Agreement may
be terminated
by the Company for Disability. With respect to the period during
which begins
when the Executive is first absent from the full-time performance
of her duties
with the Company due to Disability and ends upon the later of (i)
the date she
is terminated from employment in accordance with the foregoing
sentence, or,
(ii) the date she begins receiving long-term disability payments
under the
Company's long term disability plan for senior executives ("Salary
Continuation
Period"), the Company shall continue to pay the Executive her Base
Salary at the
rate in effect at the commencement of such period of Disability. In
addition,
the Executive shall receive the pro rata portion of the Performance
Bonus for
the year of the Executive's termination due to Disability, which
shall be equal
to the Performance Bonus (as determined at the end of the year in
which the
Executive is terminated by reason of Disability) multiplied by a
ratio equal to
(A) the number of days the Executive was employed in the year of
her termination
for Disability, divided by (B) 365. The Performance Bonus shall be
paid to the
Executive at the same time and in the same manner as such
Performance Bonus
would have been paid had the Executive not been terminated by
reason of
Disability. Upon the end of the Salary Continuation Period, the
Executive's
benefits shall be determined under the Company's retirement,
insurance and other
compensation programs then in effect in accordance with the terms
of such
programs
Termination by the Company for Cause. The Company may terminate
the
Executive's employment under this Agreement for "Cause," at any
time prior to
expiration of the Term of the Agreement, only in the event of (i)
the
Executive's failure to substantially perform the duties described
in this
Agreement, (ii) acts or omissions constituting recklessness or
willful
misconduct on the part of the Executive in respect of her fiduciary
obligations
to the Company which is materially and demonstrably injurious to
the Company, or
(iii) the Executive's conviction for fraud, misappropriation or
embezzlement in
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