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Exhibit
10.9
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT dated as
of April 28, 2005, by and between TABERNA REALTY FINANCE
TRUST, with its principal place of business at 1818 Market Street,
28 th Floor, Philadelphia, PA 19103 (the
“Company”) and Mitchell Kahn, residing at the address
set forth on the signature page hereof (the
“Executive”).
WHEREAS, the Company wishes
to employ the Executive, and the Executive wishes to accept such
offer, on the terms set forth below:
Accordingly, the parties
hereto agree as follows:
1. Term . The Company
hereby employs the Executive, and the Executive hereby accepts such
employment, for an initial term commencing as of the date hereof
and continuing for a three-year period following such date, unless
sooner terminated in accordance with the provisions of
Section 4 or Section 5; with such employment to continue
for successive one-year periods in accordance with the terms of
this Agreement (subject to termination as aforesaid) unless either
party notifies the other party of non-renewal in writing prior to
three months before the expiration of the initial term and each
annual renewal, as applicable (the period during which the
Executive is employed hereunder being hereinafter referred to as
the “Term”).
2. Duties . During the
Term, the Executive shall be employed by the Company as Executive
Vice President the Company and President of Taberna Capital
Management, LLC, a subsidiary of the Company, and, as such, the
Executive shall faithfully perform for the Company the duties of
said offices and shall perform such other duties of an executive,
managerial or administrative nature as shall be specified and
designated from time to time by the board of directors of the
Company (the “Board”). The Executive shall devote
substantially all of his business time and effort to the
performance of his duties hereunder.
3. Compensation
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3.1 Salary . The
Company shall pay the Executive during the Term a salary at a
minimum rate of $250,000 per annum (the “Annual
Salary”), in accordance with the customary payroll practices
of the
Company applicable to senior executives.
The Board periodically shall review the Executive’s Annual
Salary and may provide for such increases therein as it may in its
discretion deem appropriate, provided, however that on
January 1, 2006 and January 1, 2007, Executive’s
salary shall be increased by no less than 10%. (Any such increased
salary shall constitute the “Annual Salary” as of the
time of the increase.)
3.2 Bonus . During the
Term, in addition to the Annual Salary, for each fiscal year of the
Company ending during the Term, the Executive shall have the
opportunity to receive an annual bonus in an amount and on such
terms to be determined by the Company. The Compensation Committee
of the Board shall have the discretion to grant Executive annual
bonuses in such amounts and on such terms as it shall determine in
its sole discretion. Nothing contained in the foregoing shall limit
the Executive’s eligibility to receive any other bonus under
any other bonus plan, stock option or equity–based plan, or
other policy or program of the Company.
3.3 Equity Incentive
Plan . Pursuant to the Company’s 2005 Equity Incentive
Plan (the “Plan”) the Company will, in the first year
of the Term, grant Executive (as such term is defined in the Plan)
81,773 restricted shares. In addition, Executive shall be entitled
to otherwise participate in the Plan and may be granted Options (as
such term is defined in the Plan) to purchase shares of the
Company’s common stock and shares of Restricted Stock (as
such term is defined in the Plan) under the Plan in the discretion
of the Compensation Committee.
3.4 Benefits-In
General . The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability
insurance plans, health programs, retirement plans, fringe benefit
programs and other benefits, including employer 401(k) matching
benefit, that may be available to other senior executives of the
Company generally, in each case to the extent that the Executive is
eligible under the terms of such plans or programs.
3.5 Vacation . The
Executive shall be entitled to vacation of no less than 20 business
days per year, to be credited in accordance with ordinary Company
policies.
3.6 Expenses-In
General . The Company shall pay or reimburse the Executive for
all ordinary and reasonable out-of-pocket expenses actually
incurred (and, in the case of reimbursement, paid) by
the
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Executive during the Term in the
performance of the Executive’s services under this Agreement,
in accordance with the Company’s policies regarding such
reimbursements.
4. Termination upon Death
or Disability . If the Executive dies during the Term, the Term
shall terminate as of the date of death, and the obligations of the
Company to or with respect to the Executive shall terminate in
their entirety upon such date except as otherwise provided under
this Section 4. If the Executive is unable to perform
substantially and continuously the duties assigned to him due to a
disability as defined for purposes of the Company’s long-term
disability plan then in effect, or, if no such plan is in effect,
by virtue of ill health or other disability for more than 180
consecutive or non-consecutive days out of any consecutive 12-month
period, the Company shall have the right, to the extent permitted
by law, to terminate the employment of the Executive upon notice in
writing to the Executive. Upon termination of employment due to
death or disability, (i) the Executive (or the
Executive’s estate or beneficiaries in the case of the death
of the Executive) shall be entitled to receive any Annual Salary
and other benefits earned and accrued under this Agreement prior to
the date of termination (and reimbursement under this Agreement for
expenses incurred prior to the date of termination);
(ii) without duplication of any amounts due under clause (i),
the Executive (or the Executive’s estate or beneficiaries in
the case of the death of the Executive) shall receive an amount
equal to the annual bonus that, in the absence of such termination,
would have been payable for the fiscal year in which termination
occurs, payable at such time as would have applied in the absence
of such termination, with such amount to be multiplied by a
fraction (x) the numerator of which is the number of days in
the fiscal year preceding the termination and (y) the
denominator of which is 365; (iii) all outstanding unvested
equity-based awards pursuant to the Plan held by the Executive
shall fully vest and become immediately exercisable, as applicable,
and subject to the terms of such awards; and (iv) the
Executive (or the Executive’s estate or beneficiaries in the
case of the death of the Executive) shall have no further rights to
any other compensation or benefits hereunder, or any other rights
hereunder (but, for the avoidance of doubt, shall receive such
disability and death benefits as may be provided under the
Company’s plans and arrangements in accordance with their
terms).
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5. Certain Terminations of
Employment; Certain Benefits .
5.1 Termination by the
Company for Cause; Termination by the Executive without Good
Reason .
(a) For purposes of this
Agreement, “Cause” shall mean the
Executive’s:
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(i) |
commission of, and indictment for or formal admission to a
felony, or any crime of moral turpitude, dishonesty, breach of
trust or unethical business conduct, or any crime involving the
Company; |
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(ii) |
engagement in fraud, misappropriation or
embezzlement; |
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(iii) |
continued gross insubordination after written notice thereof by
the Board; |
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(iv) |
continued failure to materially adhere to the directions of the
Board, to adhere to the Company’s written policies and
practices or to devote a substantial majority of his business time
and efforts to the Company and its subsidiaries; or |
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(v) |
material breach of any of the provisions of
Section 6. |
provided that the Company
shall not be permitted to terminate the Executive for Cause except
on written notice given to the Executive at any time not more than
30 days following the occurrence of any of the events described in
clause (ii) through (v) above (or, if later, the
Company’s knowledge thereof). No termination for Cause under
clause (i) through (v) shall be effective unless the
Board makes a determination that Cause exists after notice to the
Executive, and the Executive has been provided with an opportunity
(with counsel of his choice) to contest the determination at a
meeting of the Board.
(b) The Company may terminate
this Agreement and the Executive’s employment hereunder for
Cause, and the Executive may terminate his employment on at least
30 days’ written notice given to the Company. If the Company
terminates the Executive for Cause, or the Executive terminates his
employment and the termination by the Executive is not for Good
Reason in accordance with Section 5.2, (i) the Executive
shall receive Annual Salary and other benefits (including any bonus
for a fiscal year completed before termination and awarded but not
yet paid, or in the event of a partial fiscal year, a pro rata
bonus earned through the date of such termination, which is to be
calculated based on the bonus earned in the prior fiscal year)
earned and accrued under this Agreement prior to the termination of
employment (and reimbursement under this Agreement for expenses
incurred prior to the termination of
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employment); and
(ii) the Executive shall have no further rights to any other
compensation or benefits under this Agreement on or after the
termination of employment.
5.2 Termination by the
Company without Cause; Termination by the Executive for Good
Reason .
(a) For purposes of this
Agreement, “Good Reason” shall mean, unless otherwise
consented to by the Executive,
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(i) |
the material reduction of the Executive’s title,
authority, duties and responsibilities or the assignment to the
Executive of duties materially inconsistent with the
Executive’s position or positions with the
Company; |
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(ii) |
a reduction in Annual Salary of the Executive; |
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(iii) |
the Company’s material and willful breach of this
Agreement |
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(iv) |
Executive is required to relocate his office more than 30 miles
outside of New York City. |
Notwithstanding the
foregoing, (i) Good Reason shall not be deemed to exist unless
notice of termination on account thereof (specifying a termination
date no later than 30 days from the date of such notice) is given
no later than 30 days after the time at which the event or
condition purportedly giving rise to Good Reason first occurs or
arises and (ii) if there exists (without regard to this clause
(ii)) an event or condition that constitutes Good Reason, the
Company shall have 15 days from the date notice of such a
termination is given to cure such event or condition and, if the
Company does so, such event or condition shall not constitute Good
Reason hereunder.
(b) The Company may terminate
the Executive’s employment and the Executive may terminate
the Executive’s employment with the Company at any time for
any reason or no reason. If the Company terminates the
Executive’s employment and the termination is not covered by
Section 4 or 5.1, or the Executive terminates his employment
for Good Reason or in the event of any notice of non-renewal of
this Agreement by the Company on at least substantially similar
terms, as described in Section 1:
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(i) |
the Executive
shall receive a single-sum payment equal to accrued but unpaid
Annual Salary and other benefits (including any bonus for a
calendar year completed before termination) earned and accrued
under this Agreement prior to the termination of employment
(and
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reimbursement under this
Agreement for expenses incurred prior to the termination of
employment);
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(ii) |
the Executive shall receive a single-sum payment of an amount
equal to his Annual Salary (at the rate in effect immediately prior
to termination) plus the highest bonus earned in the one year
period prior to termination times 1.5; and |
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(iii) |
all outstanding unvested equity-based awards (including without
limitation stock options and restricted stock) held by the
Executive shall fully vest and shall become immediately
exercisable, as applicable. |
5.3 Change of Control
. Without duplication of the foregoing, upon a “Change of
Control” (as defined below) while the Executive is employed,
all outstanding unvested equity-based awards shall fully vest and
shall become immediately exercisable, as applicable. In addition,
if, after a Change of Control, the Executive terminates his
employment with the Company within the six-month anniversary of the
Change of Control, such termination shall be deemed a termination
by the Executive fo
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