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Exhibit
10.7
EMPLOYMENT
AGREEMENT
This Employment Agreement, effective as
of June 30, 2006 (this “Agreement”), is by and
between American Home Mortgage Investment Corp., a Maryland
corporation having a place of business at 538 Broadhollow Road,
Melville, NY 11747 (the “Company”), and Thomas
McDonagh, currently residing at [address omitted] (the
“Executive”).
Whereas the Company wishes to
assure itself of the services of the Executive, and the Executive
desires to be employed by the Company, upon the terms and
conditions hereinafter set forth.
The Company and the Executive
hereby agree as follows:
1. Employment . The
Company agrees to employ the Executive, and the Executive hereby
accepts such employment by the Company during the term set forth in
Section 2 and on the other terms and conditions of this
Agreement.
2. Term . The term of
this Agreement shall commence on June 30, 2006, and shall
terminate on June 29, 2007 unless terminated earlier pursuant
to section 6, below.
3. Position, Duties and
Responsibilities, Rights .
(a) During the term of this
Agreement, the Executive shall serve as and hold the office and
title of Executive Vice President and Chief Investment Officer. The
Executive shall have all of the powers and duties usually incident
to the office described above, and shall at all times comply with
all policies of the Company relating to the Executive’s
employment.
(b) During the term of this
Agreement, the Executive agrees to devote substantially all the
Executive’s time, efforts and skills to the affairs of the
Company during the Company’s normal business hours, except
for vacations, illness and incapacity, but nothing in this
Agreement shall preclude the Executive from devoting reasonable
periods to (i) manage the Executive’s personal
investments, (ii) participate in professional, educational,
public interest, charitable, civic or community activities,
including activities sponsored by trade organizations,
(iii) serve as a director or member of an advisory committee
of any corporation not in competition with the Company or any of
its subsidiaries, or as an officer, trustee or director of any
charitable, educational, philanthropic, civic, social or industry
organizations, or as a speaker; provided, however, that the
performance of the Executive’s duties or responsibilities in
any of such capacities does not materially interfere with the
regular performance of the Executive’s duties and
responsibilities hereunder.
4. Place of
Performance. In connection with the Executive’s
employment by the Company, the Executive shall be based in
Melville, New York, and shall not be required to be absent from
there on travel status or otherwise for more than a reasonable time
each year as necessary or appropriate for the performance of the
Executive’s duties hereunder.
5.
Compensation
(a) During the term of this
Agreement, the Company shall pay the Executive, and the Executive
agrees to accept a base salary at the rate of not less than
$900,000.00 per year (the annual base salary as increased from time
to time during the term of this Agreement being hereinafter
referred to as the “Base Salary”). The Base Salary
shall be paid in installments no less frequently than monthly. Any
increase in Base Salary or other compensation shall not limit or
reduce any other obligation of the Company hereunder, and once
established at an increased specified rate, the Executive’s
Base Salary hereunder shall not thereafter be reduced.
(b) The Executive shall be
eligible to receive a bonus in an amount between $750,000.00 and
$900,000.00, subject to the terms of this section 5(b) (the
“Bonus”). The actual amount of the Bonus shall be
determined by the Chief Executive Officer of the Company (the
“CEO”) based upon the CEO’s evaluation of the
Executive’s overall performance. The Bonus shall be payable
no later than the last day of March, 2007.
Notwithstanding anything to
the contrary in this section 5(b) above, the Executive shall not be
entitled to receive the Bonus if the Executive is no longer an
employee of the Company on the bonus payment date; except the
Executive shall be entitled to payment of the Bonus if the
Executive is no longer an employee of the Company on the bonus
payment date and the termination of the Executive’s
employment was by the Company without Cause, or by the Executive
for Good Reason. For purposes of this Agreement, a termination of
the Executive’s employment by the Company for any of the
following reasons shall be deemed a termination for
Cause:
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(i) |
default or other breach by the Executive of the
Executive’s obligations hereunder; or |
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(ii) |
failure by the Executive to diligently or competently perform
the duties assigned to the Executive hereunder; or |
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(iii) |
misconduct, dishonesty, insubordination, or other act by the
Executive detrimental to the Company or its good will or damaging
to its relationships with any person or entity; or |
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(iv) |
conviction of or plea of guilty or no contest to a felony or
any crime involving moral turpitude, dishonesty, or
theft. |
The Executive may resign for
Good Reason (i) if the Company reduces the Executive’s
rate of compensation; (ii) if the Company materially breaches
the terms of this Agreement; (iii) if the Company makes a
material adverse change to the Executive’s responsibilities
hereunder; or (iv) if any person or entity, other than the
Board of Directors of the Company as constituted as of the date of
this Agreement either individually, collectively or through an
entity created for the following purpose, obtains control of twenty
five percent (25%) or more of the voting securities of the
Company, and the Executive’s responsibilities are diminished
as a result thereof and the Executive consequently
resigns.
(c) During the term of this
Agreement, the Executive shall be entitled to fringe benefits, in
each case at least equal to and on the same terms and conditions as
those attached to the Executive’s office on the date hereof,
as the same may be amended or modified by the Company from time to
time.
(d) The Executi
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