AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement")
is dated as of the 21st day of December, 1995, by and between HOMEPLEX MORTGAGE
INVESTMENTS CORPORATION, a Maryland corporation ("Homeplex"), and ALAN D.
HAMBERLIN ("Hamberlin").
WHEREAS, Hamberlin is an employee of Homeplex and has served
as Chief Executive Officer of Homeplex since its organization;
WHEREAS, Hamberlin is a party to an employment agreement dated
as of November 1, 1992 (the "1992 Employment Agreement") pursuant to which
Hamberlin has served as the Chief Executive Officer of Homeplex pursuant to the
terms thereof;
WHEREAS, the 1992 Employment Agreement provides for an
employment term ending on August 31, 1996;
WHEREAS, Homeplex desires to continue to have the benefits of
Hamberlin's knowledge and experience and considers his continued employment a
vital element in protecting and enhancing the best interests of Homeplex and its
stockholders;
WHEREAS, Hamberlin has agreed to continue to serve as Chief
Executive Officer of Homeplex and to fulfill, with the other employees of
Homeplex, the functions performed by him under the 1992 Employment Agreement on
the terms and conditions contracted hereinafter; and
WHEREAS, Homeplex desires to continue to employ Hamberlin and
Hamberlin desires to continue to be employed by Homeplex upon the terms and
conditions contained hereinafter, which Homeplex and Hamberlin agree will
supersede, amend and restate the terms and conditions of the 1992 Employment
Agreement effective as of the date hereof;
NOW, THEREFORE, in consideration of the promises and of the
mutual covenants herein contained, the parties hereto have agreed and do agree
as follows:
1. Employment. Homeplex hereby employs Hamberlin and Hamberlin
hereby accepts employment by Homeplex upon the terms and conditions set forth
herein.
2. Services Required.
(a) Chief Executive Officer. Hamberlin shall be
employed as the Chief Executive Officer of Homeplex and shall perform such
duties and services as are customary for such a position. Such services shall
include the services currently being rendered by Hamberlin.
(b) Expense Reimbursement. Hamberlin shall devote
that portion of his time required to perform his duties hereunder in a competent
manner. Because some of Hamberlin's duties under this paragraph will, from time
to time, be performed by him while he is physically located in the offices of
Courtland Homes, Homeplex hereby agrees to pay Courtland $15,000 annually as
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reimbursement for expenses incurred by Courtland in providing support to
Hamberlin during the time he performs work for Homeplex. Such payment shall be
made in quarterly increments.
3. Term of Employment. The term of this Agreement shall be for
a period of three years commencing as of the date hereof; provided, however, the
rights of Hamberlin and the obligations of Homeplex under the Addendum shall
continue during the "PSR Exercise Period" as defined in Section 6 of the
Addendum.
4. Change in Control. The term "Change in Control" of Homeplex
shall mean a change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date of this Agreement or,
if Item 6(e) is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 which
serve similar purposes; provided that, without limitation, such a Change in
Control shall be deemed to have occurred if and when (a) any person (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) directly or indirectly of equity securities of
Homeplex representing 9.8 percent or more of the combined voting power of
Homeplex's then outstanding equity securities except that this provision shall
not apply to an acquisition which has been approved by at least 75 percent of
the members of the Board of Directors who are not affiliates or associates of
such person and by at least 80 percent of the issued and outstanding shares of
Homeplex common stock beneficially owned by non-affiliates of such person; (b)
during the period of this Agreement, individuals who, at the beginning of such
period, constituted the Board of Directors of Homeplex (the "Original
Directors"), cease for any reason to constitute at least a majority thereof
unless the election or nomination for election of each new director was approved
(an "Approved Director") by the unanimous vote of a Board of Directors
constituted entirely of Existing Directors and/or previously Approved Directors;
(c) a tender offer or exchange offer is made whereby the effect of such offer is
to take over and control Homeplex; and such offer is consummated for the equity
securities of Homeplex representing 20 percent or more of the combined voting
power of Homeplex's then outstanding voting securities; (d) Homeplex is merged,
consolidated or enters into a reorganization transaction with another person and
as the result of such merger, consolidation or reorganization less than 75
percent of the outstanding equity securities of the surviving or resulting
person shall then be owned in the aggregate by the former stockholders of
Homeplex; or (e) Homeplex transfers substantially all of its assets to another
person or entity which is not a wholly- owned subsidiary of Homeplex; provided,
however, that notwithstanding the foregoing no Change of Control shall be deemed
to have occurred if such a Change of Control is a "Consented Change of Control."
A "Consented Change of Control" is any transaction described in Sections 4(a),
(c) or (d) if such transaction has been unanimously approved by a Board of
Directors constituted entirely of Existing Directors and/or previously Approved
Directors.
5. Compensation.
(a) Salary. Homeplex will pay Hamberlin an annual
base salary of One Dollar ($1.00) for the term of this Agreement. This annual
base salary shall be payable in annual installments.
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(b) Bonuses. Hamberlin shall not be entitled to any
bonus except as granted by the Board of Directors in its absolute sole
discretion.
(c) Options/PSRs. As of the date of this Agreement,
Homeplex has granted an option to Hamberlin to purchase common stock of Homeplex
pursuant to a Stock Option Agreement executed by and between Homeplex and
Hamberlin as of the date hereof (the "Stock Option Agreement"). Under the terms
of the Stock Option Agreement, Hamberlin may not exercise any options thereunder
until that Stock Option Agreement has been approved by the shareholders of
Homeplex as required in the Stock Option Agreement ("Shareholder Approval"). If
Shareholder Approval has not been obtained (i) at a Homeplex shareholders'
meeting in which the Stock Option Agreement is the subject of a shareholder
vote; (ii) on or before the day prior to the third anniversary date of this
Agreement; (iii) on or before the day prior to a Change in Control; or (iv) on
or before the day prior to any Date of Termination (not including a Date of
Termination occurring as a result of the termination of Hamberlin for Cause),
then on the earliest of the foregoing dates, Hamberlin shall have the phantom
stock rights ("PSRs") described in this Agreement and the Addendum attached
hereto which by this reference is incorporated herein.
(d) Fringe Benefits. Hamberlin shall be entitled to
participate in any group insurance, pension, retirement, vacation, expense
reimbursement or other plans, programs or benefits approved by the Board of
Directors and made available from time to time to employees of Homeplex
generally during the term of Hamberlin's employment hereunder. The foregoing
shall not obligate Homeplex to adopt or maintain any particular plan, program or
benefit.
6. Termination of Employment. Hamberlin's employment shall
terminate during the term of this Agreement under any of the following
circumstances:
(a) Death. Hamberlin's employment shall terminate
upon Hamberlin's death.
(b) Disability. Hamberlin's employment shall
terminate in the event Hamberlin becomes physically or mentally disabled so as
to be unable, for a period of more than 120 consecutive calendar days or for
more than 180 calendar days in the aggregate during any twelve-month period, to
perform his duties hereunder in a timely and competent manner, and Homeplex
thereafter gives written notice of termination to Hamberlin. Hamberlin's failure
to present himself for work for either of the periods described above shall be
presumptive evidence of his disability. The first day of any 120 or 180 day
period described above shall be referred to as the "Disablement Commencement
Date."
(c) Termination For Cause. Homeplex may terminate
Hamberlin's employment hereunder for Cause. For the purposes of this Agreement,
Homeplex shall have "Cause" to terminate Hamberlin's employment hereunder only
if termination shall have been the result of an act or acts of dishonesty by
Hamberlin constituting a felony and resulting or intended to result directly or
indirectly in substantial gain or personal enrichment at the expense of
Homeplex. Notwithstanding the foregoing, Hamberlin shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Hamberlin a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Homeplex Board of
Directors (excluding Hamberlin if he is then a director) at a meeting of the
Board called and held for the purpose (after
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reasonable notice to Hamberlin and an opportunity for Hamberlin, together with
his counsel, to be heard before the Board), finding that in the good faith
opinion of the Board Hamberlin was guilty of conduct meeting the criteria set
forth above and specifying the particulars thereof.
(d) Notice of Termination. Any termination by
Homeplex pursuant to Section 6(b) or 6(c) above shall be communicated by written
Notice of Termination. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Hamberlin's
employment under the provision so indicated. For purposes of this Agreement, no
such purported termination shall be effective without such Notice of
Termination.
(e) Termination by Mutual Agreement. Within 90 days
of a Consented Change of Control, Homeplex may send a written "Notice of
Requested Termination" to Hamberlin asking him to terminate his employment.
Hamberlin shall have 30 days to respond in writing to the Notice of Requested
Termination. A termination of Hamberlin's employment pursuant to this Section
6(e) shall be referred to herein as a "Consented Termination."
(f) Termination by Hamberlin. Hamberlin may at any
time during the term of this Agreement terminate his employment hereunder for
any reason or no reason by giving Homeplex notice in writing not less than 120
days in advance of such termination, provided that in the event of a Change in
Control such notice must be not less than 30 days in advance of termination. The
Date of Termination shall be the date specified in the written Notice of
Termination unless otherwise agreed and Hamberlin shall have no further
obligations to Homeplex after the effective date of termination. Notwithstanding
the foregoing, in the event any "person" (as defined in Section 4 above) begins
a tender or exchange offer, circulates a proxy to shareholders or takes other
steps to effect a Change of Control, Hamberlin agrees that he will not
voluntarily leave the employ of Homeplex, and will render services to Homeplex
commensurate with his position, until such "person" has abandoned or terminated
efforts to effect a Change of Control or until a Change of Control has occurred.
(g) Date of Termination. "Date of Termination" shall
mean (i) if the Agreement is terminated as a result of Hamberlin's death, the
date of Hamberlin's death, (ii) if the Agreement is terminated by Hamberlin, the
date on which he delivers a Notice of Termination to Homeplex, (iii) if this
Agreement is terminated by Homeplex for Disability, 30 days after a Notice of
Termination is given (provided that Hamberlin shall not have returned to the
performance of Hamberlin's duties on a full-time basis during such 30-day
period), (iv) if the Agreement is terminated as a result of a Consented
Termination, the date as agreed to by Hamberlin and Homeplex, or (v) if
Hamberlin's employment is terminated by Homeplex for any other reason, the date
on which a Notice of Termination is given; provided that if within 30 days after
any Notice of Termination is given by Homeplex, Hamberlin notifies Homeplex that
a dispute exists concerning the termination, the Date of Termination shall be
the earlier of the third anniversary date of this Agreement or the date on which
the dispute is finally determined, either by mutual written agreement of the
parties, or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal having
been perfected).
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7. Compensation in the Event of Termination Prior to a Change
in Control. If Hamberlin's employment is terminated prior to a Change in
Control, the following provisions shall apply.
(a) Death or Disability. If Hamberlin's employment is
terminated under Section 6(a) or 6(b) hereof, Homeplex will pay Hamberlin or his
estate (i) his salary and fringe benefits to the Date of Termination and (ii) if
Shareholder Approval of the Stock Option Agreement has not occurred as of the
Date of Termination, an amount equal to the Excess Value of each vested PSR. For
purposes of the foregoing, the Excess Value of each vested PSR shall be
calculated (i) as of the Date of Termination if Hamberlin is deceased or (ii) as
of the Disablement Commencement Date if Hamberlin is disabled. The foregoing
amounts shall be paid to Hamberlin in a lump sum within 10 days after the Date
of Termination.
(b) For Cause. If Hamberlin's employment is
terminated under Section 6(c) hereof, Homeplex will immediately pay Hamberlin
his salary and fringe benefits to the Date of Termination and Hamberlin shall
not be entitled to any other salary or fringe benefits or PSR Exercise or DER
Payments (whether vested or unvested).
(c) Other. If Hamberlin's employment is terminated by
Homeplex for any reason other than death, disability, Cause, or a Consented
Termination, Homeplex will pay Hamberlin (i) his salary and fringe benefits for
the balance of the term of this Agreement and (ii) if Shareholder Approval of
the Stock Option Agreement has not occurred as of the Date of Termination, all
PSR DER Payments occurring during the PSR Exercise Period, and such PSR Exercise
Payments as elected by Hamberlin during the PSR Exercise Period. All salary and
fringe benefits shall be paid to Hamberlin in a lump sum within 10 days after
the Date of Termination. All PSR DER Payments shall be paid at such time as
required by the Addendum, and all PSR Exercise Payments shall be paid at such
time as such PSRs are exercised by Hamberlin during the PSR Exercise Period.
(d) By Hamberlin. If Hamberlin's employment is
terminated under Section 6(f) hereof, Homeplex will pay Hamberlin only his
salary and fringe benefits which become payable on or prior to the Date of
Termination. All such salary and fringe benefits shall be paid to Hamberlin in a
lump sum within 10 days after the Date of Termination. In addition, if
Shareholder Approval of the Stock Option Agreement has not occurred as of the
Date of Termination, with respect to those PSRs that vested prior to the Date of
Termination, Hamberlin shall thereafter be entitled during the PSR Exercise
Period to all PSR DER Payments and such PSR Exercise Payments as elected by
Hamberlin.
(e) No Mitigation. Hamberlin shall not be required to
mitigate the amount of any payment provided for in this paragraph by seeking
other employment or otherwise, nor shall the amount of any payment provided for
in this paragraph be reduced by any compensation earned by Hamberlin as the
result of employment by another employer.
8. Compensation in the Event of a Consented Termination. If
Hamberlin's employment is terminated pursuant to a Consented Termination,
Homeplex will pay Hamberlin only the salary and fringe benefits that become
payable on or prior to the Date of Termination. All such salary and fringe
benefits shall be paid to Hamberlin in a lump sum within 10 days after the Date
of Termination. In addition, if Shareholder Approval of the Stock Option
Agreement has not occurred as of the Date of Termination, Hamberlin shall
thereafter be entitled during the PSR Exercise Period to all PSR
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DER payments and all such PSR Exercise payments as elected by Hamberlin with
respect to all PSRs as those PSRs vest as if Hamberlin were still employed.
9. Effect of Change in Control. If a Change in Control occurs
on or before the third anniversary date of this Agreement and if there
previously shall have been a Consented Termination of Hamberlin, and if
shareholder approval of the Stock Option Agreement has not occurred as of the
day prior to the Change in Control, all PSRs shall immediately vest, all PSR DER
payments shall be paid at such times as required by the Addendum, and all PSR
Exercise Payments shall be paid at such time that such PSRs are exercised by
Hamberlin during the PSR Exercise Date. If a Change in Control occurs during the
term of this Agreement and Hamberlin's employment shall not have been terminated
previously, notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall apply:
(a) Benefit Plans. Homeplex shall maintain in full
force and effect, for Hamberlin's continued benefit until the earlier of the
third anniversary of the date of this Agreement, or the date Hamberlin becomes
entitled to participate in similar plans, programs or benefits provided by a
subsequent employer, all life, accident, medical and dental insurance plans,
programs or benefits, adopted from time to time by the Board of Directors, in
which he was entitled to participate immediately prior to the Change in Control
provided that his continued participation is possible under the general terms
and provisions of such plans, programs and benefits. The foregoing shall not
obligate Homeplex to adopt or maintain any particular plan, program or benefit.
In the event that his participation in any such plan, program or benefit is
barred, Homeplex shall arrange to provide him with benefits substantially
similar to those to which he would have been entitled to receive under such
plans and programs. At the end of the period of coverage, Hamberlin shall have
the option to have assigned to him at no cost and with no apportionment of
prepaid premiums, any assignable insurance policy owned by Homeplex and relating
specifically to him.
(b) Acceleration of PSRs. As provided in the
Addendum, if Shareholder Approval of the Stock Option Agreement has not occurred
as of the day prior to the Change in Control, all PSRs shall immediately vest,
all PSR DER Payments shall be paid at such times as required by the Addendum,
and all PSR Exercise Payments shall be paid at such time as such PSRs are
exercised by Hamberlin during the PSR Exercise Period.
(c) Change in Control Bonus. Within 10 days after a
Change in Control, Homeplex will pay $500,000 to Hamberlin as well as all unpaid
fringe benefits. If Hamberlin remains employed by Homeplex following a Change in
Control he shall be entitled to receive such other compensation, if any, as
Homeplex and Hamberlin shall then agree.
(d) No Mitigation. Hamberlin shall not be required to
mitigate the amount of any payment provided for in this paragraph by seeking
other employment or otherwise, nor shall the amount of any payment provided for
in this paragraph be reduced by any compensation earned by Hamberlin as the
result of employment by another employer.
10. Liquidation of Homeplex. In the event that no Change in
Control has occurred and the Board of Directors has elected to declare a
Liquidating Dividend, then notwithstanding the Addendum hereof, no PSR DER
Payment shall be made to Hamberlin. Instead, regardless of whether or not
Shareholder Approval of the Stock Option Agreement has occurred, Hamberlin shall
receive on
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or before the date of the Liquidating Dividend a bonus in an amount equal to
$20,833 multiplied by each full or partial month that Hamberlin has been
employed by Homeplex since the date of this Agreement. For purposes of this
Agreement, a "Liquidating Dividend" shall mean a dividend through which all or
substantially all of the assets of Homeplex are distributed to its shareholders.
11. Surrender of Books and Records. Hamberlin acknowledges
that all files, lists, books, records, literature, products and any other
materials owned by Homeplex or used by it in connection with the conduct of its
business shall at all times remain the property of Homeplex and that upon
termination of employment hereunder, irrespective of the time, manner or cause
of said termination, Hamberlin will surrender to Homeplex all such files, lists,
books, records, literature, products and other materials.
12. Notices. All notices, requests, demands and other
communications required under this Agreement shall be in writing and shall be
deemed duly given and received (i) if personally delivered, on the date of
delivery, (ii) if mailed, three days after deposit in the United States mail,
registered or certified, return receipt requested, postage prepaid and addressed
as provided below, or (iii) if by a courier delivery service providing overnight
or "next-day" delivery, on the next business day after deposit with such service
addressed as follows:
If to Homeplex: Homeplex Mortgage Investments
Corporation
5333 North 7th Street, Suite 219
Phoenix, Arizona 85014
If to Hamberlin: Alan D. Hamberlin
5333 North 7th Street, Suite 310
Phoenix, Arizona 85014
Any party may change its above-designated address by giving the other party
written notice of such change in the manner set forth herein.
13. Waiver. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver, and no waiver shall be binding unless executed in writing by the party
making the waiver.
14. Integration, Modification and Amendment. This Agreement
(which includes the Addendum) and the Stock Option Agreement embody the full
understanding of the parties with respect to the subject matter hereof,
superseding any and all prior agreements, including the 1992 Employment
Agreement, and no amendment or modification thereof shall be effective unless
the same shall be in writing and signed by both of said parties.
15. Governing Law. Except as the corporate law of the State of
Maryland expressly applies hereto, this Agreement shall be construed in
accordance with, and governed by, the laws of the State of Arizona, without
regard to application of conflicts of law principles.
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16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which,
taken together, shall constitute one and the same instrument.
17. Severability. Each provision of this Agreement is
severable from every other provision and is enforceable to the full extent that
it is valid without regard to the invalidity of any portion hereof or of any
other provision and without regard to any claim or cause of action Hamberlin may
have against Homeplex under this Agreement or otherwise.
18. Successors And Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto;
provided that because the obligations of Hamberlin hereunder involve the
performance of personal services, such obligations shall not be delegated by
Hamberlin. For purposes of this Agreement successors and assigns shall include,
but not be limited to, any individual, corporation, trust, partnership, or other
entity which acquires a majority of the stock or assets of Homeplex by sale,
merger, consolidation, liquidation, or other form of transfer. Homeplex will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Homeplex to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that Homeplex would be required to
perform it if no such succession had taken place.
19. Attorneys' Fees. Homeplex agrees to reimburse Hamberlin
for his legal fees and costs in connection with the negotiation of this
Agreement. In the event an action or suit is brought by any party hereto to
enforce any of the terms of this Agreement, the prevailing party shall be
entitled to the payment of reasonable attorneys' fees and costs, as determined
by the judge of the court.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
HOMEPLEX MORTGAGE INVESTMENTS CORPORATION, a Maryland
corporation
By: _______________________________________________
Name: _____________________________________________
Its: ______________________________________________
___________________________________________________
Alan D. Hamberlin
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ADDENDUM TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
1. Addendum to Employment Agreement. This Addendum is attached
to an Amended and Restated Employment Agreement between Alan D. Hamberlin and
Homeplex Mortgage Investments Corporation dated as of December 21, 1995 (the
"Employment Agreement) and is intended to be incorporated in such Employment
Agreement as if it was a part thereof. All capitalized terms included in this
Addendum and not defined shall have the definitions given such term in the
Employment Agreement.
2. Conditional Grant of PSRs.
(a) Grant. Homeplex conditionally grants to
Hamberlin, as of December 21, 1995 (the "Grant Date"), the right, privilege and
option (the phantom stock right or "PSR") to be paid the appreciation occurring
with respect to 750,000 shares of the common stock of Homeplex ("PSR Shares"),
subject in all respects to the terms, conditions and provisions of this
Addendum. As of the Grant Date, Homeplex has also granted to Hamberlin an option
to purchase common stock of Homeplex pursuant to the Stock Option Agreement.
Under the terms of the Stock Option Agreement, Hamberlin may not exercise any
options thereunder prior to Shareholder Approval. If Shareholder Approval has
not been obtained (i) at a Homeplex shareholders' meeting in which the Stock
Option Agreement is the subject of a shareholder vote; (ii) on or before the day
prior to the third anniversary date of this Agreement; (iii) on or before the
day prior to a Change in Control; or (iv) on or before the day prior to any Date
of Termination (not including a Date of Termination occurring as a result of the
termination of Hamberlin for Cause), then on the earliest of the foregoing dates
(the "Effective Date"), Hamberlin shall have the PSRs described in the
Employment Agreement and this Addendum. If Shareholder Approval of the Stock
Option Agreement occurs prior to any Effective date, then this Addendum shall be
void and no PSRs shall be issued hereunder.
(b) PSR Shares. The PSR Shares shall be deemed to
become issued and outstanding for purposes of this Addendum (including Section 5
hereof) when the related PSRs vest, although the PSR Shares shall be only
phantom shares of common stock of Homeplex and shall not become actually issued
and outstanding. The number of PSR Shares deemed outstanding for purposes of
this Addendum (and the related PSRs held by Hamberlin) shall be reduced by the
number of PSRs exercised for cash under Section 4 and as provided in Section 6
hereof.
3. Vesting of PSRs. The PSRs shall vest according to following
schedule:
(a) 200,000 of the PSRs shall vest immediately;
(b) 275,000 of the PSRs shall vest on the first
anniversary of the Grant Date provided Hamberlin is either employed by Homeplex
on that date or has left the employment of Homeplex pursuant to a Consented
Termination as described in Section 6(e) of the Employment Agreement; and
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(c) 275,000 of the PSRs shall vest on the second
anniversary of the Grant Date provided Hamberlin is either employed by Homeplex
on that date or has left the employment of Homeplex pursuant to a Consented
Termination as described in Section 6(e) of the Employment Agreement.
Notwithstanding the foregoing, all PSRs shall vest upon a Change in Control or
upon the termination of Hamberlin's employment (without his consent) by Homeplex
for any reason other than death, disability or Cause. From and after the
Effective Date, Hamberlin may exercise vested PSRs with respect to any
outstanding PSR Shares at any time, and from time to time, in whole or in part,
during the PSR Exercise Period, as defined in Section 6 hereof.
4. Exercise of PSRs. From and after the Effective Date, all or
any portion of the vested PSRs may be exercised by Hamberlin upon written notice
to Homeplex, addressed to Homeplex at its principal place of business. Such
notice shall be signed by Hamberlin and shall state the election to exercise
PSRs and specify the number of PSR Shares with respect to which the PSRs are
being exercised. Upon the exercise of PSRs, Homeplex shall immediately pay to
Hamberlin for each PSR exercised cash in an amount equal to the difference
between the Base Price of an PSR Share and the current FMV Price of an PSR Share
(an "PSR Exercise Payment"). The amount by which the FMV Price exceeds the Base
Price shall be referred to as the "Excess Value." For purposes of the foregoing,
the "Base Price" of a PSR Share shall be equal to $1.50, which is the market
price (as determined pursuant to Section 10 below) of a PSR Share as of the
Grant Date and the "FMV Price" value of a PSR Share shall be equal to its market
price (as determined pursuant to Section 10 below) as of any applicable date.
5. PSR DER Payments. From and after the Effective Date, except
as provided in Section 10 of the Employment Agreement, to the extent that
Homeplex at any time declares and pays a dividend with respect to its shares of
common stock (the "Common Stock"), Homeplex shall also make a cash payment to
Hamberlin (the "PSR DER Payment") of an amount equal to the number of PSR Shares
deemed to be outstanding under Section 2 hereof on the date of such dividend
declaration multiplied by the per share dividend actually paid with respect to
the Common Stock. If Homeplex declares a dividend after the Grant Date but prior
to the Effective Date ("Interim Dividends"), Homeplex shall pay to Hamberlin on
the Effective Date the PSR DERs occurring with respect to such Interim
Dividends.
6. Termination of PSRs. All PSRs, to the extent not previously
exercised, shall terminate (and any remaining PSR Shares shall no longer be
considered to be outstanding hereunder) upon the fifth anniversary of the Grant
Date or as earlier provided in the Employment Agreement (such termination date
shall be referred to as the "PSR Termination Date"). The period from the Grant
Date to the PSR Termination date shall be referred to as the "PSR Exercise
Period."
7. Death or Disability of Hamberlin. If Hamberlin dies or
becomes disabled on or after the Effective Date and prior to the PSRs being
exercised in full but during his employment, the Excess Value (as calculated on
the date of death or on the Disablement Commencement Date, whichever is
applicable) of all unexercised PSRs which had vested prior to the date of death
or the Disablement Commencement Date shall be immediately paid to Hamberlin or
his estate as provided in Section 7(a) of the Employment Agreement. If Hamberlin
dies on or after the Effective Date but after the termination of his employment
pursuant to a Consented Termination, the Excess Value (as
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calculated on the date of death) of all unexercised PSRs that had vested prior
to the date of death shall be paid to Hamberlin's estate within 10 days.
8. No Privilege of Common Stock Ownership. The holder of the
PSRs granted hereunder shall not have any of the rights of a stockholder with
respect to the PSR Shares.
9. Capital Adjustments. The number of PSR Shares deemed
outstanding (and the Base Price) shall be proportionately adjusted for any
increase or decrease in the number of outstanding shares of Common Stock of
Homeplex resulting from a subdivision or consolidation of the Common Stock or
any other capital adjustment or the payment of a stock dividend or any other
increase or decrease in the number of such shares effected without Homeplex's
receipt of consideration therefor in money, services or property.
10. Calculation of Fair Market Value of Common Stock. The
market value of an PSR Share shall be the same as the market value of a share of
Common Stock. The market value of a share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(a) If the Common Stock is not at the time listed or
admitted to trading on any stock exchange but is traded in the over-the-counter
market, the fair market value shall be the mean between the highest bid and
lowest asked prices (or, if such information is available, the closing selling
price) per share of Common Stock on the date in question in the over-the-counter
market, as such prices are reported by the National Association of Securities
Dealers through its NASDAQ system or any successor system. If there are no
reported bid and asked prices (or closing selling price) for the Common Stock on
the date in question, then the mean between the highest bid price and lowest
asked price (or the closing selling price) on the last preceding date for which
such quotations exist shall be determinative of fair market value.
(b) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market value shall be
the closing selling price per share of Common Stock on the date in question on
the stock exchange determined by the Board to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no reported sale of Common Stock on
such exchange on the date in question, then the fair market value shall be the
closing selling price on the exchange on the last preceding date for which such
quotation exists.
(c) If the Common Stock at the time is neither listed
nor admitted to trading on any stock exchange nor traded in the over-the-counter
market, then the fair market value shall be determined by the Board after taking
into account such factors as the Board shall deem appropriate, including one or
more independent professional appraisals.
11. Compliance With Laws and Regulations. The exercise of an
PSR and the payment of cash hereunder upon such exercise shall be subject to
compliance by Homeplex and Hamberlin with all applicable requirements of law
relating thereto.
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12. Nonassignability. Neither the PSRs nor any rights or
privileges conferred thereby shall be assignable or transferable by Hamberlin
other than by will or by the laws of descent and distribution, and the PSRs
shall be exercisable only by Hamberlin during Hamberlin's lifetime.
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IN WITNESS WHEREOF, the parties hereto have executed this
Addendum as of the same date as the Employment Agreement.
HOMEPLEX MORTGAGE INVESTMENTS CORPORATION, a
Maryland corporation
By: ___________________________________________
Name: _________________________________________
Its: __________________________________________
Alan D. Hamberlin
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