Exhibit 10.4


 


CRIIMI
MAE Inc.


11200 Rockville Pike, Suite 400


Rockville, MD 20852


 


August 26, 2003


 


 


Cynthia O. Azzara


 


Dear Ms. Azzara:


 


On behalf of
CRIIMI MAE Inc. (the “Company”), we are delighted to offer you (“you”)
continued employment in the position of Executive Vice President of Finance,
Chief Financial Officer and Treasurer of the Company and as an employee of
CRIIMI MAE Management, Inc. (the “Employer”, together with the Company,
“CRIIMI”), in accordance with and pursuant to the following terms and
conditions of this letter (the “Agreement”):


 


	
  Provision

  	
   

  	
  Agreement

  
	
   

  	
   

  	
   

  
	
  1.  Effective Date

  	
   

  	
  August 26,
  2003 (the “Effective Date”).

  
	
   

  	
   

  	
   

  
	
  2.  Term

  	
   

  	
  For the
  avoidance of doubt, the termination of your Employment Agreement between you
  and the Company, dated July 25, 2001 as amended did not result in your
  termination of employment with CRIIMI and as such you shall be treated as a
  continuing employee for purposes of all employee benefit plans, paid time
  off, option and restricted stock agreements with no break in service; provided,
  that, if you ever become eligible for any severance or termination pay
  from the Company which is based on your length of service, for purposes of
  calculating any such severance or termination pay, you shall be deemed to
  have commenced employment with CRIIMI on the Effective Date with no prior
  service credit.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The term of
  your employment under this Agreement (the “Term”) shall commence on the
  Effective Date and shall have no specific time period and you shall be an “at
  will” employee of CRIIMI such that CRIIMI or you may terminate your
  employment with CRIIMI at any time and for any reason (or no reason).  Upon your termination of employment with
  CRIIMI, if requested by the Chairman or the President of the Company, you

  



 


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  shall resign
  all other officerships and directorships you hold with CRIIMI and their
  affiliates.

  
	
   

  	
   

  	
   

  
	
  3.  Position, Reports and Duties

  	
   

  	
  During the
  Term, you shall serve as an employee of the Employer and as the Executive
  Vice President of Finance, Chief Financial Officer and Treasurer of the
  Company and shall report to the President and Chief Operating Officer of the
  Company (the “COO”).  You shall have
  those powers and duties normally associated with your position and such other
  powers and duties as may be prescribed by the COO and/or the Board of
  Directors of the Company (the “Board”). 
  You shall devote all of your working time, attention and energies to
  the performance of your duties for CRIIMI.

  
	
   

  	
   

  	
   

  
	
  4.  Base Salary

  	
   

  	
  Beginning on
  the Effective Date and through December 31, 2003, you shall be paid a base
  salary of $37,800 (not subject to decrease) per month (pro rated for partial
  months) to be paid in accordance with the CRIIMI’s payroll practices.  Commencing on January 1, 2004, you shall
  be paid a base salary of $300,000 annually, subject to annual increase (but
  not decrease) by CRIIMI, to be paid in accordance with CRIIMI’s payroll
  practices (“Base Salary”).

  
	
   

  	
   

  	
   

  
	
  5.  Annual Bonus Target

  	
   

  	
  Commencing
  on January 1, 2004 and for each calendar year thereafter during the Term, you
  shall be eligible for an annual bonus upon the achievement of objective
  financial goals established by CRIIMI (the “Annual Bonus”) prior to the start
  of each calendar year during the Term.   CRIIMI shall establish the target amount of the Annual Bonus
  for which you are eligible prior to the start of each calendar year during
  the Term.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For the 2003
  calendar year, you shall be paid a guaranteed Annual Bonus of $53,024.  Provided you are still employed by CRIIMI,
  your guaranteed minimum Annual Bonus for the 2004, 2005 and 2006 calendar
  years shall be $100,000.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any such
  Annual Bonus earned during a calendar year shall be paid at such time as
  CRIIMI customarily pays annual bonuses, but you shall receive the entirety of
  the Annual Bonus to which you are entitled if you are employed with CRIIMI as
  of December 31 of such calendar year.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If your
  employment is terminated (i) by CRIIMI for any reason other than Cause (as
  defined below) or (ii) due to your death or permanent and total disability
  within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986,
  as amended (the

  



 


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  “Code”), you
  shall be paid a pro-rated portion of your guaranteed minimum Annual Bonus for
  the year of termination based on the number of days you worked during the
  relevant calendar year divided by 365 or 366 in the case of a leap year
  (e.g., if you are terminated without Cause by CRIIMI on April 30, 2005, you
  shall be paid a pro-rated portion of the guaranteed minimum Annual Bonus that
  would have been paid for the year of termination equal to $100,000 X 120/365
  or $32,876.71).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If your
  employment should be terminated by you for any reason or by CRIIMI for Cause
  during any calendar year, no Annual Bonus, including a guaranteed minimum
  Annual Bonus, will be paid for such calendar year or any future calendar
  year.

  
	
   

  	
   

  	
   

  
	
  6.  Restricted Stock

  	
   

  	
  On the
  Effective Date, or as soon as feasible thereafter, subject to the approval of
  the Compensation and Stock Option Committee of the Board of Directors of the
  Company (the “Committee”), you shall be granted a restricted stock award of
  common stock, $.01 par value per share, of the Company (“Common Stock”) in an
  amount of whole shares equal to 13,055 (the “2003 Stock Award”).  The 2003 Stock Award shall be granted
  under the terms of the Company’s stock incentive plan as evidenced by a
  restricted stock award agreement substantially in the form attached hereto as
  Exhibit A.  The Company shall use its
  best efforts to have the Committee approve the 2003 Stock Award by September
  5, 2003.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Provided you
  are still then employed by CRIIMI, on each of December 31, 2004, December 31,
  2005 and December 31, 2006, subject to the approval of the Committee, you
  shall be granted a stock award in an amount of whole shares (fractional
  shares to be settled in cash) equal to $50,000 divided by the closing price
  of the Common Stock on the relevant December 31 (the “Additional Awards”).  Each such Additional Award shall vest as
  to 33-1/3% of the shares subject thereto on each of the first three
  anniversaries of the date of grant of the relevant Additional Award; provided,
  that, you are still then employed by CRIIMI on the relevant vesting
  dates.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If your
  employment is terminated at any time due to your death or permanent and total
  disability within the meaning of Section 22(e)(3) of the Internal Revenue
  Code of 1986, as amended (the “Code”) or your employment is terminated by
  CRIIMI without Cause, then, with respect to each Additional Award that has
  been granted to you prior to such date of termination of employment, all
  restrictions on any such Additional Award(s)

  



 


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  shall automatically
  lapse as of such date.  If your
  employment with CRIIMI terminates for any other reason, each Additional
  Award, or portion thereof, still subject to restriction, shall be forfeited.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For purposes
  of this Agreement, CRIIMI shall have “Cause” to terminate your employment
  upon your (i) conviction of, or plea of guilty or nolo contendere to, a
  felony; or (ii) material breach of the Agreement which is not cured, if
  curable, within ten (10) days following CRIIMI’s written notice to you of the
  event giving rise to such breach; or (iii) willful misconduct that is
  materially injurious to CRIIMI; or (iv) habitual drug or alcohol use which
  materially impairs your ability to perform your duties for CRIIMI; or (v)
  engaging in fraud, embezzlement or any other illegal conduct with respect to
  CRIIMI or any of their affiliates which is materially injurious to CRIIMI.

  
	
   

  	
   

  	
   

  
	
  7.  Employee Benefits

  	
   

  	
  During the
  Term, you shall be eligible to participate in all of CRIIMI’s benefit plans,
  in accordance with their terms, at a level equal to or greater than that made
  available to all other executives or employees of CRIIMI generally, except
  the Chief Executive Officer and President and COO.

  
	
   

  	
   

  	
   

  
	
  8.  Termination

  	
   

  	
  Except as
  provided in Sections 5 and 6 of this Agreement and the Letter Agreement dated
  August 26, 2003, between you and the Company (the “Letter Agreement”), upon
  your termination of employment with CRIIMI for any reason, you shall be paid
  any earned, but yet unpaid Base Salary through the date of termination of
  employment with CRIIMI, all accrued, but unused vacation pay through the date
  of termination of employment with CRIIMI and you shall not receive any other
  payments or benefits from CRIIMI except as otherwise required by (i)
  applicable law; (ii) the terms and conditions of any CRIIMI employee benefit
  or compensation plans (other than as noted in Section 2); or (iii) any other
  CRIIMI policy or practice (e.g., officer indemnification).

   

  
	
   

  	
   

  	
   

  
	
  9.  Governing Law

  	
   

  	
  This
  Agreement is governed by, and is to be construed and enforced in accordance
  with, the laws of the State of Maryland without regard to principles of
  conflicts of laws.

  
	
   

  	
   

  	
   

  
	
  10.  Miscellaneous

  	
   

  	
  (a)  Counterparts.  This Agreement may be executed in two or
  more-counterparts, each of which shall be deemed to be an original but all of
  which together will constitute one and the same instrument.

  



 


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  (b)  Entire Agreement.  Except for the Letter Agreement, this
  Agreement sets forth the entire agreement of the parties hereto in respect of
  the subject matter contained herein and supersede all prior agreements,
  promises, covenants, arrangements, communications, representations or
  warranties, whether oral or written, by any officer, employee or
  representative of any party hereto in respect of such subject matter.  Except for the Letter Agreement, any prior
  agreement of the parties hereto in respect of the subject matter contained
  herein, including, without limitation, the Employment Agreement between the
  Company and you, dated as of July 25, 2001, as amended is hereby terminated
  and canceled as of the Effective Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)  Section Headings.  The section headings in this Agreement are
  for convenience of reference only, and they form no part of this Agreement
  and shall not affect its interpretation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)  Withholding.  All payments hereunder shall be subject to
  any required withholding of Federal, state and local taxes pursuant to any
  applicable law or regulation.

  
	
   

  	
   

  	
   

  
	
  11.  D&O Insurance

  	
   

  	
  During the
  Term, you shall be covered by any directors and officers insurance the
  Company maintains from time to time by the Company for its directors and
  officers.  In addition, you shall be
  entitled throughout the Term in your capacity as an officer and/or director
  of the Company the benefit of the indemnification provisions contained in the
  Certificate of Incorporation and/or By-laws of the Company as in effect from
  time to time, to the extent not prohibited by applicable law at the time of
  the assertion of any liability against you.

  
	
   

  	
   

  	
   

  
	
  12.  Resignation

  	
   

  	
  Intentionally
  Left Blank.

  
	
   

  	
   

  	
   

  
	
  13.  Place of Performance

  	
   

  	
  Your
  principal place of employment shall be at the Company’s offices in Rockville,
  Maryland.

  



 


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If you are in agreement
with the terms and conditions of this Agreement, please execute and date both
copies and return one to me at the address set forth above.


 


	
   

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CRIIMI MAE
  Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Barry S.
  Blattman

  	
   

  
	
   

  	
  Barry S.
  Blattman

  	
   

  
	
   

  	
  Chairman/President/CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CRIIMI MAE
  Management, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Barry S.
  Blattman

  	
   

  
	
   

  	
  Barry S.
  Blattman

  	
   

  
	
   

  	
  Chairman/President/CEO

  	
   

  



 


 


Signatures Continue
on Following Page


 


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Accepted and agreed to:


 


 


	
  /s/ Cynthia
  Azzara

  	
   

  	
  August 26,
  2003

  	
   

  
	
  Cynthia
  Azzara

  	
  Date

  



 


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