Exhibit 10.4
FORM OF EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
__________, 1999, by and between Centerprise Advisors, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxx ("Employee").
PRELIMINARY RECITALS
A. Reference is made to those certain Merger Agreements dated as of March
31, 1999 (collectively, the "Merger Agreement"), pursuant to which the Founding
Companies will be merged with wholly-owned subsidiaries of the Company (the
"Mergers"). Concurrently therewith, the Company will close an initial public
offering of its common stock.
B. Following the consummation of the Mergers, the Company, through its
subsidiaries, will be a provider of professional and business and financial
services on a national basis (the "Business").
C. The Company desires to employ Employee, and Employee desires to be
employed by the Company, in an executive capacity, all under the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants of
the parties hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Employment.
1.1 Engagement of Employee. The Company agrees to employ Employee as
Vice-President, Chief Accounting Officer and Treasurer of the Company and
Employee agrees to accept such employment, all in accordance with the terms
and conditions of this Agreement.
1.2 Duties and Powers.
(a) During the Employment Period (as defined herein), Employee
will serve as the Company's Vice-President, Chief Accounting Officer
and Treasurer and will have such responsibilities, duties and
authorities, and will render such services for the Company and its
affiliates as the Board of Directors of the Company (the "Board")
shall from time to time reasonably direct; provided, however, that
such duties and responsibilities shall be commensurate with the
positions of Vice-President, Chief Accounting Officer and Treasurer of
the Company. Employee shall report to the Company's Chief Executive
Officer and Chief Financial Officer. Employee agrees to serve the
Company diligently and faithfully during the Employment Period and to
devote Employee's best efforts,
highest talents and skills and full time and attention to the
furtherance and success of the Business.
(b) Employee shall faithfully adhere to, execute and fulfill all
policies established by the Board.
(c) Employee shall not, during the Employment Period, be engaged
in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties
and responsibilities hereunder. Notwithstanding the foregoing, and
subject to Board's approval, Employee may have outside board
participation and receive speaking and publication honorarium fees and
royalties. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or
manner as will neither require Employee's services in the operation or
affairs of the companies or enterprises in which such investments are
made nor violate the terms of Section 3 hereof.
1.3 Employment Period. Employee's employment under this Agreement
shall be for a period of three years beginning on the date of the Closing
of the Mergers (the "Initial Employment Period"). This Agreement shall
automatically renew for successive one-year periods (each one-year period
shall be referred to herein as a "Renewal Period") unless either the
Company or Employee, as the case may be, provides written notice to the
other party at least one hundred twenty (120) days prior to the termination
of any such period, stating its or his desire to terminate this Agreement.
The Initial Employment Period and each successive Renewal Period shall be
referred to herein together as the "Employment Period". Notwithstanding
anything to the contrary contained herein, the Employment Period is subject
to termination pursuant to Section 1.4 below.
1.4 Termination of Employment for Cause, Death or Disability. The
Company has the right to terminate Employee's employment under this
Agreement, by notice to Employee in writing at any time, for Cause (as
hereinafter defined), and such employment shall automatically terminate
upon the death or the Disability (as hereinafter defined) of Employee. Any
such termination shall be effective upon the date of service of such notice
pursuant to Section 7.8 hereof, in the case of termination for Cause, or
immediately upon the death or Disability of Employee, and the Employment
Period shall terminate as of the effective date of such termination.
"Cause," as used herein, means the occurrence of any of the following
events:
(i) final non-appealable conviction of (A) a felony or (B) any
crime involving moral turpitude;
(ii) the willful failure of Employee to comply with reasonable
directions of the Board after (A) written notice is delivered to
Employee describing such willful failure and (B) if reasonably
possible or practical to cure, Employee has failed to cure or take
substantial steps to cure such willful failure after a reasonable
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time period, as determined by the Board in its reasonable discretion
(not to be less than 30 days);
(iii) the good faith determination by the Board in the exercise
of its reasonable judgment that Employee has committed an act or acts
in the course of his employment constituting (A) fraud, willful
dishonesty or material misconduct with respect to the business and
affairs of the Company or (B) misappropriation of property of the
Company or its affiliates;
(iv) a material breach by Employee of any of the terms,
conditions or covenants set forth in Section 3 of this Agreement; or
(v) a material breach by Employee of any of the other terms or
conditions of this Agreement if (A) written notice is delivered to
Employee describing such breach and (B) Employee has failed to cure or
take substantial steps to cure such breach after a reasonable time
period, as determined by the Board in its discretion (not to be less
than 30 days from the date of such notice).
Employee shall be deemed to have a "Disability" for purposes of this
Agreement if he is unable to perform, by reason of physical or mental
incapacity, his material duties or obligations under this Agreement, with
or without reasonable accommodation, for a total period of 90 days in any
360-day period. The Board shall determine, according to the facts then
available, whether and when the Disability of the Employee has occurred.
Such determination shall not be arbitrary or unreasonable and the Board
will, if possible, take into consideration the expert medical opinion of a
physician mutually agreed upon by Employee (or his representative, if any)
and the Company, after such physician has completed an examination of
Employee. Employee agrees to make himself available for such examination
upon the reasonable request of the Company.
2. Compensation and Benefits.
2.1 Salary. In consideration of Employee performing his duties under
this Agreement during the Employment Period, the Company will pay Employee
a base salary at a rate of $175,000 per annum (the "Base Salary"), payable
in accordance with the Company's regular payroll policy for salaried
employees. The Base Salary may be increased (but not decreased), from time
to time during the Employment Period, as determined by the compensation
committee of the Board (the "Compensation Committee") in its sole
discretion. If the Employment Period is terminated pursuant to Section 1.4
above, then the Base Salary for any partial year will be prorated based on
the number of days elapsed in such year during which services were actually
performed by Employee.
2.2 Annual Bonus. Employee shall be eligible to earn an annual bonus
of up to 100% of Employee's Base Salary under the Company's incentive
compensation policies for executive employees ("Bonus Program") based upon
such factors as (i) the financial performance of the Company, (ii) Company
stock price performance; (ii) the achievement of certain operating
objectives; and/or (iv) the achievement of personal performance goals. Such
criteria and/or goals, and the amount of a bonus, if any shall be
established by the
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Compensation Committee in its sole discretion, provided that at least 50%
of Employee's bonus for any year will be based upon the Company achieving
its earnings per share target established by the Board for that year. All
bonuses awarded to Employee hereunder shall be payable in accordance with
Company policy. Any bonus for a partial year shall be prorated for that
year.
2.3 Benefits, Expenses and Employee Plans.
(a) During the Employment Period, the Company agrees to provide
to Employee such fringe and other employee benefits as are generally
provided, from time to time, to other senior officers of the Company,
including without limitation vacation, health, hospitalization,
disability, dental, life and other insurance benefits (including
coverage for dependents), and the opportunity to participate in the
Company's stock option plans and 401(k) plans. In addition, the
Company will provide Employee with a car allowance and with such other
executive perquisites as may be determined by the Compensation
Committee. Subject to Section 2.4(c), the Company shall retain the
right to discontinue or modify any employee benefit program at any
time. The Company will reimburse Employee in accordance with Company
policy for his normal out-of-pocket expenses incurred in the course of
performing his duties hereunder.
(b) In addition, during the Employment Period, the Company will
reimburse Employee for his relocation expenses incurred if the Company
requires Employee to relocate. The relocation benefit package shall
include reimbursement of moving expenses, sales commission on sale of
existing home, up to two months temporary living cost, up to three
housing-hunting trips (including expenses for spouse), and other
customary benefits. The Company shall also make an additional payment
(a "Relocation Gross-Up Payment") in an amount necessary to reimburse
Employee for any federal, state and local income tax imposed by reason
of any relocation expense payments, such that, after the payment of
such federal, state and local income tax, Employee shall retain an
amount equal to the amount Employee would have obtained had the income
taxes not applied. For purposes of determining the amount of any
Relocation Gross-Up Payment, Employee shall be deemed to pay federal,
state and local income taxes at the highest applicable marginal rate
of taxation in the calendar year in which the Relocation Gross-Up
Payment is to be made. All determinations required to be made under
this Section 2.3(b) including the amount of such Relocation Gross-Up
Payment shall be made by the Company, which shall provide detailed
supporting calculations to Employee within 15 business days of
Employee's request for such determination. The Relocation Gross-Up
Payment shall be paid by the Company within 30 days of the
determination of the amount thereof.
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2.4 Obligations Upon Termination of Employment.
(a) If, during the Employment Period and prior to a Change of
Control (as defined below) (i) the Company shall terminate Employee's
employment for any reason (other than for Cause pursuant to Section
1.4 of this Agreement), or (ii) Employee shall voluntarily terminate
his employment for Good Reason (as defined below), then Employee shall
be entitled to receive severance compensation equal to the sum of (A)
continuance of his Base Salary and Deemed Bonus (as defined) for a
period of two years commencing on the last day of the Employment
Period (the "Severance Period"), (B) (1) if permitted under Company's
group health, life and disability insurance coverage ("Insurance
Coverage"), continuation at the cost of Company of Employee's and
Employee's dependents' coverage thereunder (subject to such changes in
coverage as shall apply to Company's employees generally) or (2) if
not so permitted, reimbursement by the Company of the premiums for
group health insurance coverage otherwise payable by Employee under
COBRA, until the end of the Severance Period or until comparable
employment is obtained, whichever occurs first, and (C) his pro rated
bonus, as determined by the Compensation Committee in its good faith
judgment, for the portion of any fiscal year prior to the termination
date ((A), (B) and (C) collectively, the "Severance Benefits"). The
Severance Benefits payable under (A) and (B) (2) above shall be paid
in equal installments on the Company's normal payroll payment dates
occurring during the Severance Period; the Severance Benefit payable
under (C) above shall be paid in a lump sum not later than 30 days
following the last day of the Employment Period. It shall be a
condition to Employee's right to receive the Severance Benefits that
(i) Employee shall execute and deliver to the Company a written
separation agreement, in form and substance satisfactory to the
Company, which agreement shall, among other things, contain (X) a
general release by Employee of all claims arising out of Employee's
employment or termination of employment, (Y) a covenant by Employee to
cooperate with the Company in prosecuting or defending any litigation
involving third parties and (Z) a covenant by Employee not to
disparage the Company, and (ii) Employee shall be in compliance with
all of Employee's obligations which survive termination hereof,
including without limitation those arising under Sections 3 and 4
hereof. The Severance Benefits are intended to be in lieu of all other
payments to which Employee might otherwise be entitled in respect of
termination of Employee's employment without Cause. Employee shall not
be required to seek other employment during the Severance Period. In
addition to the payment of Severance Benefits, all options to purchase
Company stock granted to Employee prior to the date of (i) the
termination of Employee by the Company without Cause, (ii) Employee's
voluntary termination of his employment for Good Reason or (iii)
Employee's death or Disability shall vest and become exercisable on
the date of such event and for a period of one year thereafter. Except
as expressly provided above, no fringe or other employee benefits
shall be payable during or after the Severance Period.
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(b) If, during the Employment Period and following a Change of
Control, (i) the Company shall terminate Employee's employment for any
reason (other than for Cause pursuant to Section 1.4 of this
Agreement), or (ii) Employee shall voluntarily terminate his
employment for Good Reason, Employee shall be entitled to receive the
same Severance Benefits as are provided for in Section 2.4(a) above,
subject to all of the terms and conditions set forth in said section,
except that the Severance Benefits payable under (A) of said section
shall be paid in a lump sum not later than 30 days following the last
day of the Employment Period.
(c) For purposes of this Agreement, "Good Reason" shall mean, so
long as Employee has not been guilty of the conduct giving rise to the
right to terminate Employee for Cause, (i) the failure to elect
Employee to the office of Vice-President and Chief Accounting Officer
of the Company (or a comparable or superior office), the removal of
Employee from such position or the assignment to Employee of any
additional duties or responsibilities or a reduction in Employee's
duties or responsibilities which, in either case, are inconsistent
with those customarily associated with such position, or an adverse
change in the Employee's reporting lines; (ii) the Company's requiring
Employee to have his primary office at any location other than the
Chicago, Illinois area, except for travel reasonably required in the
performance of Employee's duties; (iii) any material decrease in the
Employee's salary or incentive bonus opportunities; (iv) a material
breach of this Agreement by the Company if (A) written notice is
delivered to the Company describing such breach and (B) the Company
has failed to cure or take substantial steps to cure such breach after
a reasonable period of time (not to be less than 30 days); and (v) the
termination by the Company of any employee benefit plan in which the
Employee is participating unless (A) such plan is terminated as to all
senior executives of the Company, and (B) the value of the remaining
compensation and benefits offered to Employee (including any
compensation and benefits offered in lieu of such plan) is not less
than prior to such termination.
(d) For purposes of this Agreement, a "Change of Control" of the
Company shall be deemed to have occurred on the first of any of the
following:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of thirty percent (30%)
or more of either (A) the then-outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or (B)
the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition directly from the Company
other than in connection with the acquisition by the Company or
its affiliates of a business, (B) any acquisition by the
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Company, (C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (D) any acquisition by a
lender to the Company pursuant to a debt restructuring of the
Company, or (E) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 2.4(d);
(ii) Individuals who, immediately following the closing of
the Mergers, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to such time whose election, or nomination for
election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;
(iii) Consummation of a reorganization, merger or
consolidation of the Company or any direct or indirect subsidiary
of the Company or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than sixty percent
(60%) of, respectively, the then-outstanding shares of common
stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such Business Combination (which shall include for these
purposes, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination and any
Person beneficially owning, immediately prior to such Business
Combination, directly or indirectly, 30% or more of the
Outstanding Common Stock or Outstanding Voting Securities, as the
case may be) beneficially owns, directly or indirectly, thirty
percent (30%) or more of, respectively, the then-outstanding
shares of common stock of the
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corporation resulting from such Business Combination, or the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board
of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(iv) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company other than to
a corporation which would satisfy the requirements of clauses
(A), (B) and (C) of Subsection (iii) of this Section 2.4(d),
assuming for this purpose that such liquidation or dissolution
was a Business Combination.
(e) For purposes of this Agreement, "Deemed Bonus" means an
amount equal to the higher of (A) the bonus paid or payable to
Employee under the Bonus Program for the fiscal year immediately
preceding the fiscal year in which termination of employment occurs
and (B) the maximum bonus payable to Employee under the Bonus Program
for the fiscal year in which termination of employment occurs.
(f) If the Company shall terminate Employee's employment during
the Employment Period pursuant to Section 1.4, the Company shall have
no further obligations hereunder or otherwise with respect to
Employee's employment from and after the termination or expiration
date (except payment of Employee's Base Salary accrued through the
date of termination or expiration), and the Company shall continue to
have all other rights available hereunder (including, without
limitation, all rights under Sections 3 and 4 hereof at law or in
equity).
(g) For the avoidance of doubt, Severance Benefits shall not be
payable if Employee's employment is terminated by reason of his or her
death or Disability, but shall continue to be payable during the
Severance Period if his employment is terminated without Cause and he
or she subsequently dies or becomes disabled.
3. Covenants.
3.1 Employee's Acknowledgment. Employee acknowledges that:
(a) the Company is and will be engaged in the Business during
the Employment Period and thereafter;
(b) Employee is one of a limited number of persons who will
manage the Business;
(c) Employee will occupy a position of trust and confidence with
the Company after the date of this Agreement and, during the
Employment Period and
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Employee's employment under this Agreement, Employee will become
familiar with the Company's proprietary and confidential information
concerning the Company and the Business;
(d) the agreements and covenants contained in this Section 3 are
essential to protect the Company and the goodwill of the Business and
are a condition precedent to the Company's entering into this
Agreement;
(e) Employee's employment with the Company has special, unique
and extraordinary value to the Company and the Company would be
irreparably damaged if Employee were to provide services to any person
or entity in violation of the provisions of this Agreement; and
(f) Employee has means to support himself or herself and his or
her dependents other than by engaging in the Business as conducted by
the Company during the Employment Period (the "Restricted Business")
and the provisions of this Section 3 will not impair such ability.
3.2 Non-Compete. Employee hereby agrees that during the Employment
Period and through the period ending with the second anniversary of the
last day of the Employment Period (collectively, the "Restrictive Period"),
he shall not (except on behalf of the Company during the Employment
Period), for any reason whatsoever, directly or indirectly, whether
individually or as an officer, director, shareholder, owner, partner, joint
venturer, employee, independent contractor, consultant or advisor to or of
any entity, or in any other capacity:
(a) engage, participate or invest in any business which is
directly competitive with the Restricted Business anywhere in the
United States of America (the "Territory"); provided, however, that
nothing contained herein shall be construed to prevent Employee from
investing in up to 2% of the outstanding stock of any competing
corporation that is listed on a recognized national, international or
regional securities exchange or traded in the U.S. over-the-counter
market, but only if Employee is not actively involved in and does not
render consulting services to the business of said corporation,
(b) sell or provide any competitive products or services to, or
solicit for the purpose of selling or providing any competitive
products or services to, any person or entity that was a customer of
the Company at any time during the one-year period ending on the last
day of the Employment Period (the "Termination Date") or that was
known by Employee to have been actively being solicited by the Company
to become a customer of the Company at any time during such period,
(c) solicit for employment or engagement, or influence or induce
to leave the Company's employment, or knowingly cause to be employed
or engaged, any person who is employed or engaged by the Company on
the Termination Date or during the Restrictive Period, unless such
person has been out of the employ of
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the Company for at least 180 days; provided, that the Employee shall
be permitted to solicit and hire any member of his immediate family,
or
(d) enter into, or call upon or request non-public information
for the purpose of entering into, an Acquisition Transaction with any
entity with respect to which the Company made an offer or proposal
for, or entered into discussions or negotiations for, or evaluated
with the intent of making a proposal for, an Acquisition Transaction,
within the one year immediately preceding the Termination Date.
For purposes of this Agreement, an "Acquisition Transaction" means a
merger, consolidation, purchase of material assets, purchase of a material
equity interest, tender offer, recapitalization, accumulation of shares,
proxy solicitation or other business combination.
3.3 Intellectual Property Rights. Employee will promptly communicate,
disclose and transfer to the Company free of all encumbrances and
restrictions (and will execute and deliver any papers and take any action
at any time deemed reasonably necessary by the Company to further establish
such transfer) all of Employee's right, title and interest in and to all
ideas, discoveries, inventions and improvements relating to the Business
created, originated, developed or conceived of by Employee solely or
jointly with others during the term of Employee's employment hereunder,
whether or not during normal working hours. Employee agrees that all right,
title and interest in and to all such ideas, discoveries, inventions and
improvements shall belong solely to the Company, whether or not they are
protected or protectible under applicable patent, trademark, service xxxx,
copyright or trade secret laws. Employee agrees that all work or other
material containing or reflecting any such ideas, discoveries, inventions
or improvements shall be deemed work made for hire as defined in Section
101 of the Copyright Act, 15 U.S.C.(S)101. Such transfer shall include all
patent rights, copyrights, trademark and service xxxx rights, and trade
secret rights (if any) to such ideas, discoveries, inventions and
improvements in the United States and in all other countries. Employee
further agrees, at the expense of the Company, to take all such reasonable
actions and to execute and deliver all such assignments and other lawful
papers relating to any aspect of the prosecution of such rights in the
United States and all other countries as the Company may request at any
time during the Employment Period or after termination thereof.
3.4 Interference with Relationships. Other than in the performance of
his or her duties hereunder, during the Restrictive Period, Employee shall
not, directly or indirectly, as employee, agent, consultant, stockholder,
director, co-partner or in any other individual or representative capacity
solicit or encourage any present or future customer, supplier or other
third party to terminate or otherwise alter his, her or its relationship
with the Company with respect to the Restricted Business.
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3.5 Confidential Information. Other than in the performance of his
duties hereunder, during the Restrictive Period and thereafter, Employee
shall keep secret and retain in strictest confidence, and shall not,
without the prior written consent of the Company, directly or indirectly
furnish, make available or disclose to any third party or use for the
benefit of himself or any third party, any Confidential Information. As
used in this Agreement, "Confidential Information" shall mean any
information relating to the business or affairs of the Company or the
Business, including, but not limited to, information relating to financial
statements, employees, clients, suppliers, pricing, marketing, equipment,
programs, strategies, analyses, profit margins, or other proprietary
information of or used by the Company or any subsidiary of Company in
connection with the Business; provided, however, that Confidential
Information shall not include any information which is in the public domain
or becomes known in the industry through no wrongful act on the part of
Employee. Employee acknowledges that the Confidential Information is vital,
sensitive, confidential and proprietary to the Company.
3.6 Blue-Pencil. If any court of competent jurisdiction shall at any
time deem the Restrictive Period too lengthy or the Territory too
extensive, the other provisions of this Section 3 shall nevertheless stand,
the Restrictive Period herein shall be deemed to be the longest period
permissible by law under the circumstances and the Territory herein shall
be deemed to comprise the largest territory permissible by law under the
circumstances. The court in each case shall reduce the time period and/or
territory to permissible duration or size.
3.7 Return of Company Materials Upon Termination. Employee
acknowledges that all price lists, sales manuals, catalogs, binders, client
lists and other client information, supplier lists and other supplier
information, financial information, memoranda, correspondence and other
records or documents including information stored on computer disks or in
computer readable form, containing Confidential Information prepared by
Employee or coming into Employee's possession by virtue of Employee's
employment by the Company is and shall remain the property of the Company
and that upon termination of Employee's employment hereunder, Employee
shall return immediately to the Company all such items in Employee's
possession, together with all copies thereof.
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3.8 Remedies. Employee acknowledges and agrees that the covenants set
forth in this Section 3 (collectively, the "Restrictive Covenants") are
reasonable and necessary for the protection of the Company's business
interests, that irreparable injury will result to the Company if Employee
breaches any of the terms of said Restrictive Covenants, and that in the
event Employee breaches any such Restrictive Covenants, the Company will
have no adequate remedy at law. Employee accordingly agrees that in the
event Employee breaches or threatens to breach any of the Restrictive
Covenants, the Company shall be entitled to immediate temporary injunctive
and other equitable relief, without bond and without the necessity of
showing actual monetary damages. In addition, if Employee is otherwise
entitled to receive Severance Benefits and breaches any of the terms of the
Restrictive Covenants, Employee will not be entitled to the payment of any
further Severance Benefits hereunder. Nothing contained herein shall be
construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or the threat of such a breach by Employee,
including the recovery of any other damages which it is able to prove.
3.9 Company. For purposes of this Section 3, the term "Company" shall
include the Company and its respective subsidiaries, affiliates, assignees
and any successors in interest of the Company or its subsidiaries.
4. Stock Transfer Restrictions. Reference is hereby made to the transfer
restrictions imposed on Employee by Section 9 of the Stockholders' Agreement,
dated the date hereof, among the Company, Employee and the other stockholders
named therein (the "Stockholders' Agreement"), which transfer restrictions are
incorporated by reference herein. If during the Employment Period and prior to
the date that is two and one half (2 1/2) years from the closing of the Mergers,
Employee voluntarily terminates his employment with the Company other than (i)
for "Good Reason" as defined in Section 2.4(c) or (ii) under circumstances
approved by the Board, the Restricted Shares held by Employee at the date of
termination shall remain subject to the transfer restrictions until the fifth
anniversary of the Closing of the Mergers. "Restricted Shares" has the meaning
given such term in the Stockholders' Agreement.
5. Effect of Termination. If Employee or the Company should terminate
Employee's employment for any reason, then, notwithstanding such termination,
those provisions contained in Sections 3, 4, 5, 6 and 7 hereof shall remain in
full force and effect.
6. Income Tax Treatment. Employee and the Company acknowledge that it is
the intention of the Company to deduct all amounts paid under Section 2 hereof
as ordinary and necessary business expenses for income tax purposes. Employee
agrees and represents that he will treat all such amounts as required pursuant
to all applicable tax laws and regulations, and should he fail to report such
amounts as required, he will indemnify and hold the Company harmless from and
against any and all taxes, penalties, interest, costs and expenses, including
reasonable attorneys' and accounting fees and costs, which are incurred by
Company directly or indirectly as a result thereof.
7. Gross Up for Excise Tax Liability. If it shall be determined that any
payment or benefit received or to be received by Employee pursuant to Section
2.4 of this Agreement
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including, without limitation, the vesting of an option or other non-cash
benefit or property, whether pursuant to the terms of this Agreement or any
other plan, arrangement, or agreement with the Company or any affiliated company
(all such payments and benefits a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") (or any successor provision) (the "Excise Tax"), then the Company shall
make to Employee an additional payment (a "Gross-Up Payment") in an amount
necessary to reimburse Employee, on an after-tax basis, for the Excise Tax and
for any federal, state and local income tax and excise tax (including any
interest and penalties imposed with respect to such taxes) that may be imposed
by reason of the Payment, such that, after the payment of such Excise Tax,
federal, state and local income tax and excise tax (and any interest and
penalties relating thereto), Employee shall retain an amount equal to the amount
Employee would have obtained had the Excise Tax not applied. For purposes of
determining the amount of any Gross-Up Payment, Employee shall be deemed to pay
federal, state and local income taxes at the highest applicable marginal rate of
taxation in the calendar year in which the Gross-Up Payment is to be made. All
determinations required to be made under this Section 7, including whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment shall be
made by the Company's Accounting Firm, which shall provide detailed supporting
calculations both to the Company and Employee within 15 business days of the
request for such determination. Such request may be made by either party hereto.
The Company shall pay the fees and expenses of the Accounting Firm in connection
with any determinations hereunder. The Gross-Up Payment shall be paid by the
Company within 30 days of the Accounting Firm's determination of the amount
thereof.
8. Miscellaneous.
8.1 Life Insurance. The Company may at its discretion and at any time
apply for and procure as owner and for its own benefit and at its own
expense, insurance on the life of Employee in such amounts and in such form
or forms as the Company may choose. Employee shall cooperate with the
Company in procuring such insurance and shall, at the request of the
Company, submit to such medical examinations, supply such information and
execute such documents as may be required by the insurance company or
companies to whom the Company has applied for such insurance. Employee
shall have no interest whatsoever in any such policy or policies, except
that, upon the termination of Employee's employment hereunder, Employee
shall have the privilege of purchasing any such insurance from the Company
for an amount equal to the actual premiums thereon previously paid by the
Company.
8.2 Indemnification. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the
Company against Employee), by reason of the fact that Employee is or was
performing services under this Agreement, then the Company shall indemnify
Employee against all expenses including attorneys' fees, judgments, fines
and amounts paid in settlement, as actually and reasonably incurred by
Employee in connection therewith. In the event that both Employee and the
Company are made a party to the same third-party action, complaint, suit or
proceeding, the Company agrees to engage competent legal representation,
and Employee agrees to use the same representation, provided that if
counsel selected by the Company shall have a conflict of
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interest that prevents such counsel from representing Employee, Employee
may engage separate counsel and the Company shall pay all attorneys' fees
of such separate counsel. Further, while Employee is expected at all times
to use Employee's best efforts to faithfully discharge his duties under
this Agreement, Employee cannot be held liable to the Company for errors or
omissions made in good faith where Employee has not exhibited gross,
willful or wanton negligence or misconduct or performed criminal and
fraudulent acts which materially damage the business of the Company.
8.3 Assignment. No party hereto may assign or delegate any of its
rights or obligations hereunder without the prior written consent of the
other party hereto; provided, however, that the Company shall have the
right to assign all or any part of its rights and obligations under this
Agreement (i) to any affiliate of the Company to which the Business of the
Company is assigned at any time, any subsidiary or affiliate of the Company
or any surviving entity following any merger or consolidation of any of
those entities with any entity other than the Company or (ii) in connection
with the sale of the Business by the Company. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the
benefit of the respective legal representatives, heirs, successors and
assigns of the parties hereto whether so expressed or not.
8.4 Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement and all other agreements entered into by the parties hereto
on the date hereof set forth the entire understanding of the parties, and
supersede and preempt all prior oral or written understandings and
agreements, with respect to the subject matter hereof.
8.5 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
8.6 Amendment; Modification. No amendment or modification of this
Agreement and no waiver by any party of the breach of any covenant
contained herein shall be binding unless executed in writing by the party
against whom enforcement of such amendment, modification or waiver is
sought. No waiver shall be deemed a continuing waiver or a waiver in
respect of any subsequent breach or default, either of a similar or
different nature, unless expressly so stated in writing.
8.7 Governing Law. This Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the
laws of the State of Delaware, without giving effect to provisions thereof
regarding conflict of laws.
8.8 Notices. All notices, demands or other communications to be given
or delivered hereunder or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been properly served if (a)
delivered personally, (b) delivered
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by a recognized overnight courier service, (c) sent by certified or
registered mail, return receipt requested and first class postage prepaid,
or (d) sent by facsimile transmission followed by a confirmation copy
delivered by a recognized overnight courier service the next day. Such
notices, demands and other communications shall be sent to the addresses
indicated below:
(a) If to Employee:
Xxxxxx X. Xxxxx
00000 Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxx 00000-0000
with a copy to:
(b) If to the Company:
Centerprise Advisors, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Date of service of such notice shall be (i) the date such notice is
personally delivered or sent by facsimile transmission (with issuance by
the transmitting machine of a confirmation of successful transmission),
(ii) three business days after the date of mailing if sent by certified or
registered mail or (iii) one business day after date of delivery to the
overnight courier if sent by overnight courier.
8.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same Agreement.
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8.10 Descriptive Headings; Interpretation. The descriptive headings
in this Agreement are inserted for convenience of reference only and are
not intended to be part of or to affect the meaning or interpretation of
this Agreement. The use of the word "including" in this Agreement shall be
by way of example rather than by limitation. The Preliminary Recitals set
forth above are incorporated by reference into this Agreement.
8.11 No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties hereto to express their
mutual interest, and no rule of strict construction will be applied against
any party hereto.
8.12 Effectiveness. This Agreement shall become effective upon the
Closing of the Mergers.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
CENTERPRISE ADVISORS, INC.
By: ___________________________________________
Its: ___________________________________________
EMPLOYEE:
_________________________________________________
Xxxxxx X. Xxxxx
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