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Exhibit 10.10
Execution Copy
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 29th day
of November, 1996 is entered into between JHFSC Acquisition Corp., a Delaware
corporation with its principal place of business at Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx (the "Company"), and Xxxx X. Xxxxxxxxx, residing at 00 Xxxxxxxxx
Xxxxx, Xxxxxxxxxx, XX 00000 (the "Executive").
The Executive currently serves as the Chairman, President and Chief
Executive Officer of Xxxx Xxxxxxx Freedom Securities Corporation ("JHFS"). As of
the date hereof, the Company will acquire substantially all of the outstanding
capital stock of JHFS pursuant to a certain Contribution Agreement dated as of
October 4, 1996, and in connection with such acquisition, the Company desires to
employ the Executive on the terms provided herein.
In consideration of the mutual covenants and promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve the Company, upon the terms
set forth in this Agreement, for the period commencing on the date of this
Agreement and ending on December 31, 1999 (the "Expiration Date"), unless
extended or sooner terminated in accordance with the provisions of this
Agreement. On each date that is four months prior to the Expiration Date then in
effect, the Expiration Date shall be automatically extended by one year unless
either party hereto shall have previously given notice to the other party that
the Expiration Date shall not be so extended.
2. POSITION AND PERFORMANCE.
2.1 OFFICES. The Executive shall serve as Chairman, President
and Chief Executive Officer of the Company, as Chairman and Chief
Executive Officer of the Company's subsidiary, Xxxxxx Xxxxxxx
Incorporated ("Xxxxxx"), and as Chairman of the Company's subsidiary,
Sutro & Co., Incorporated ("Sutro"). The Executive shall be subject to
the supervision of the Board of Directors of the Company (the "Board of
Directors") and shall also have such other powers, duties and
responsibilities commensurate with such office or offices as may from
time to time reasonably be prescribed by the Board of Directors. In
addition, the Executive agrees to serve during the term of his
employment hereunder, if elected or appointed thereto, in one or more
positions as an officer or director of the Company or any one or more
of its present or future Subsidiaries, or as an officer, trustee or
director of any pension plan of the Company or any of its Subsidiaries.
Service in such additional offices will be without additional
compensation except for reimbursement of reasonably related business
expenses on the same terms as provided elsewhere in this Agreement. The
Company
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shall not cause the Executive to relocate his residence in connection with the
fulfillment of his duties and responsibilities hereunder without the Executive's
prior consent.
2.2 PERFORMANCE. During the term hereof, the Executive shall
be employed by the Company on a full-time basis and shall perform and
discharge (faithfully, diligently and to the best of his ability) his
duties and responsibilities hereunder and shall be accountable to the
Board of Directors; provided, however, that Executive may pursue
community and charitable activities and hold positions in connection
therewith and such other activities as may be approved in advance by
the Board of Directors, such approval not to be unreasonably withheld.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall pay the Executive such annual
base salary as the Employee and the Board of Directors agree upon from
time to time. In addition, the Employee shall be entitled to receive
bonus compensation, if any, in such amount or pursuant to such formula
as the Executive and the Board of Directors agree upon from time to
time. Notwithstanding the foregoing, the Employee shall be entitled to
receive minimum cash compensation under this Agreement (whether as
salary, bonus or otherwise) in any calendar year of at least $750,000,
less such amounts or deductions required to be withheld by applicable
law (it being agreed that the Employee's cash compensation during
calendar year 1996, whether paid to the Employee before or after the
date of this Agreement, shall not in the aggregate be less than
$750,000). Base salary shall be payable in accordance with the payroll
practices of the Company. In addition to the foregoing minimum annual
cash compensation, if any executive bonus pool or other compensation
shall be payable to executives of the Company or any of its
Subsidiaries in connection with a sale of substantially all of the
assets of the Company, or an acquisition by any party of capital stock
of the Company, Xxxxxx or Sutro or a merger, consolidation or other
transaction in which the Company, Xxxxxx or Sutro is not the surviving
corporation or which otherwise results in a change in control of the
Company, then the Executive shall be entitled to receive a
proportionate amount of any such bonus or other compensation based on
the Executive's position at the Company on the date of consummation of
such transaction.
3.2 OTHER FRINGE BENEFITS. The Executive shall be entitled to
participate in all benefit programs (including, without limitation, all
life and disability insurance, health and, accident plans, retirement
plans, stock incentive plans, and retention plans and other
arrangements) that the Company (or its subsidiaries) makes available to
employees or key executives of the Company (or any such subsidiary),
with the Executive's participation to be at a level consistent with the
Executive's positions with the Company, Xxxxxx and Sutro. The Executive
shall be entitled to six weeks paid vacation per year, to be taken at
such times as he deems appropriate. The Executive shall be entitled to
carry forward unused vacation pay and to cash out any unused vacation
pay upon the termination of the Executive's employment. The benefits
described in this Section 3.2 are hereinafter referred to as the
"Benefits".
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3.3 REIMBURSEMENT OF EXPENSES. The Company shall promptly
reimburse the Executive for reasonable travel, entertainment and other
expenses incurred or paid by the Executive in connection with, or
related to, the performance of the Executive's duties, responsibilities
or services under this Agreement and incurred or paid consistent with
past practices, upon presentation by the Executive of documentation,
expense statements, vouchers and/or such other supporting information
as the Company may request, provided, however, that the amount
available for such travel, entertainment and other expenses may be
fixed in advance by the Board.
4. EMPLOYMENT TERMINATION.
4.1 DATE OF TERMINATION: TERM OF EMPLOYMENT. The term "Date of
Termination" shall mean the earlier of (i) the Expiration Date or (ii)
if the Executive's employment is sooner terminated hereunder, the date
on which such termination is to be effective pursuant to the terms
hereof. For all purposes of this Agreement, references to the "term" of
the Executive's employment hereunder shall mean the period commencing
on the date hereof and ending on the Date of Termination.
4.2 UPON DEATH OR DISABILITY. This Agreement shall terminate
on the date of the death or disability of the Executive. As used in
this Agreement, the term "disability" shall mean the inability of the
Executive, due to a physical or mental disability, for a period of 180
consecutive days to perform the essential functions of the Executive's
position which are contemplated under this Agreement. A determination
of disability shall be made by a physician satisfactory to both the
Executive and the Company, provided that if the Executive and the
Company do not agree on a physician, the Executive and the Company
shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding
on all parties. The reasonable fees and expenses of any and all such
physicians shall be borne by the Company.
4.3 BY THE COMPANY FOR CAUSE. This Agreement may be terminated
by the Company for cause immediately upon written notice by the Company
to the Executive setting forth the basis for such termination with
particularity. For the purposes of this Section 4.3, "cause" for
termination shall mean (i) a material failure of the Executive to
perform the Executive's assigned duties for the Company or gross
negligence or willful misconduct of the Executive in the performance of
the Executive's assigned duties for the Company or any breach of any
covenant contained in Section 6 or 7 hereof, in each case after notice
and a reasonable opportunity to cure (if such act or failure shall be
susceptible to cure) of not less than 30 days, and (ii) the conviction
of the Executive of, or the entry of a pleading of guilty or nolo
contendere by the Executive to, any crime involving moral turpitude or
any felony.
4.4 BY THE EXECUTIVE FOR GOOD REASON. This Agreement may be
terminated by the Executive upon 30 days' prior written notice to the
Company for good reason. For
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purposes of this Section 4.4, "good reason" shall mean (i) any removal by the
Company of the Executive from any of the positions indicated in Section 2
hereof, except in connection with termination of the Executive's employment for
cause or termination or suspension of employment due to the Executive's
incapacity, (ii) a reduction in the Executive's compensation below the minimum
amount provided for in Section 3.1 hereof or Benefits (except to the extent that
any such reduction is the result of a change to or termination of a benefit
program in which the Executive participates which applies equally to all other
participants therein), or (iii) any breach by the Company of its obligations
under this Agreement or any other willful action by the Company that is
materially inconsistent with the terms of this Agreement after written notice
and a reasonable opportunity to cure of not less than 30 days.
4.5 AT THE ELECTION OF EITHER PARTY. This Agreement may be
terminated by either the Company or the Executive at any time upon at
least 30 days' prior written notice.
5. EFFECT OF TERMINATION.
5.1 TERMINATION BY THE COMPANY FOR CAUSE OR TERMINATION BY
EXECUTIVE PURSUANT TO SECTION 4.5. In the event that the Executive's
employment is terminated for cause pursuant to Section 4.3 or the
Executive shall terminate this Agreement pursuant to Section 4.5, the
Company shall pay to the Executive salary, bonus and other cash
compensation at his then current rate of pay (which shall be not less
than the amount of salary, bonus and other cash compensation earned per
day for the fiscal year ended immediately prior to such Date of
Termination) and Benefits through the Date of Termination; provided,
however, that in the event of any termination of the Executive's
employment for cause, the foregoing compensation amount shall be the
minimum compensation set forth in Section 3.1 hereof.
5.2 TERMINATION BY THE COMPANY WITHOUT CAUSE OR TERMINATION BY
THE EXECUTIVE PURSUANT TO SECTION 4.4. In the event that the
Executive's employment is terminated by the Company pursuant to Section
4.5 or the Executive terminates his employment pursuant to Section 4.4,
the Company shall pay to the Executive an amount equal to his salary,
bonus and other cash compensation at his then current rate of pay
(which shall be not less than the amount of salary, bonus and other
cash compensation earned per day for the fiscal year ended immediately
prior to such Date of Termination) and Benefits (or the cash value
thereof) through the LATER of (i) the end of the twenty-fourth (24th)
month following such Date of Termination, or (ii) the Expiration Date
(the "Severance Period"). The compensation payable during the Severance
Period shall be paid in a lump sum amount equal to $500,000 within five
business days after the Date of Termination and the remaining
compensation shall be paid to the Executive in equal monthly
installments on the first day of each month during the Severance
Period, plus accrued interest on such installment amounts at a rate
equal to LIBOR. In addition, any unvested stock options, restricted
stock or other equity interests of the Company or any of its
Subsidiaries held by the Executive on the Date of Termination shall
become fully vested, and in the case of stock options immediately
exercisable, to the extent not prohibited by applicable law.
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5.3 TERMINATION FOR DEATH OR DISABILITY. If the Executive's
employment is terminated by death or because of disability pursuant to
Section 4.2, the Company shall pay to the estate of the Executive or to
the Executive, as the case may be, salary, bonus and other cash
compensation at his then current rate of pay (which shall be not less
than the amount of salary, bonus and other cash compensation earned per
day for the fiscal year ended immediately prior to such Date of
Termination) and Benefits up to the end of the month in which the
termination of the Executive's employment because of death or
disability occurs.
5.4 LIQUIDATED DAMAGES. Any payments paid to the Executive by
the Company under this Section 5 shall be deemed liquidated damages and
shall be in lieu of any other rights to which the Executive may be
entitled.
5.5 SURVIVAL. The provisions of Sections 5, 6 and 7 shall
survive the termination of this Agreement.
6. NON-SOLICIT.
(a) During the Non-solicit Period, the Executive will not:
(i) solicit, divert or take away, or attempt to divert or
to take away, the business or patronage of any of the brokerage or
investment banking clients, customers or accounts of the Company or its
subsidiaries.
(ii) solicit any officer, senior manager or senior broker
who was an employee of the Company at any time during the term of this
Agreement to leave such employment.
(b) For purposes of this Section 6, the term "Non-solicit Period"
shall mean the period commencing on the date hereof and (i) ending two years
after the date the Executive's employment is terminated by the Company pursuant
to Section 4.5 or by the Executive pursuant to Section 4.4, or (ii) ending six
months after the date the Executive terminates his employment pursuant to
Section 4.5; provided, however that this Section 6 shall not apply if the
Executive's termination of employment is based upon non-renewal of this
Agreement by either party upon the Expiration Date.
(c) If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
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(d) The restrictions contained in this Section 6 are necessary for
the protection of the business and goodwill of the Company and its affiliates
and are considered by the Executive to be reasonable for such purpose. The
Executive agrees that any breach of this Section 6 could cause the Company and
its affiliates substantial and irrevocable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, the
Company and its affiliates shall have the right to seek specific performance and
injunctive relief.
7. UNAUTHORIZED DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) CONFIDENTIALITY. The Executive acknowledges that the
Company, its subsidiaries and its affiliates continually develop Confidential
Information, that the Executive may develop Confidential Information for the
Company or its affiliates and that the Executive may learn of Confidential
Information during the course of his employment. The Executive will comply with
the policies and procedures of the Company for protecting Confidential
Information and, for the term hereof and thereafter, will not disclose to any
person (except as required by any statutory or regulatory requirement or
mandatory court order, subpoena or other legal process, and except to any person
required for the proper performance of his duties and responsibilities to the
Company and its affiliates), or use for his own benefit or gain or otherwise use
in a manner adverse to the interests of the Company and its affiliates, any
Confidential Information obtained by the Executive incident to his employment or
other association with the Company or any of its affiliates.
(b) RETURN OF DOCUMENTS. All documents, records, tapes and
other media of every kind and description relating to the business, present or
otherwise, of the Company, its subsidiaries or its affiliates and any copies, in
whole or in part, thereof (the "Documents"), whether or not prepared by the
Executive, shall be the sole and exclusive property of the Company and its
affiliates. The Executive shall safeguard all Documents and shall surrender to
the Company at the time his employment terminates, or at such earlier time or
times as the Board of Directors or its designee may specify, any Documents then
in the Executive's possession or control.
(c) ASSIGNMENT OF RIGHTS TO INTELLECTUAL PROPERTY. The
Executive shall promptly and fully disclose all Intellectual Property to the
Company. The Executive hereby assigns to the Company (or as otherwise directed
by the Company) the Executive's full right, title and interest in and to all
Intellectual Property now owned or hereafter acquired. The Executive agrees to
execute any and all applications for domestic and foreign patents, copyrights or
other proprietary rights and to do such other acts (including without limitation
the execution and delivery of instruments of further assurance or confirmation)
requested by the Company to assign the Intellectual Property to the Company and
to permit the Company to enforce any patents, copyrights or other proprietary
rights to the Intellectual Property. The Executive will not charge the Company
for time spent in complying with these obligations. All copyrightable works that
the Executive creates shall be considered "work made for hire"
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(d) DEFINED TERMS. "Confidential Information" as used herein means
any and all information of the Company and its subsidiaries that is not
generally known by others with whom they compete or do business, or with whom
they plan to compete or do business and any and all information, not publicly
known, which, if disclosed, would assist in competition against the Company and
its subsidiaries, or the disclosure of which would otherwise be adverse to the
interests of the Company or any of its subsidiaries. Confidential Information
also includes comparable information that the Company or any of its subsidiaries
have received belonging to others or which was received by the Company or any of
its subsidiaries with any understanding that it would not be disclosed;
provided, however, that Confidential Information shall not include anything (i)
that has been disclosed to the public (other than in connection with a breach by
the Executive of his obligations hereunder), (ii) that has been obtained by the
Executive from a third party otherwise than in violation of a confidentiality
agreement to which such third party is bound, or (iii) that has otherwise
lawfully entered the public domain. "Intellectual Property" as used herein means
inventions, discoveries, developments, methods, processes, compositions, works,
concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) relating to the business of the Company, its Subsidiaries and its
affiliates conceived, made, created, developed or reduced to practice by the
Executive (whether alone or with others, whether or not during normal business
hours or on or off Company premises) during the Executive's employment.
8. NOTICES. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the United States mail, by registered or certified
mail, postage prepaid, or via a reputable nationwide overnight courier service
addressed to the other party at the address shown above, or at such other
address or addresses as either party shall designate to the other in accordance
with this Section 8.
9. INDEMNITY. The Company hereby agrees, to the maximum extent
permitted from time to time under the law of the State of Delaware, to indemnify
the Executive, and upon request shall advance expenses to the Executive if he
shall become a party or is threatened to be made a party to, any threatened,
pending or completed action, suit, proceeding or claim, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was or has
agreed to be a director or hold any of such offices, against expenses (including
attorneys' fees and expenses), judgments, fines, penalties and amounts paid in
settlement incurred in connection with investigation, preparation to defend or
defense of such action, suit, proceeding or claim; PROVIDED, HOWEVER, that the
foregoing shall not require the Company to indemnify the Executive against, or
advance expenses to the Executive in connection with, any action, suit,
proceeding or claim resulting from any breach of the Executive's duties
hereunder that would permit the Company to terminate this Agreement for cause.
Such indemnification shall not be exclusive of other indemnification rights
arising under any by-law, agreement, vote of directors or stockholders or
otherwise.
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10. PRONOUNS. Whenever the context may require, any pronouns used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
12. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by each of the Company and the Executive.
13. GOVERNING LAW. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of The Commonwealth of Massachusetts.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Executive are personal and shall not be assigned by him.
15. MISCELLANEOUS.
15.1 No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
15.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
15.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
JHFSC ACQUISITION CORP.
By: /s/ Xxxxx X. XxXxx
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Title: Secretary
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/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
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