Exhibit 10
[vFinance, Inc. Letterhead]
January 14, 2004
Xx. Xxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Dear Xxxxxx:
We hereby amend and restate our November 15, 2004 letter agreement with you
("Employee") regarding the position of Chief Financial Officer and Chief
Administrative Officer ("CFO") at vFinance Inc. ("VFIN" or "the Company"). This
position reports to the Chairman and COO of vFinance, Inc. Your start date will
be effective on January 4, 2005. As a condition of your employment you will
attend budget meetings and the Company holiday party in New York City and Boca
Raton. The meetings in New York will be on December 8 and 9. The Boca meetings
are scheduled for December 16. The Company will reimburse you for all of your
travel expenses to New York.
The terms of your employment are as follows:
1) The Company shall pay Employee a base salary of $155,000 per annum
("Base Salary"), payable on a bi-weekly basis, less any and all
applicable Federal and State taxes. Immediately after you acquire your
NASD Series 27, VFIN will increase your Base Salary to $175,000. It is
expected that you will obtain your NASD Series 27 license within 6
months of your start date. Your performance will be evaluated annually
and based upon job performance your salary may be adjusted at that
time.
2) As an Officer of the Company, you are eligible for bonuses. The target
bonus compensation for this position is equal to 50% of the base
salary.
3) In your capacity as CFO, your organization is tasked with providing
financial, human resource, information, data and telecommunications
services ("Services") to the firms Independent Contractors and Broker
Dealers that "clear" through the Company and its subsidiaries. You are
eligible to earn incentive compensation ("IC") on a quarterly basis
based on a year-to-date revenues per the following formula:
a) In the first year of your employment your bonus will be equal to
10% of the operating profits generated from the creation and sale
of Services.
b) In each successive year, the operating profit of the year just
ended will be subtracted from the prior year to determine the
incremental operating profit for the year just ended ("IOP").
Each year the IOPs from the proceeding years will earn commission
per the following percentages:
Period Percentage
------------------- ----------
Year Just Ended 10%
------------------- ----------
IOP prior year 8%
------------------- ----------
IOP two years ago 6%
------------------- ----------
IOP three years ago 4%
------------------- ----------
IOP four years ago 2%
------------------- ----------
IOP five years ago 0%
------------------- ----------
c) Example: Employee has completed their third year with the company. The
operating profits for the company for each year is as follows:
Period Operating Profit IOP Commission Rate Commission Earned
------------------ ------------------ ------------------------------- ----------------- -------------------
Year Just Ended 3,150,000 1,550,000 (3,150,000-1,600,000) 10% 155,000
------------------ ------------------ ------------------------------- ----------------- -------------------
IOP prior year 1,600,000 850,000 (1,600,000- 750,000) 8% 68,000
------------------ ------------------ ------------------------------- ----------------- -------------------
IOP two years ago 750,000 750,000 6% 45,000
------------------ ------------------ ------------------------------- ----------------- -------------------
Total annual IC earned = $268,000
Your quarterly compensation will be paid on year-to-date operating profits
multiplied by the Commission Rate applicable less prior payments. In the
above example should operating profits earned in the first quarter equal
$1,000,000; then the IC earned would equal $65,000 (($750,000 * 6%) +
($250,000 * 8%)).
4) You are eligible to participate in all employee benefit plans and
arrangements now in effect or which may hereafter be established including
all life insurance plans, medical care plans, disability, retirement and
other employee benefits plans of the Company. In addition, the Company
hereby agrees to pay for family medical (PPO) and family dental coverage
for Employee. (Such coverage to begin on or about employee's start date).
5) You will, immediately upon employment, begin earning (accruing) vacation at
the rate of four weeks per annum.
6) You shall be reimbursed for all reasonable pre-approved expenses incurred
in the performance of your duties including but not limited to
entertainment, travel, cell phone charges, high speed internet access fees,
and training materials and classes related to the series 27 examination,
and other expenses deemed reasonably necessary by your direct superiors.
7) Until such time as you relocate to either Palm Beach or Broward counties,
you will have the option to work one day per week out of your home office.
The employee understands that on those days their presence in the office is
not required to fulfill the duties of the position. The Company will
purchase of necessary equipment to set up a home office including a laptop
computer (which will also serve as the employees office computer) and
printer. The firm will reimburse the employee for high-speed Internet, fax
and telecommunication services.
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8) Employee will be granted options to purchase 750,000 shares of vFinance,
Inc. Common Stock at an exercise price equal to the closing price of VFIN
as of January 14, 2005. The options are granted pursuant to the terms and
conditions of the Employee Option Plan. The Options shall vest as follows:
93,750 Options shall vest on July 14, 2005 and 93,750 Options shall vest on
January 14, 2006. 187,500 options shall vest each subsequent year
thereafter, on January 14, until all such options are vested. Vesting only
takes place if the Employee is employed with the Company on the applicable
annual vesting date. Employee will also be eligible for ongoing option
grants at the discretion of the Company. Should there be a change of
management control in the Company, then all options immediately vest.
Change of management control is deemed to occur when an individual or
company purchases more than 50.1% of the issued shares of the Company and
the Chairman and CEO of the Company are terminated or their respective
positions are replaced. Beginning no later than one (1) year from the date
of employment, the Company shall provide the Employee with standard
piggy-back registration rights with respect to the shares of VFIN Common
Stock underlying the Options.
9) This offer is not an employment agreement or a guarantee of employment.
Your employment with the Company is "at will". The Company may terminate
you for any reason, with or without cause and you may terminate your
employment with or without cause.
10) During the term of your employment, you shall perform the duties and
responsibilities consistent with the Position Description (see attachment)
for the Chief Financial Officer and Chief Administrative Officer as well as
other duties as may be assigned to you. In the event the Company terminates
you without cause or the Employee terminates her employment for any reason,
each Party shall give the other party four weeks notice of termination in
writing. The Company, at its option, reserves the right to accept Employees
termination notice effective upon receipt of such notice by Employee.
Should there be a change of management control as defined in 7 above and
should new management terminate your employment; then you will be entitled
to severance equal to one year salary plus benefits paid to Employee in
twelve (12) equal monthly payments as long as you do not receive
compensation for your ownership in the company in an amount equal to or
greater than $1,000,000 USD. Should new management reduce Employee's salary
and/or reduce the amount of bonus the Employee can earn, then you would
have the option to terminate your employment and receive one year's salary
(plus benefits) paid to you in twelve (12) equal monthly payments provided
you do not receive compensation for your ownership in vFinance in an amount
equal to or greater than $1,000,000 USD.
11) "Confidential Information" means knowledge, information and material which
is proprietary to the Company, of which Employee may obtain knowledge or
access through or as a result of his employment by the Company (including
information conceived, originated, discovered or developed in whole or in
part by Employee during his employment with the Company). Confidential
Information includes, but is not limited to, technical knowledge,
information and material such as trade secrets, processes, formulas, data,
know-how, strategies, analytical models, improvements, inventions, computer
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programs, drawings, patents, and experimental and development work
techniques. Marketing and other information such as supplier lists,
customer lists, list of prospective customers and acquisition targets,
marketing and business plans, business or technical needs of customers,
consultants, licenses or suppliers and their methods of doing business,
arrangements with customers, consultants, licenses or suppliers, manuals
and personal records or data. Confidential information also includes any
information described above which the Company obtains from another party
and which the Company treats as proprietary or designates as confidential,
whether or not owned or developed by the Company. Notwithstanding the
foregoing, any information which is or becomes available to the general
public otherwise than by breach of this Section shall not constitute
Confidential Information for purposes of this Agreement.
a) During the term of your employment and eighteen (18) months
thereafter, Xxxxxxxx agrees to hold in confidence all Confidential
Information and not to use such information for Employee's own
benefits or to reveal, report, publish, disclose or transfer, directly
or indirectly, any Confidential Information to any person or entity,
or to utilize Confidential Information for any purposes, except in the
course of Employee's work for the Company.
b) Employee will abide by any and all security rules and regulations,
whether formal or informal, that may from time to time be imposed by
the Company for the protection of Confidential Information, and will
inform the Company of any defects in or improvements that could be
made to, such rules and regulations.
c) Employee will notify the Company in writing immediately upon receipt
of any subpoena, notice to produce, or other compulsory order to
process of any court of law or government agency if such document
requires or may require disclosure or other transfer of Confidential
Information.
d) Upon termination of employment, Employee will deliver to the Company
any and all records and tangible property that contains Confidential
Information that is in his possession or under his control.
12) The Employee covenants and agrees that for an eighteen (18) month period
following termination, you will not, directly or indirectly, hire any
employee of the Company or its affiliates or solicit or induce any employee
of the Company or its affiliates to leave the Company.
If any court shall determine that the duration or geographical limit of any
covenant contained in Sections 10 or 11 is unenforceable, it is the intention of
the parties that these covenants shall not thereby be terminated but shall be
deemed amended to the extent required to render it valid and enforceable, and
such amendment to apply in the jurisdiction of the court that has made such
adjudication.
Employee acknowledges that by accepting this offer of employment, the covenants
contained in Sections 10 or 11 hereof are the basis upon which this offer is
being proffered and that each of these covenants is reasonable and necessary to
protect and preserve the interests, properties and business of the Company, and
that an irreparable loss and damage will be suffered by the Company should
Employee breach any such covenants. Employee further acknowledges that he shall
not be precluded from the enforcement of these provisions.
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We are excited at the prospects of working with you and believe that your skills
and experience will contribute significantly to our ongoing success. Please
indicate your acceptance of this amended and restated letter agreement by
signing this letter in the space provided below.
VFINANCE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
Chairman and COO
AGREED AND ACCEPTED:
Employee
By: /s/ Xxxxxx Xxxxxxx
------------------
Xxxxxx Xxxxxxx
January 14, 2005
----------------
Date
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