EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT entered into as of February 21, 2000 by and
between X.X. XXXXXXXX & CO., INC., a New Jersey corporation ("MHM" or
"Employer"), with offices located at Newport Office Tower, 525 Washington
Boulevard, 00xx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, and XXXXXXX X. XXXXXXXXX,
XX., residing at 0000 Xxxxxxxxx Xx, Xxxxxxx. XX 00000 ("Employee").
W I T N E S S E T H :
A. MHM is engaged in business as a registered securities broker-dealer
("Employer's Business").
B. Employer desires to employ Employee as its Vice President of Operations,
for the purpose, among other things, of supervising and managing the back
office operations of Employer, as well as, where requested by senior
management of Employer, supervising or assisting in operations of
Employer's affiliates and subsidiaries including, without limitation,
Xxxxxxxxx.xxx Inc.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Employment
(a) During the Term of Employment as defined in Section 2, Employer agrees
to employ Employee, as Employer's Vice President of Operations. Employee
agrees to act in the foregoing capacities, in accordance with the terms
and conditions contained in this Agreement.
(b) Employee shall devote all of Employee's working time to performance of
his duties under this Agreement. Employee shall render services, without
additional compensation, in connection with the operation of Employer's
business, including activities of affiliates and subsidiaries of the
Employer. As used in this Agreement, the term "affiliate" shall mean any
entity or person that, directly or indirectly, is controlled by or under
common control with Employer.
(c) In view of Employee's duties and responsibilities hereunder, Employee
shall continue to maintain his existing licenses with the NASD including,
without limitation, his Series 4, 7, 24, 53 and 65 registrations, as well
as to undertake to qualify for any other NASD license tests or applicable
regulatory requirements necessary or convenient to enable Employee to
undertake and fulfill his functions, from time to time, under this
Agreement.
2. Term
The initial term of Employee's employment under this Agreement shall be
for a one year term, to commence on February 21, 2000 and end on January
31, 2001 (the "Initial Term"). Thereafter, this Agreement shall be
automatically renewed and extended for consecutive one year renewal terms,
unless either party sends to the other party a notice of non-renewal at
least sixty (60) days prior to the expiration of the Initial Term or any
renewal term (the "Renewal Term"). The Initial Term and Renewal Term are
subject to earlier termination as set forth in Section 5. The actual term
of employment is defined as "Term of Employment."
3. Compensation
Employer shall pay to Employee an annual base salary of $150,000 per
annum. All payments shall be made in equal bi-weekly installments, in
arrears, or such other installments as may be consistent with the payroll
practices of Employer for its Employees.
4. Additional Employee Benefits
(a) Employer shall reimburse Employee for all expenses reasonably incurred
by Employee in connection with the performance of Employee's duties under
this Agreement against Employee's pre-submitted documented vouchers for
such expenses, which must be approved in writing by a senior executive
officer of Employer prior to the incurrence of such expense.
(b) Employee shall be entitled to reasonable vacation periods each year,
as the case may be) and other general medical and employee benefit,
retirement and compensation plans (including profit sharing or pension
plans) as shall have been established and are continuing for senior
management.
(c) Employer shall pay directly or reimburse Employee, for a period of the
lesser of one year or until Employee and his family relocates to a
reasonable commuting distance from Employer's place of business to the sum
of up to approximately $1,200 per month for rental of an apartment
including customary furnishings and living expenses, on a non-accountable
basis. At such time as this payment ceases, Employer will pay directly or
reimburse Employee for the leasing of an automobile at a cost of up to
$500 per month for use by Employee in performing his duties under this
Agreement.
(d) Employee shall receive an option to acquire 25,000 shares of
Employer's common stock at a price equal to 5% above the closing market
price thereof on the commencement date of this Agreement, out of which
12,500 shares shall vest on the date of grant and 12,500 shares shall vest
on the first anniversary date thereof. Such grant shall be for a
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term of five years, subject to earlier termination in the event of
Employee's termination of employment and in Employer's customary form.
(e) Employer agrees, on the commencement date of this Agreement, to loan
Employee the sum of $200,000 for a term of three years without interest.
Repayment of such loan shall be secured by a pledge by Employee of 50,000
shares of Common Stock of Employer owned by Employee which Employee is
purchasing from the Company at a price of $4.00 per share. The loan shall
be without personal recourse, accelerated to become due upon termination
of Employee's employment hereunder, and may be renewed at the sole option
and election of Employer's Board of Directors for up to an additional
three years. This arrangement shall be subject to obtaining the approval
of The NASDAQ Stock Market Inc. and any conditions and limitations imposed
by that body.
5. Termination
(a) Employer may terminate this Agreement for cause.
(b) "Cause" within the meaning of this Agreement shall mean any one or
more of the following:
(i) Employee's breach of any of the material provisions of
this Agreement; or
(ii) Employee's failure or refusal to follow any specific
written directions of the person Employee reports to
(which directions include a statement to the effect that
failure or refusal to follow such directions shall
constitute cause for termination of the employment of
Employee hereunder); or
(iii) Employee's failure or refusal to perform Employee's duties
in accordance with Recital B or Section 1 hereof, provided
Employee shall have been given written notice by the
person Employee reports to of such failure or refusal to
perform these duties and three business days within which
to cure the same; or
(iv) Failure by Employee to comply in any material respect with
the terms of any provision contained in this Agreement, if
any, or any written policies or directives of Employer's
senior management, provided Employee shall have been given
written notice of such failure or refusal to perform these
duties and three business days within which to cure the
same; or
(v) Physical incapacity or disability of Employee to perform
the services required to be performed under this
Agreement. For purposes of this Section 5(b)(v),
Employee's incapacity or disability to perform such
services for any cumulative period of ninety (90) days
during any
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twelve-month period, or for any consecutive period of
sixty (60) days, shall be deemed "cause" hereunder; or
(vi) Employee is convicted of, pleads guilty or no contest to,
or admits or confesses to any felony or any act of fraud,
misappropriation or embezzlement; or
(vii) Employee engages in an intentional fraudulent act or
dishonest act to the damage or prejudice of Employer
and/or its affiliates or in conduct or activities damaging
to the property, business or reputation of Employer and/or
its affiliates; or
(viii) If Employee is registered or licensed with the National
Association of Securities Dealers, Inc. or any other
regulatory authority, federal or state, and has violated
any applicable rule of any such regulatory authority.
(c) If Employer notifies Employee of its election to terminate this
Agreement for cause, this termination shall become effective at the
time notice is deemed to have been given in accordance with Section
9.
(d) This Agreement shall automatically terminate upon the death of
Employee.
6. Non-Solicitation, Non-Disclosure,
Shop Rights and Xxxxxxx Xxxxxxx
(a) Non-Solicitation.
During Employee's Term of Employment with Employer, and for a
period of one (1) year from the date of expiration or termination of such
employment (the "Restricted Period"), Employee covenants and agrees that
Employee will not, directly or indirectly, either for itself or for any
other person or business entity, (i) solicit any employee of Employer to
terminate his employment with Employer or employ such individual during
his employment with Employer and for a period of one (1) year after such
individual terminates his employment with Employer, or (ii) make any
disparaging statements concerning Employer, Employer's Business or its
officers, directors, or employees, that could injure, impair or damage the
relationships between Employer or Employer's business on the one hand and
any of the employees, customers or suppliers of Employer's business, or
any lessor, lessee, vendor, supplier, customer, distributor, employee or
other business associate of Employer's Business.
(b) Non-Disclosure and Non-Use.
(i) Description of Confidential Information. For purposes of this
Section 6(b),
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Confidential Information means any information disclosed during the
Restricted Period, which is clearly either marked or reasonably understood
as being confidential or proprietary including, but not limited to,
information disclosed in discussions between the parties in connection
with technical information, data, proposals and other documents of
Employer pertaining to its business, products, services, finances, product
designs, plans, customer lists, public relations and other marketing
information and other unpublished information. Confidential Information
shall include all tangible materials containing Confidential Information
including, but not limited to, written or printed documents and computer
disks and tapes, whether machine or user readable.
(ii) Standard of Care. Employee shall protect the Confidential
Information from disclosure to any person other than other employees of
Employer who have a need to know, by using a reasonable and prudent degree
of care, in light of the significance of the Confidential Information, to
prevent the unauthorized use, dissemination, or publication of such
Confidential Information.
(iii) Exclusion. This Section 6(b) imposes no obligation upon
Employee with respect to information that: (a) was in Employee's
possession before receipt from Employer; (b) is or becomes a matter of
public knowledge through no fault of Employee; (c) is rightfully received
by Employee from a third party who does not have a duty of
confidentiality; (d) is disclosed under operation of law, except that
Employee will disclose only such information as is legally required and
give Employer prompt prior notice; or (e) is disclosed by Employee with
Employer's prior written consent.
(iv) Stock Trading. If the information disclosed or of which
Employee becomes aware is material non-public information about the
Employer, then Employee agrees not to trade in the securities of MHM or
Emey, or in the securities of or any appropriate and relevant third party,
until such time as no violation of the applicable federal and state
securities laws would result from such securities trading.
(v) Return of Confidential Information. The Employee will
immediately destroy or return all tangible material embodying Confidential
Information (in any form and including, without limitation, all summaries,
copies and excerpts of Confidential Information) upon the earlier of (i)
the completion or termination of the dealings between the Employer and
Employee under the Agreement or (ii) at such time that Employer may so
request.
(vi) Notice of Breach. Employee shall notify Employer immediately
upon discovery of any of his unauthorized use or disclosure of
Confidential Information, or any other breach of the Agreement by
Employee, and will cooperate with Employer in every reasonable way to help
Employer regain possession of Confidential Information and prevents its
further unauthorized use.
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(vii) Injunctive Relief. The Employee acknowledges that disclosure
or use of Confidential Information in violation of the Agreement could
cause irreparable harm to the Employer for which monetary damages may be
difficult to ascertain or an inadequate remedy. The Employee therefore
agrees that the Employer will have the rights in addition to its other
rights and remedies, to seek and obtain injunctive relief from any
violation of the Agreement.
(c). Shop Rights and Inventions, Patents, and Technology.
Employee shall promptly disclose to Employer any developments, designs,
patents, inventions, improvements, trade secrets, discoveries,
copyrightable subject matter or other intellectual property conceived,
either solely or jointly with others, developed, or reduced to practice by
Employee during Employee's Term of Employment in connection with the
services performed for Employer (the "Company Developments") and shall
treat such information as proprietary to Employer. Employee agrees to
assign to Employer any and all of Employee's right, title and interest in
the Company Developments and Employee hereby agrees that Employee shall
have no rights in the Company Developments. Any and all Company
Developments in connection with the services performed for Employer
pursuant to the Agreement are "works for hire" created for and owed
exclusively by Employer.
7. Representation and Indemnification
Employee hereby represents and warrants that Employee is not a party to
any agreement, whether oral or written, which would prohibit Employee from being
employed by Employer, and Employee further agrees to indemnify and hold
Employer, its directors, officers, shareholders and agents, harmless from and
against any and all losses, cost or expense of every kind, nature and
description (including, without limitation, whether or not suit be brought, all
reasonable costs, expenses and fees of legal counsel), based upon, arising out
of or otherwise in respect of any breach of such representation and warranty.
8. Injunctive Relief
The parties acknowledge that the services to be rendered hereunder by
Employee are special, unique and of extraordinary character, and that in the
event of a breach or a threatened breach of Employee of any of Employee's
obligations under this Agreement, Employer will not have an adequate remedy at
law. Accordingly, in the event of any breach or threatened breach of Employee,
Employer shall be entitled to such equitable and injunctive relief as may be
available to restrain Employee and any business, firm, partnership, individual,
corporation or entity participating in the breach of this agreement. Nothing in
this agreement shall be construed as prohibiting Employer from pursing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Employee under this agreement.
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9. Notices
All notices shall be in writing and shall be delivered personally
(including by courier), sent by facsimile transmission (with appropriate
documented receipt thereof), by overnight receipted courier service (such as UPS
or Federal Express) or sent by certified, registered or express mail, postage
prepaid, to the parties at their address set forth at the beginning of this
Agreement with Employer's copy being sent to Employer at its then principal
office. Any such notice shall be deemed given when so delivered personally, or
if sent by facsimile transmission, when transmitted, or, if mailed, forty-eight
(48) hours after the date of deposit in the mail. Any party may, by notice given
in accordance with this Section to the other party, designate another address or
person for receipt of notices hereunder. Copies of any notices to be given to
Employer shall be given simultaneously to: Xxxxxxx & Xxxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxxxx, Esq..
10. Miscellaneous
(a) This Agreement shall be governed in all respects, including
validity, construction, interpretation and effect, by New Jersey law,
without giving effect to conflicts of laws. The parties hereby agree that
any action, proceeding or claim arising out of, or relating in any way to,
this Agreement shall be brought and enforced in the courts of the State of
New Jersey or of the United States of America for New Jersey, and
irrevocably submit to such jurisdiction, and waive any claim that such
courts represent an inconvenient forum. Any process or summons to be
served upon either party may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth hereinabove. Such mailing
shall be deemed personal service and shall be legal and binding upon said
party in any action, proceeding or claim.
(b) This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by authorized representatives of the parties or, in the case of a
waiver, by an authorized representative of the party waiving compliance.
No such written instrument shall be effective unless it expressly recites
that it is intended to amend, supersede, cancel, renew or extend this
Agreement or to waive compliance with one or more of the terms hereof, as
the case may be. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or
privilege, or any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any
other such right, power or privilege. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity.
(c) In view of Employer's need and desire to maintain a proper working
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environment with suitable demeanor of its employees and in light of
Employer's sensitivity to the views of its customers and potential
customers and to regulatory bodies having jurisdiction over Employer's
business activities, Employer has instituted a policy of requiring
employees to be subject to, at Employer's sole reasonable discretion,
alcohol and drug testing procedures and requirements. Employee
specifically consents to the same, agrees to be subject to whatever
procedures may now or hereinafter be put in place covering such testing
and understands and agrees that Employee's consent to this is a material
inducement to Employer to enter into this agreement and to provide for the
employment of Employee hereunder.
(d) If any provision or any portion of any provision of this Agreement
or the application of any such provision or any portion thereof to any
person or circumstance, shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement, or the application of such provision or portion of such
provision as is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall
not be affected thereby and such provision or portion of any provision as
shall have been held invalid or unenforceable shall be deemed limited or
modified to the extent necessary to make it valid and enforceable; in no
event shall this Agreement be rendered void or unenforceable.
(e) The headings to the Sections of this Agreement are for convenience
of reference only and shall not be given any effect in the construction or
enforcement of this Agreement.
(f) This Agreement shall inure to the benefit of and be binding upon
the successor and assigns of Employer, but no interest in this Agreement
shall be transferable in any manner by Employee.
(g) This Agreement constitutes the entire agreement and understanding
between the parties and supersedes all prior discussions, agreements and
undertakings, written or oral, of any and every nature with respect
thereto.
(h) This Agreement may be executed by the parties hereto in separate
counterparts which together shall constitute one and the same instrument.
(i) In the event of the termination or expiration of this Agreement,
the provisions of Sections 6, 7, 8 and 10 hereof shall remain in full
force and effect, in accordance with their respective terms.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
stated at the beginning of this Agreement.
X.X. XXXXXXXX & CO., INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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/s/ Xxxxxxx X. Xxxxxxxxx, Xx.
-----------------------------
Employee - Xxxxxxx X. Xxxxxxxxx, Xx.
